The government has no choice but double efforts to come up with irresistible incentives that that will see potential businesses form a beeline for Kenya’s steam wells and wind farms.
Data from the Energy Regulatory Commission (ERC) shows that Kenya’s electricity reserve margins have dropped to levels last seen seven years ago.
The good thing about this is that it indicates the country’s power demand is thriving, which can be interpreted to mean a working economy.
It also reflects the government’s effort to connect as many homes and businesses as possible to the national grid is having an impact.
Indeed, Kenya Power #ticker:KPLC customer numbers have swollen from 2.3 million in March 2013 to 5.9 million, reflecting a 168 per cent growth.
The growing appetite for electricity should, however, worry the government when reserves are as depleted as it is today at 4.4 per cent against a recommended threshold of 15 per cent.
Kenya needs to understand and the concerned entities should find out how the country got to this thin margin that is now exposing the economy to blackouts, especially during breakdowns.
Indeed, some regions of the country have had to bear the brunt of outages in recent months, sending a signal that the razor-thin margins would move the country from a bad situation to worse.
The over-reliance on hydro power is another explanation for the reduced power generation, worsened by the prolonged drought. Kenya has failed to store water during heavy rains to use in the event of a biting drought to manage all-year power production.
At this time, it would also be necessary for the government to review why not many investors are seeking licences for renewable energy investment.
Without going into the specifics, the government has no choice but double efforts to come up with irresistible incentives that that will see potential businesses form a beeline for Kenya’s steam wells and wind farms.
It is also worth noting that government agencies like Kenya Electricity Transmission Company ought to burn the midnight oil, making sure that plants that are ready are put to use without delay.
That is how to win the confidence of the existing and new investors entering the capital-intensive and talent-heavy field of power generation.
The shrinking spare power capacity is a stark warning. The government should ensure that its energy agencies and the investment community are facilitated if Kenya is not to plunge into darkness and hurt the goals of growth to middle-income economy as envisaged in the Vision 2030 development blueprint.
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