Vivo Energy Kenya cut its reliance on Kenya Power by 156 megawatts (MW) last year, becoming the latest big power consumer to reduce consumption of relatively more expensive electricity from the State utility firm.
The parent firm of the Kenyan oil marketer said that it installed a 150 kilowatt (kW) solar plant at its terminal in Nairobi, cutting supply from Kenya Power by an estimated 13,000 kilowatt hours (kWh) per month.
The oil marketer is the latest big electricity consumer to install its own power generation plants in a bid to reduce costly and unreliable supply from Kenya Power, joining others such as Kenya Breweries, Bamburi Cement and Carbacid Investments.
The shift by the big firms, which have traditionally been the biggest market segment for Kenya Power, dims efforts by the State firm to grow sales and remain on the profit path.
“In Kenya, we installed a 150 kW solar PV system at our Nairobi terminal. As a result, we have been able to reduce energy consumption at the depot by around 13,000 kWh per month, reducing carbon emissions and saving electricity cost,” Vivo Energy said in disclosures.
The revelations by Vivo Energy offer a glimpse into the savings on power bills that big consumers are making through the use of their own power generation plants, mainly solar and biomass.
Vivo Energy did not, however, disclose the amount of money that it saved in the period under review with the company set to roll out alternative power systems at most of its depots and retail stations in Kenya and globally.
“We are including on-site solar power at newly built and rebuilt retail sites where possible. In 2023, we added solar to 95 sites and two depots,” the company added.
Vivo Energy Kenya, which is a subsidiary of the British-owned petroleum company, is the biggest oil marketer in Kenya, with a market share of 22.07 percent and 315 fuel stations locally.
Firms have cited costly electricity and high frequency of power outages for the decision to explore their own power generation, presenting a major headache for Kenya Power.
Kenya Power reported a net profit of Sh316 million in the six months ended December last year, on account of increased electricity sales and higher tariffs that lifted it from a net loss position of Sh1.15 billion a year earlier.
The cost of electricity went up by between 15 percent to 20 percent on average from April last year after new tariffs were approved, setting up Vivo Energy and other big consumers for increased operational costs.
Big electricity consumers (industrial and commercial) account for at least 65 percent of Kenya Power's electricity sales, highlighting why the continued exodus from this segment is a major blow to the State-owned electricity distributor.
Own-source power generation by firms and homes surged 60 percent to 449.5MW last year from 280.76MW in 2022.
