Highlights of the Draft Energy (Energy Management) Regulations, 2020 

On 18^th September, 2020, the Energy (Energy Management) Regulations, 2020 (the “Draft Regulations”) were gazetted pursuant to Section 198 (1) and (2) of the Energy Act No. 1 of 2019  Laws of Kenya (the “Act”). The Energy and Petroleum Regulatory Authority (EPRA) has thus  invited public comment on these Draft Regulations, to be submitted not later than 7^th November  2020. 

These Draft Regulations would be applicable to the owners of designated industrial, commercial,  and institutional facilities using any form of energy, energy auditors, energy audit firms, energy  managers and energy service companies. We preliminarily note that EPRA shall have the  mandate of designating the specific facilities to whom these regulations shall apply.  

The Draft Regulations seek to enhance efficient energy use in Kenya and promote energy  conservation measures for facilities using any form of energy. Given the current global push  towards sustainable energy use and combating global warming, we anticipate that there shall be  impetus towards such initiatives going forward. 

This article summarises the key highlights of the Draft Regulations and their potential impact on  the sector.  

Energy Management Policy 

EPRA proposes to classify designated facilities into three classes based on the energy  consumption: high energy users; medium energy users or low energy users. Each of these  facilities shall be required to develop an Energy Management Policy (the EMP) that must be  approved by EPRA before implementation.  

The EMP prepared would be in accordance with Kenya Standard KS ISO 50004:2014 and must  cover the following commitments: 

a) to improve energy efficiency and conservation with clear targets; 

b) to comply with the Act and the Regulations; 

c) to provide resources necessary to achieve energy efficiency and conservation; d) to establish and implement a strategic plan for energy efficiency and conservation; and e) to train staff to ensure competence in energy efficiency and conservation.

Energy Consumption Reports 

The Draft Regulations propose that designated facilities will be required to obtain and maintain  periodic records on their monthly electricity consumption, fuel and water, monthly production  or occupancy levels and up-to-date building plans, infrastructure plans and floor area.  

Owners of the facilities will then be required to annually submit energy consumption reports for  every financial year on or before 30^th June.  

Energy Audits 

Energy audits means the verification, monitoring and analysis of use of energy including  submission of technical report containing recommendations for improving energy efficiency with  cost benefit analysis and an action plan to reduce energy consumption. 

Designated facilities are proposed to undertake energy audits at least once every four (4) years by an accredited energy auditor or energy audit firm or energy service company and shall be  conducted in accordance with Kenya Standard KS ISO 50002.  

The owners of designated facilities will thereafter, within six (6) months of completion of the  energy audit, submit the audit report to EPRA. The report shall then be examined, within 30 days,  by EPRA who shall thereafter communicate their approval if satisfied or rejection if dissatisfied.  In the event the audit report is rejected, it is proposed that the owner of the designated facility  be permitted to cause a review and re-submission of the report within thirty (30) days or cause  the energy audit to be repeated within a period of six (6) months.  

Energy Conservation Measures 

Upon approval of the energy audit report by EPRA, it is proposed that owners of the audited  designated facility be required to, within six (6) months, prepare and submit an energy  investment plan (EIP) for implementation of the energy conservation measures as was set out in  the approved audit report. The aim of EIP implementation is to realise at least fifty percent (50%) of the identified and recommended energy savings, within three (3) years of submission of the  EIP to EPRA, and ensure compliance with the energy performance indicators published by EPRA.  

Designated facilities will be required to submit annual reports to EPRA highlighting the  implementation of the energy conservation measures. 

Energy Performance Indicators and Energy Saving Certificates 

EPRA shall publish the minimum energy benchmarks for sectors of the economy based on existing  best practices. The proposal is to have these benchmarks reviewed annually by EPRA.  

Where it is found that a designated facility is consuming energy above the benchmark, the  designated facility shall be required to submit: 

a) a detailed energy audit report compiled by an accredited energy auditor; b) a detailed remedial plan of action to reduce energy consumption to acceptable levels, and c) a commitment to implement the approved remedial plan within two (2) years of its  approval. 

The Draft Regulations have also proposed the introduction of energy saving certificates for those  facilities with desired energy performance indices based on the established standards. These  certificates are to be issued by EPRA upon application.  

An energy savings certificate shall indicate the number of tradable credits determined from the annual energy saved from implementation of energy saving measures as per the guidelines. The  certificates come in two forms: the White Certificate, for facilities whose energy performance  indictor is better than the published best indicator for the sector by twenty five percent (25%) 

and the Green Certificate for facilities whose energy performance indictor meets the published  allowable benchmark for the sector.

Conclusion 

The Draft Regulations seek to enhance efficient energy use in Kenya and promote energy conservation measures for facilities using any form of energy. Given the current global push towards sustainable energy use and combating global warming, we anticipate that there shall be  impetus towards such initiatives going forward. 

In the event you would like further guidance on the content of the Draft Regulations, or assistance in submitting to the EPRA any proposed amendments to the Draft Regulations, do not hesitate to contact the undersigned.