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Productivity assessment of power generation in Kenya: What are the impacts?

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  • Sai, Rockson
  • Lin, Boqiang

Abstract

Kenya is classified among the fastest developing economies in Sub Saharan Africa. To sustain this growth, energy is seen as a key ‘enabler’ to oil its new long-term development blueprint, Vision 2030, which intends to transform the economy into a middle income country status and a newly industrialized economy. Yet, the recent energy generation capacity is faced with high growing demand, unreliability, and high cost. Applying Sequential Malmquist Index (SMI), the study examines dynamics of productivity of Kenya's hydro and thermal power plants over the 2013–2020 period. We then employ a Tobit regression method to analyze the influence of environmental factors on changes in the productivity index. The empirical findings show that regress in hydro productivity is mainly caused by the technical efficiency change index (TECI). Besides, productivity for thermal plants improved due to the technology change index (TCI). The SMI provides an appropriate estimate for the share of TCI than the conventional Malmquist index for both plants. The estimates from the regression technique highlight that the life of plants, size, rainfall variation influence hydro SMI changes, and fuel type, life, size also affect thermal SMI changes. Targeted policy implications are provided for future development and operations of power plants.

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  • Sai, Rockson & Lin, Boqiang, 2022. "Productivity assessment of power generation in Kenya: What are the impacts?," Energy, Elsevier, vol. 254(PA).
    • Handle: RePEc:eee:energy:v:254:y:2022:i:pa:s0360544222011033
    DOI: 10.1016/j.energy.2022.124200
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