Economy

Spare power capacity falls to 7-year low

A  newly commissioned Sh378 million substation in Bahati Nakuru. FILE PHOTO | NMG
A newly commissioned Sh378 million substation in Bahati Nakuru. FILE PHOTO | NMG 

Kenya’s spare electricity capacity has dropped to lows seen seven years ago, raising the risk of blackouts in the event of breakdown of some power stations.

The country’s reserve energy margin — difference between maximum electricity demand and total available power that can be produced at any given time — is now 4.4 per cent, lower than the recommended 15 per cent.

Data from the Energy Regulatory Commission (ERC) shows available power in April stood at 1,723.7 megawatts (MW) against peak demand of 1,649.9, leaving spare electricity of 74MW compared to the required 264MW.

The diminishing reserve raises the risk of blackouts in an economy where power outages are common, partly because of an ageing energy network and insufficient generation capacity.

Many businesses in Nairobi and other big towns operate back-up generators, adding to the cost of doing business.

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

Analysts attributed the drop to rising demand amid sluggish supply.

“We have failed to better manage our hydropower stations by storing water during heavy rains and using it during droughts,” said Hindpal Jabbal, an energy consultant and ERC’s former chairman.

Kenya’s hydropower generation has dipped to more than 20-month low due to drought, cutting its share of power consumed by homes and businesses to 25 per cent from a high of 37 per cent early last year. Kenya relies on geothermal, hydro- and a bit of thermal power.

The reserve margin at 4.4 per cent returns Kenya to a power market that existed before 2011 when Kenya Power, the electricity distributor, announced daily power cuts lasting about three hours after a drought lowered water levels at dams.

Demand for electricity has grown, driven by industrial users and homes recently connected. Kenya’s peak demand is now at 1,649MW, having grown 12.7 per cent over the past four years from 1,463MW.

Kenya Power’s customer base has widened 168 per cent over the four-year period to stand at 5.9 million from 2.2 million in March 2013.

Countries are required to have surplus power capacity up to a given level, beyond which it translates to higher power bills as consumers are often charged for idle power plants.

Kenya has recently cancelled or shelved several mega power projects amid fears they would leave the economy with excess power, a situation that could see consumers pay billions of shillings for unused electricity.

The Energy ministry officials last year dropped plans to construct a 700-megawatt (MW) natural gas power plant in Dongo Kundu, Mombasa.

Energy PS Joseph Njoroge reckons that the plant risked leaving Kenya with excess power, forcing consumers to pay for capacity charges on idle plants and reversing the quest to deliver cheaper electricity.

Power producers are paid the capacity charge, based on their capacity to generate electricity, whether they supply to the grid or not.