Geothermal shutdown denies consumers cheaper electricity

The shutdown of geothermal power plants has cut generation of renewable energy to a 22-month low in September, denying homes and businesses cheaper power.

Industry data shows that the country consumed 335.4 million kilowatt hours (kWh) of geothermal power in September, the lowest level since November 2014, compared to 345 million units a month earlier and 392 million units in January.

This prompted Kenya Power to rely more on expensive diesel-generated power to meet consumers’ electricity needs.

Officials Sunday said the 70-megawatt (MW) plant at Olkaria I unit IV in Naivasha was pulled off the grid for a month for inspection by the contractor after the warranty period ended. 

“The plant is now back and we expect the total units generated to go up this month,” said Simon Ngure, director of regulatory and corporate affairs at the Kenya Electricity Generating Company (KenGen), the country’s major power producer.

The plant shutdown cut the share of geothermal energy used by consumers to 40.5 per cent from 48.5 per cent in January, behind hydropower.

The share of thermal power in the grid increased to 16.5 per cent last month from 16.1 per cent in August with Kenya Power using 136 million units from the fuel powered generators, compared to 93 million units in January.

The rising share of thermal power has seen electricity prices remain unchanged since January because the fuel cost charge, which is linked to the amount of power generated from diesel, remained unchanged at Sh2.31 per unit since the start of the year.

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The levy, which is adjusted every month by the ERC, has remained static despite fuel prices coming down in recent months on lower crude costs.

Official data shows that homes consuming 200 units monthly paid Sh3, 361 in September and August compared to Sh3,398 in January. Users of 50 units paid Sh525 last month and Sh534 in January.

Kenya relies on an energy mix comprising geothermal, hydropower and thermal sources, which cost Sh7 per kWh, Sh3 and Sh17 respectively.

KenGen said another 33 MW plant at Olkaria II was shut down in June for routine maintenance, which saw the share of hydropower supplied to the grid overtake geothermal for the first time since July 2014.

The plant is back on the national grid, according to KenGen, but another smaller plant at Olkaria I unit III with a capacity of 15 MW is still out.

The energy regulator has in the past raised concern of the reducing share of geothermal power in the nation grid due the shut-downs.

Geothermal energy generation overtook hydropower two years ago after the country added 280 MW of steam power to the grid between July and December of 2014. This led to lower power bills on reduced share of expensive thermal power.

Kenya’s highest level of geothermal energy generation and consumption stood at 403 million units in May before dropping to 335 million units last month.

Last month’s cutback in geothermal saw the share of hydropower grow to 42 per cent last month, up from 39 per cent in January.