Kenya Electricity Generating Company (KenGen), the country’s leading power producer, is shifting strategically to diversify its energy portfolio and enhance national energy resilience. This move is driven by increasing concerns over climate variability and the need for more reliable, sustainable power sources (1,5).
Transitioning Towards a More Resilient Energy Mix
Historically, hydropower has been a cornerstone of Kenya’s electricity generation, accounting for about 24% of the country’s total output. However, recent droughts and unpredictable rainfall patterns have exposed the vulnerabilities of relying heavily on water-fed dams. “Hydropower is the cheapest and most established source of power, but it is also the most vulnerable to climate change,” said KenGen CEO Peter Njenga. “With droughts recently cutting deep into production, the country’s reliance on water-fed dams is being re-evaluated” (1,5).
To address these risks, KenGen has implemented real-time monitoring systems across its hydropower dams to ensure efficient water use and provide early warnings for potential risks. At the same time, the government is accelerating geothermal expansion projects in sites such as Olkaria and Menengai to enhance Kenya’s energy security and support both domestic stability and regional exports (1,5).
Key Initiatives for Energy Diversification
- Development of a 100MW Green Hydrogen Plant:
KenGen plans to invest approximately KSh 17 billion (about USD 132 million) in constructing a 100MW green hydrogen plant at its Olkaria geothermal complex. This facility, supported by concessional finance and grants from the German government, will use renewable energy to produce hydrogen—a zero-carbon fuel with applications in fertilizer, transport, and industry. This project marks Kenya’s first large-scale foray into green hydrogen and positions the country as a regional leader in this emerging technology (2,6). - Expanding Geothermal and Wind Power:
Geothermal energy now represents the largest share of Kenya’s installed capacity at 26.13%, with ongoing expansion projects expected to further increase this proportion. KenGen’s 10-year Government-to-Government (G2G) strategy prioritizes geothermal, wind, and solar investments, as well as the integration of new technologies such as hydrogen energy and energy storage solutions (3,7). - Reducing Dependency on Climate-sensitive Sources:
By diversifying its energy mix, KenGen aims to mitigate the risks associated with droughts and climate change, ensuring a more consistent and reliable power supply across the country (1,5).
Strategic Goals for a Sustainable Future
KenGen’s diversification efforts align with Kenya’s broader national objectives, including the Energy Transition and Investment Plan, which targets Net Zero emissions by 2050 and a power grid that is nearly 100% renewable by 2060 (4). Key strategic goals include:
- Achieving over 80% renewable energy capacity in the national grid by 2030 (7).
- Promoting green hydrogen technology as a clean energy alternative for industry and agriculture (2,6).
- Enhancing energy security and affordability for Kenyan consumers (7).
The Significance of Green Hydrogen in Kenya’s Energy Landscape
KenGen’s green hydrogen project is particularly significant because it:
- Utilizes renewable energy sources like geothermal to produce hydrogen, making it a sustainable and environmentally friendly option (2,6).
- Supports the development of a local green hydrogen value chain, with potential for fertilizer production and export, thereby contributing to food security and economic growth (6).
- Reinforces Kenya’s commitments under international climate agreements, such as the Paris Agreement, and supports the national goal of a low-carbon, green economy (4,7).
Conclusion: A Forward-looking Approach to Kenya’s Energy Future
KenGen’s strategic shift from over-reliance on hydropower to a diversified, renewable energy mix marks a significant milestone in Kenya’s journey toward sustainable development. By investing in innovative projects like green hydrogen and expanding geothermal and wind power, KenGen is positioning Kenya as a resilient, green energy leader in Africa (1,2,3,5,6,7).
Key Takeaways:
- KenGen aims to reduce dependence on hydropower due to climate variability (1,5).
- The company is investing KSh 17 billion in a 100MW green hydrogen plant (2,6).
- Diversification efforts include expanding geothermal and wind energy sources (3,7).
- These initiatives support Kenya’s climate goals and energy security for the future (4,7).
As Kenya continues to embrace renewable energy innovations, KenGen’s strategic initiatives will play a crucial role in shaping a sustainable and resilient energy landscape for generations to come.
FAQs
1. Why is KenGen reducing its reliance on hydropower?
KenGen is reducing reliance on hydropower because it is vulnerable to climate variability and droughts, which have recently caused significant drops in electricity production. Hydropower accounts for about 24% of Kenya’s electricity but is highly sensitive to unpredictable rainfall patterns. Diversifying the energy mix helps improve resilience and ensures a more stable power supply (13,14).
2. What are the main projects KenGen is investing in to diversify energy sources?
KenGen is investing in a 100MW green hydrogen plant at Olkaria, costing approximately KSh 17 billion, which will produce clean hydrogen fuel using renewable energy. In addition, the company is expanding geothermal and wind power capacity, rehabilitating existing plants like Olkaria I geothermal and Gogo hydropower, and developing new solar projects as part of its 10-year G2G strategy (8,11,13).
3. How does green hydrogen fit into Kenya’s energy future?
Green hydrogen produced by KenGen’s plant will be generated using renewable energy sources such as geothermal and solar, making it a sustainable fuel option. It supports Kenya’s climate goals by reducing greenhouse gas emissions and offers opportunities for industrial applications, fertilizer production, and regional exports, positioning Kenya as a leader in green hydrogen technology in Africa (8,13).
4. What are KenGen’s long-term renewable energy targets?
KenGen aims to increase renewable energy capacity significantly, targeting over 80% renewable energy in the national grid by 2030 and aligning with Kenya’s goal of 100% renewable electricity by 2060. Its 10-year G2G strategy focuses on scaling geothermal, wind, solar, and hydrogen energy while improving operational efficiency and energy security (8,10,15).
Citations:
- https://www.capitalfm.co.ke/business/2025/05/kengen-to-cut-reliance-on-hydropower-to-boost-energy-resilience/
- https://www.linkedin.com/posts/serrarigroup_kengen-to-build-ksh-17-billion-green-hydrogen-activity-7328744385154650113-oeQ9
- https://renewafrica.biz/news/geothermal-energy/kengen-outlines-a-geothermal-led-pipeline-of-renewable-eenergy-projects/
- https://www.seforall.org/our-work/initiatives-projects/energy-transition-plans/kenya
- https://english.news.cn/africa/20250528/5134a3049e9746408fca5705fd7790a5/c.html
- https://www.citizen.digital/news/germany-kenya-in-talks-to-tackle-green-hydrogen-barriers-with-ksh17b-investment-boost-n362782
- https://www.kenyans.co.ke/news/105453-govt-track-transition-towards-low-carbon-green-economy
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- https://www.kengen.co.ke/index.php/information-center/news-and-events-3.html
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- https://www.kengen.co.ke/index.php/information-center/news-and-events/reprieve-for-western-kenya-as-kengen-s-gogo-hydropower-redevelopment-project-gets-cabinet-green-light-2.html
- https://www.voanews.com/a/kenya-kengen-electric-power/4262323.html
- http://www.china.org.cn/world/Off_the_Wire/2025-05/28/content_117900353.shtml
- https://energydigital.com/company-reports/kengen
- https://www.kengen.co.ke/index.php/information-center/news-and-events-3/kengen-announces-new-year-plan-to-fast-track-deployment-for-renewable-energy.html
