Energy Act 12 of 2006

The 2006 Energy Act sets up the Energy Regulatory Commission (ERC), an independent regulator meant to formulate licensing procedures, issue permits, make recommendations for further energy regulations, set and adjust tariffs, approve power purchase agreements (PPAs) and prepare national energy plans. The Energy Act entrusts the Ministry of Energy to elaborate sustainable renewable energy production, distribution and commercialisation frameworks. These Ministerial frameworks shall place emphasis on the expansion of local manufacturing sectors and provide specific incentives to existing renewable markets such as bio-digesters, solar systems and hydro-turbines (articles 103-106).Renewable energy frameworks will also encourage biomass co-generation -heat and power- and alternative fuel production from sugar mills.The Ministry of Energy shall also improve levels of international co-operation in the field of technology transfer and financial support. Renewable energy support tools included in the Energy Act are:- An authorisation for 4 MW capacity (or a minimum of 30% of the co-generation plant total capacity) renewable energy systems to produce energy without a license.- Income tax holidays for relevant generation and transmission projects- Full custom and import duties exemption for exclusive renewable energy equipment .With regard to biofuel deployment, the Energy Acts entitles the Kenya Bureau of Standards (KEBS) with the determination of fuel quality and blending standards and the conduct of Environmental Impact Assessments (EIA).The National Biofuel Committee, under the authority of the Ministry of Energy, is also to prepare and implement biofuel deployment regulations and national targets. Alongside this renewable energy support framework, the 2006 Energy Act creates the Rural Electrification Program (REP) that promotes locally available, sustainable and efficient renewable electricity generation for household, farming and non-agricultural income-generating activities.

Want to know more about this policy ? Learn more