Study on the enabling framework for private sector participation in battery energy storage systems (BESS) in Kenya
Sub-Saharan Africa
January 15, 2025K&M Advisors was engaged by the World Bank to develop a comprehensive framework aimed at facilitating private sector participation in Battery Energy Storage Systems (BESS) in Kenya. This study supports the Government of Kenya (GoK) in advancing the country’s evolving energy landscape. With Kenya’s growing reliance on renewable energy sources—particularly geothermal, wind, and solar—the integration of utility-scale, grid-connected BESS is crucial for addressing grid stability, managing excess energy during periods of low demand, and increasing the overall share of renewable energy in the national grid. The intermittent nature of renewable energy sources has introduced challenges such as the need for load balancing and the provision of ancillary services to maintain consistent grid operations.
The primary objectives of this study are to develop a supportive policy, legal, and regulatory framework that encourages private investment in BESS and to assess best practices from other countries to inform Kenya’s strategy. The study involves identifying gaps within Kenya’s existing regulatory framework, exploring viable financing and ownership models, and evaluating the associated risks and mitigation strategies for private sector engagement in BESS projects. Additionally, the study aims to build capacity among government officials and key stakeholders to ensure effective implementation and management of BESS policies and projects.
Through this initiative, the study seeks to establish BESS as an essential element of Kenya’s grid infrastructure, promoting a reliable, sustainable, and flexible power system that aligns with the nation’s green energy goals.
K&M’s scope of work includes conducting a comprehensive review of Kenya’s electricity system, including its policy, legal, and regulatory frameworks related to private sector involvement in BESS. The team will benchmark Kenya’s practices against international standards, identify regulatory gaps, and recommend improvements. K&M will develop a tailored policy, legal, regulatory, and contractual framework to support BESS development and propose effective revenue models, such as payment mechanisms and tariff arrangements, while assessing their financial impacts. Additionally, K&M will perform a detailed risk analysis to evaluate, allocate, and manage risks between the public and private sectors and design appropriate Public-Private Partnership (PPP) contractual structures. To ensure successful implementation, K&M will also deliver targeted capacity-building training for government agencies and stakeholders involved in Kenya’s energy sector.
