President Uhuru Kenyatta on Tuesday 12th March, 2019 signed into law two Bills of Parliament-the Energy Bill, 2017 and Petroleum (Exploration, Development and Production) Bill, 2017 that are set to reconfigure the energy sector in the country.
The Energy Act, 2017 (“the Energy Act”) is going to consolidate all the laws relating to energy as well as provide for the national and county functions as pertains to energy.
It also establishes the following entities to oversee disparate facets of the sector:
- Energy and Petroleum Regulatory Authority- this will be the successor to the Energy Regulatory Commission established under the Energy Act, 2006 (now repealed) and therefore any reference to the E.R.C shall be deemed to be the one under the new Act;
- Energy and Petroleum Tribunal – this will be the successor to the Energy Tribunal established under the Energy Act, 2006 (now repealed);
- Rural Electrification and Renewable Energy Corporation – this will succeed the Rural Electrification Authority established under the Energy Act, 2006 (now repealed); and
- Nuclear Power and Energy Agency – this will succeed the Kenya Nuclear Electricity Board established under Kenya Nuclear Electricity Board Order, 2012 (now repealed).
The Energy Act also establishes the Renewable Energy Resource Committee which will be an inter-ministerial committee to advice the Cabinet Secretary on among other issues, the allocation of renewable energy resources. In line with global trends, the Energy Act provides for the promotion and development of renewable energy technologies such as biomass, biogas, tidal waves and biodiesel to provide larger quotas of the nation’s energy requirements.
Also notable in the Energy Act is the establishment of a Rural Electrification Fund to accelerate electricity infrastructure in Kenya.
This Act repeals the Energy Act (No. 12 of 2006), the Kenya Nuclear Electricity Board Order, 2012 and the Geothermal Resources Act (No. 12 of 1982).
The Petroleum (Exploration, Development and Production) Act, 2017 (“the Petroleum Act”) provides a framework for the contracting, exploration, development and production of petroleum. This is in anticipation of the Government’s plan to export crude oil from the oil fields in North Western Kenya in the future.
The Petroleum Act provides that the profits obtained from such upstream petroleum operations shall be apportioned between the national government, county government and the local community. The county government shall get twenty per cent (20%) of the national government’s share while the local community shall receive five per cent (5%) of the national government’s share to be managed by a board of trustees.
It also has provisions providing for local content, where contractors are required to give priority to goods and services provided in Kenya when conducting their operations.
This Act repeals the Petroleum (Exploration and Production) Act Chapter 308 Laws of Kenya.
The two Acts can be accessed below; –