Aggreko’s power generators. The firm has earned Sh10.9 billion from supplying Kenya with emergency, diesel-generated power in the past decade. PHOTO | FILE
What you need to know:
ERC has directed KenGen to relocate one of its 30 megawatts (MW) gas turbines from Embakasi to Muhoroni, effectively displacing Aggreko’s temporary power plant.
Aggreko owns a 30MW thermal plant in Muhoroni and raked in Sh326.2 million in sales after supplying 62.7 gigawatt-hours (GWh) of emergency electricity supplies to Kenya Power last year.
The imminent shutdown of Aggreko’s Muhoroni plant means the firm will only be left with the 3.4MW Garissa emergency power plant.
Kenya’s energy industry regulator plans to terminate the use of Aggreko’s expensive emergency power in March next year, marking the end of an era for the British electricity generator.
The Energy Regulatory Commission (ERC) has directed KenGen to relocate one of its 30 megawatts (MW) gas turbines from Embakasi to Muhoroni, effectively displacing Aggreko’s temporary power plant.
The Glasgow-based temporary power firm owns a 30MW thermal plant in Muhoroni and raked in Sh326.2 million in sales after supplying 62.7 gigawatt-hours (GWh) of emergency electricity supplies to Kenya Power last year.
Aggreko has earned Sh10.9 billion from supplying Kenya with emergency, diesel-generated power in the past decade, underlining the lucrative nature of the deal.
ERC director general-general Joe Ng’ang’a said the expensive Aggreko power was only being used to stabilise power supply to Western Kenya, which suffers low voltages. The area is not connected to the 280MW of geothermal power from Olkaria.
“We have told KenGen to relocate a gas turbine to Western Kenya. The Aggreko will be terminated upon commissioning of the 30MW gas turbine in Muhoroni,” said Ng’ang’a.
“We only need the gas turbine in Muhoroni to address the current poor voltages problem being experienced in Western Kenya,” he said. The ERC chief said Kenya no longer needs the expensive Aggreko power following injection of cheaper 280MW of steam power from Olkaria.
The imminent shutdown of Aggreko’s Muhoroni plant means the British company will only be left with the 3.4MW Garissa emergency power plant.
The regulator has also suspended licensing of new diesel-fired plants, after Kenya Power added two costly diesel generators on-stream - Gulf Power (80.32 MW) and Triumph Power (77 MW) – in the year to June 2015.
Emergency power is priced at US¢18 per kilowatt-hour, nearly double the cost of thermal power which is ¢10 per unit, geothermal (¢7), Mumias co-generation (¢6) and hydropower is cheapest at ¢3 per kWh.
Kenyans consumed 5.13 million units of emergency power in November, an increase from the 4.9 million units in October, according to fresh data from ERC.
Kenya first turned to emergency power in 2001 after suffering power shortages due to a prolonged drought that exposed the economy’s overreliance on hydro power.
Aggreko, Cummins and Deutz were contracted to supply 105MW of temporary power to address the shortfall in meeting demand by households and manufactures.
Again, in 2006, Aggreko was awarded a deal to supply an additional 100MW of emergency power. KenGen managing director Albert Mugo said it will cost $4.3 million to move and install the 30MW gas turbine in Muhoroni, which will be ready by end of March 2016.
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