Many nations have encouraged the need to fully exploit renewable energy resources and energy-efficient technologies to address the issue of high electricity demand and reduce greenhouse gas emissions. The development of energy pathways and sustainable energy policies of diverse countries for long-term planning has always been a challenging task. This paper investigates the impact of alternative electricity development pathways on system costs and greenhouse gas emissions in Kenya. The Low Emissions Analysis Platform (LEAP) with Next Energy Modeling system for Optimization (NEMO) is used to evaluate the optimized least-cost power system and energy storage. Three scenarios are analyzed: high penetration of renewable energy resources with an energy storage system, internalizing of environmental externalities, and energy productivity. Results from the study indicate that with Kenya's Least Cost Power Development Plan 2017–2037 as the reference, the overall cost savings are up to 26.1 billion US dollars which is equivalent to 55% while the carbon emission saved with high penetration of renewable energy with storage is up to 6.3 Mt. On the other hand, energy productivity shows a downward trend with the existing policies and exhibits an upward trend when two policy instruments are considered. Consequently, those alternative energy planning pathways have the potential to significantly reduce overall system costs and GHG emissions.