Discussion Paper No. 209 of 2018 on Intensity of Energy Consumption among Kenya's Households

Abstract

The primary objective of this paper is to examine the effect of households' socioeconomic characteristics presumed to affect consumption intensity on various energy sources, and establish variations in energy consumption intensity for cooking and lighting among rural and urban areas in Kenya. The study used a micro level data set, the KIPPRA National Energy Survey, to analyze themes under study. The study also used robust analysis by conducting diagnostic and specification tests to identify the most suitable estimation technique. Estimation of energy consumption equations and analysis of the associated discrete marginal effects was conducted using Tobit, double-hurdle model and One way Anova. The discrete unconditional marginal effects indicated that average monthly household income, gender, education level, location (rural or urban), and household dwelling unit significantly affect the consumption intensity on clean and non-clean energy sources. On urban/rural variations in energy consumption intensity, the study found that there was a significant difference in the kerosene consumption intensity for lighting and also significant differences on the consumption intensity for cooking using LPG, wood fuel and charcoal. From the study findings, this study recommends that for optimal and sustainable consumption of clean energy sources, there is need to create awareness among household heads with low literacy levels on the importance of consuming clean energy sources. Embedment of energy consumption strategies such as provision of incentives in acquiring household energy devices such as water pumps in rural areas can boost consumption and productivity, whose benefits are twofold; for households and the power utility.