The trouble with Kenya’s climate strategy
The News
The US and Kenya will collaborate on building low-carbon data centers and other green tech, President Joe Biden and his counterpart William Ruto said during the Kenyan leader’s state visit to Washington this week.
Under a new “climate and clean energy industrial partnership,” the countries will facilitate new investments from the private sector and development banks to convert Kenya’s large supply of clean electricity into climate-friendly exports. While the announcement didn’t include any significant new funding from the US, it marks a big political win for Ruto, who has presented himself as Africa’s leading climate champion and sought to reframe climate finance as less about aid and more about investment. Ruto also used the White House this week as a backdrop to sign a $1 billion deal with Microsoft and the United Arab Emirates-based artificial-intelligence company G42 to build a new low-carbon data center outside Nairobi.
Tim’s view
Ruto’s key insight has been to pitch Kenya as a destination for energy-intensive tech investments at a time when utilities in the US and Europe are starting to panic about exploding power demand for electric vehicles and data centers. But making good on his vision of Kenya as a clean tech powerhouse will test the limits of the country’s delicate grid and could leave Kenyans with less reliable power and higher electric bills.
While the US and Europe struggle to cut greenhouse gas emissions from the power grids, Kenya is already far ahead — between hydropower dams, geothermal energy, and onshore wind, 90% of the country’s power is zero-carbon, making it one of the world’s cleanest grids. The government estimates there’s enough untapped geothermal still available (the country sits on a tectonic divide) to power Kenya five times over. Historically, there hasn’t been much for it to do with all that power apart from its own domestic uses, because of the extreme cost and complexity of building international grid networks.
But a number of new ways are emerging for clean power to be effectively exported in different forms. Build a huge data center and clean power gets converted into bytes, invaluable for tech companies like Microsoft trying to leverage energy-hungry AI without the big carbon footprint. Build electrolyzers and convert clean power into green hydrogen, which can be turned into liquid ammonia and shipped to factories in Europe or Asia to replace natural gas. Build machines to suck carbon from the atmosphere, run them on clean power, and sell expensive carbon removal credits to emissions-intensive companies abroad. Kenya is pursuing all of the above. The new White House agreement also cites EV supply chains, suggesting Kenya could use its clean power for battery manufacturing as the US scrambles to diversify its EV hardware supplies away from China.
Still, “the thesis of bringing all this infrastructure [to Kenya] is pretty flawed,” said Rose Mutiso, research director at the think tank Energy for Growth Hub. Kenyan domestic power prices are high, and blackouts are common. That’s because the country’s grid hasn’t evolved sufficiently to keep up with the heavy penetration of variable renewables, Mutiso said, meaning that even though the on-paper power generation capacity appears to meet or exceed the country’s needs, in practice power is often not sufficiently available in the right time and place. The byzantine structure of the country’s power market also often dispatches higher-cost wind power ahead of low-cost geothermal, she said.
The upshot is that without much more investment in the grid and in utility-scale batteries, deep-pocketed tech companies could effectively be pitted against locals for affordable, reliable power. As the new US-Kenya energy partnership takes shape, Mutiso said, it’s essential to include transparent reporting standards on power contracts, and other steps to ensure most of the benefits actually go to average Kenyans and not to the country’s elites or foreign investors.
Room for Disagreement
One reason for Ruto’s big push on climate has nothing to do with emissions or tech investment. “Climate is a big platform for him to switch his personal narrative from global pariah to global celebrity,” Mutiso said, referring to Ruto’s 2010 prosecution by the International Criminal Court on charges that he helped organize deadly riots following Kenya’s 2007 presidential election. Those charges were dropped in 2016.
The View From Nairobi
The climate finance action will shift from Washington back to Nairobi next week, when the African Development Bank holds its annual meeting. While the AfDB has pushed hard to raise more climate adaptation funding for the continent, some watchdogs say it still has done little to curb its own lending to fossil fuel production.
