Institute for Development Studies, University of Nairobi

This paper analyses the coal/supply situation as it pertains to the availability for substitution in Kenya. It is a part of a study, Coal/Fuel Oil Substitution Potentials in the Kenyan Economy which, in nutshell, investigates the substitution potentials in the Kenyan Economy and further assesses the implications of such potentials to both dependence on imported crude oil and the capability of the economy to adjust in light of two envisaged developments. The first development is the changing quality of the bulk of crude oil on which Kenya depends. The second is the increasing demand for superior products which is expected to evolve, both in absolute and relative terms, as the economy grows. The potential for these developments to affect the fuel oil supply is high. If the effect is negative, the issue of substitution becomes necessarily a vital policy consideration. Coal is, by and large, seen as an immediate option. Accordingly at all levels of policy consideration, the availability of coal as a substitute must be conceived, at least, as probable. The paper underscores two basic supply conditions. The first is the mineral nature of coal commodity. And, the second is the dependence on imported coal which theoretically can be procured from any outside source. It has been, therefore, necessary to establish the basic mineral supply concepts and approach the Kenyan coal availability from global supply framework. With these as the background the paper analyses the world supply situation and from this extrapolates to put the Kenyan supply situation into relevant perspectives. In this task the fuel oil and coal consumptions in Kenya are reviewed and analysed in order to identify energy gaps and coal consumption potentials. The conclusion is that, by and large, availability potentials are high to a degree where Kenya would be capable of diversifying the supply source not only to meet her coal requirements but also to ensure a reasonable degree of supply security.