Economy

Kenya Power cuts cost of connecting homes to grid

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Kenya Power staff repair power lines in Nyeri. The utility firm has tendered for a novel single phase supply system that is expected to lower the cost of electricity connections. PHOTO | FILE

Electricity distributor Kenya Power is adopting use of a new transmission lines design that is expected to cut the cost of connecting new consumers to an average of Sh30,000.

The design, to be applied mainly in rural areas, will see Kenya Power use fewer cables and poles to connect households to the national grid.

Known as the Single Wire Earthing Return (SWER) system, the design allows the power distributor to pull down connection costs from the current average of Sh105,000 for homes seeking supply within a radius of 600-metres from a transformer.

Lower cost of connection is to be realised through use of single, thinner and lighter cables as opposed to the current system that uses two or four cables to connect domestic consumers.

Kenya Power is also planning to cut costs by using smaller poles that will be spaced 100 metres apart instead of the current 50 metres.

“We are going to save on every aspect and this should bring down connection rates within the 600 meter radius to an average of Sh30,000 from the current Sh105,000,” Ben Chumo, the managing director of Kenya Power said.

Use of the new technology comes as the Jubilee government races to meet its target of connecting one million new customers to the national grid in the fiscal year ending June 2015.

READ: Kenya Power targets 1 million new connections this fiscal year

The twin obligations of meeting set government targets and shouldering the burden of higher connection costs had left Kenya Power in a fix – especially after the government withdrew a Sh2.7 billion subsidy it had offered to plug the financing gap between the market cost of Sh105,000 and the Sh35,000 paid by consumers living within 600 metres radius of a transformer.

“We have been overdesigning by using three phase (commercial users) networks to connect new consumers yet 98 per cent of new applicants are single phase users (domestic). It’s like using a sledge hammer to kill a fly,” Dr Chumo said.

SWER is a single phase supply system with a single conducting line that uses the earth as the return conductor. Metal rods are driven two or three meters into the ground to provide the earth connection.

Experts said that besides lower material costs, the SWER design cuts other costs such as labour and transport expenses and allows for faster development of the network.

“We will make savings on conductors, pole size and population as well as transport and labour because of reduced use of materials. These benefits will be transferred to our new customers,” Dr Chumo said.

The new poles are similar to those hitherto used by Telkom Kenya to carry telephone lines. The average price of the bigger poles that Kenya Power uses is Sh12,000 compared to Sh8,000 for the smaller poles. The conductors (cable) will be 25 millimetres squared compared to the current 75mm² to 100mm².

SWER has been extensively used in New Zealand, Australia, Brazil, Canada and India in sparsely populated areas.

Kenya Power on Tuesday invited, through a tender notice, bidders to supply materials for the SWER project, including isolation and distribution of transformers, top pole steel brackets, cables and conductors and earth enhancement compound.

READ: Kenya Power tenders for Sh10bn street lighting

In 2013, Kenya Power’s attempt to double the connection fee to Sh70,000 for those living near transformers was stopped on grounds that it would lock out homes and entrepreneurs from accessing electricity.

Kenya Power had, until the withdrawal of the Sh2.7 billion subsidy, been levying a fixed charge for electricity connections as per the rates introduced in 2004 to deepen access to electricity.

The utility company argued that the cost of materials, labour and transport had significantly increased since 2004 necessitating an upward review.

It was at this point that the Treasury introduced the subsidy to support the programme which lasted up to June this year before it was withdrawn.

Currently, homes and business outside the 600-metre radius from a transformer are charged at market rates that run into hundreds of thousands of shillings.

SWER is hinged on a mega government power expansion plan dubbed the Last Mile Connectivity Project (LMCP) on which the state plans to spend Sh58.2 billion in the next three years to supply electricity to remote areas and place the bulk of unconnected homes closer to transformers.

“To reduce the cost burden of increased connectivity on KP, as well as reduce the amount paid by the customer to connect to the grid, the strategy proposed is to extend the distribution network to be as near the customer as possible using external or government funding,” says the LMCP environmental impact assessment report.

“Thereafter, the cost of connecting customers can be at the maximisation rate based on the new average actual cost.” With the new SWER system, the actual cost will now reduce significantly.

The new design is expected to boost connections by one million in the current fiscal year, representing a 36 per cent growth on Kenya Power’s customer base of 2.8 million users.

This is in line with the government’s plan to increase electricity penetration to 70 per cent of households by 2020, up from 32 per cent.
About 443,254 customers were connected to the grid in the year to June, up from 307,000 the previous year.

The connection of public schools to the national grid as part of the free laptop plan is also expected to take electricity closer to homes and shopping centres currently without power.

The Rural Electrification Authority has connected 82 per cent of the 21,222 listed public schools and plans to link the remaining 4,000 schools by April 2015.

The race to connect more customers is also linked to a need to absorb the growing amount of power being generated from new sources like geothermal.