The number of customers connected to the power grid has quadrupled to 4.1 million over the period from one million in 2010. PHOTO | FILE
What you need to know:
Official statistics show that power consumption rose to 1,569 megawatts (MW) last October — the highest level yet in the country’s history — from a peak of 1,512 MW the previous year.
The ERC estimates that power demand could grow by up to 80 per cent in the next four years to 2,834 MW.
The number of customers connected to the power grid has quadrupled to 4.1 million over the period from one million in 2010.
The demand for electricity hit a record high last year as companies expanded their operations and more homes and schools got connected to the national power grid.
Power consumption rose to 1,569 megawatts (MW) last October — the highest level yet in the country’s history — from a peak of 1,512 MW the previous year, according to official statistics.
Power consumption is often a clear indicator of activity in an economy, with industrialised and advanced nations swallowing huge amounts of the utility every year.
Kenya, East Africa’s largest economy, has steadily grown from a peak demand of 1,463 MW in 2013, according to the Energy Regulatory Commission (ERC) data, highlighting the pace of economic activity in the country.
“Economic growth enables more consumers to get connected and existing ones to use more power, leading to an increase in demand from time to time,” ERC director-general Joseph Ng’ang’a said.
The ERC estimates that power demand could grow by up to 80 per cent in the next four years to 2,834 MW.
Kenya’s economic growth has averaged five per cent in the last six years, driven by the private sector activity and an expanding middle class.
The number of customers connected to the power grid has quadrupled to 4.1 million over the period from one million in 2010.
The growing power demand for productive activities bodes well for the economy as sector players have in recent past faulted the State’s plan to inject an additional 5,000 MW to the grid by 2017, citing lack of capacity to absorb it.
Kenya Power, the electricity distributor, plans to light 314,200 additional homes by next year at a cut-price in what is set to trigger village economies and boost the welfare of the rural folk.
The utility firm will this year connect homes to the power grid for Sh15,000, down from Sh35,000 previously, and will allow those connected to pay the fee over 36 months under a government-backed programme.
Increased energy activity saw the sector post double-digit growth in the first nine months of last year, powered by increased geothermal and hydro-electric power generation alongside additional connection of homes and schools to the national grid.
The country injected 280 MW of geothermal power to the grid in the second half of 2014, lifting installed power generation capacity to 2,294 MW and exerting downward pressure on power bills.
Geothermal energy consumption last October hit the highest level in Kenya’s history at 402.1 million units (kilowatt hours), accounting for 49 per cent of total units consumed.
The country relies on an energy mix comprising geothermal, hydro-electric and thermal sources. Due to high costs, thermal electricity is only connected to the grid after supply of cheaper hydro-electric and geothermal electricity has been exhausted.
Power demand is at its highest between 6 p.m. and 10 p.m. when Kenyans return home from work and switch on house lighting, cooking appliances and TV sets.
“This five-hour evening window is where diesel plants come in, which are quite flexible to start and stop based on the short-period demand,” says Mr Ng’ang’a.
Power needs are set to grow exponentially as the country seeks to industrialise by 2030 for growth and wealth creation.
Kenya last September launched a grand industrialisation roadmap for the creation of agro-processing hubs, industrial parks and special economic zones, which will consume huge amounts of electricity.
A number of mega projects are also being developed, including the standard gauge railway, whose passenger and cargo stations will be powered by electricity, airport expansion and the Lamu Port Southern Sudan-Ethiopia Transport (Lapsset) Corridor, which will have huge power needs.
Officials target an installed power capacity lift from the current 2,294 MW to 6,766 MW in 2020 to meet a growing demand that is expected to hit 2,834 MW over the period.
To achieve this, a number of projects have been lined up, including a coal plant, wind farms, solar plants and a series of new geothermal wells.
Market reports show the local economy has been on a rebound in recent months after battling a climate of high interest rates in the third quarter of 2015.
Businesses enjoyed faster growth rates last November and December, boosted by rising demand for goods and services that spurred higher output and opening of new branches, a survey by CfC Stanbic shows.
The World Bank, which partly uses night light intensity to measure economic activity, says Kenya’s low-cost connection model will trigger growth.
“As more citizens get connected to electricity, this should have a direct positive impact on growth and economic activity, as well as improve their welfare,” World Bank lead economist for Kenya Apurva Sanghi told the Business Daily.
The plan, dubbed Last Mile Connectivity Project, was launched by President Uhuru Kenyatta in May 2015, but faced implementation delays.
The lower connection fee is set to remove a major hurdle to acceleration of rural electrification and spur village economies as residents open up businesses like welding, barber shops, boutiques, hotels and cybercafès.
Unlike the past when home owners had to make applications for connection, Kenya Power will now approach potential customers in the neighbourhood and offer to hook them to the grid.
The government hopes to use the scheme to double connected homes to 70 per cent by 2017.
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