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Economy

Poll jitters cut power demand to 4-month low

Workers fix a street light on an power pole in Eldoret, Uasin Gishu County. file photo | nmg
Workers fix a street light on an power pole in Eldoret, Uasin Gishu County. file photo | nmg  

Electricity demand dropped to a four-month low in the period that Kenya held its general election, reflecting a cooling of economic activity and lower revenues for electricity distributor Kenya Power #ticker:KPLC.

Data from the Energy Regulatory Commission (ERC) shows that power consumption fell 5.4 per cent to 841.4 million kilowatt hours (kWh) in August, from a historic high of 889.9 million units a month earlier.

Manufacturers ramped up output ahead of the polls to avert shortages in the event of interruptions, firing up demand in July, according to the Kenya Association of Manufacturers (KAM).

Last month’s consumption was the lowest since April when homes and businesses bought 837.9 million units, the ERC data shows.

“There is a general slowdown. Some companies have slowed down while others have closed. Others had doubled production ahead of the polls and will only resume full operations after clearing stock in their go-downs,” Kenya Power responded to queries.

Kenya Power has 6.2 million customers, out of which 6,800 are large-scale power users — industries, commercial offices and institutions — who account for about 60 per cent of power sales.

Large power users are those that consume a minimum of 15,000 kilowatt hours (kWh) per month.

Half of the users are in Nairobi’s Industrial Area and central business district.

The prolonged elections have dampened the country’s economic prospects with businesses shelving investment plans ahead of the repeat poll next month.

Electricity consumption could as a result take a further dip in coming months, narrowing revenues for shareholders of listed power distributor Kenya Power.

The utility firm has been riding on increased sales to grow its bottom line.

The country is set to hold a repeat poll on October 26 after the Supreme Court nullified the results of the August 8 presidential election citing irregularities in the tallying process.

Kenya lowered its 2017 economic growth forecast to 5.5 per cent due to drought and political uncertainty.

The country’s peak demand – maximum power ever consumed – stands at 1,699 megawatts (MW) compared to its total power capacity of 2,325 MW, leaving a surplus of 626 MW.

The reserve power often takes care of emergency situations like when several plants are taken off the national grid during maintenance or unforeseen breakdowns.

Kenya’s peak demand has steadily increased from of 1,463 megawatts in 2013, marking a 16.1 per cent growth in the past four years.

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