Davis Chirchir, the Energy Cabinet Secretary. He said industrialists will enjoy a discount of 40 per cent on the electricity bills between 11pm and 5am. FILE | NATION
What you need to know:
Kenya Power will in January start offering cheaper off-peak electricity tariffs to industrialists to lower the cost of production and drive manufacturers to overnight production that will lower power demand.
Manufacturers have been demanding discounts of up to 50 per cent before shifting production to late night shifts, but Kenya Power maintained that such a cut could push it into losses.
Industrialists have welcomed the off-peak power plan, but say the discount must be adequate to compensate for the additional costs that come with operating during the night such as expensive labour, security and transport.
Kenya Power will in January start offering cheaper off-peak electricity tariffs to industrialists to lower the cost of production and drive manufacturers to overnight production that will lower power demand.
Energy secretary Davis Chirchir Thursday said the industrialists will enjoy a discount of 40 per cent between 11pm and 5am.
This will encourage manufactures to shift some of their production to the off-peak period in a move that will lower demand for power during peak hours as Kenya struggles to meet the electricity needs of households and businesses.
Large commercial and industrial customers account for 40 per cent of the total power consumption, according to Kenya Power data.
Shifting industrial production to night shift is one of several options the Government is pursuing to lower the cost of production that will ultimately reduce the cost of consumer goods and make Kenyan products competitive in the international market.
“If we give a 40 per cent discount on the electricity bills of millers, they will be expected to lower the prices of maize flour by some margin,” said Mr Chirchir. The discount is expected to kick off the delayed introduction of the cheaper off peak tariff, which was first mooted in 2008.
Manufacturers have been demanding discounts of up to 50 per cent before shifting production to late night shifts, but Kenya Power maintained that such a cut could push it into losses.
Ministry of Energy officials reckon that the country consumes less than half the peak power demand between midnight and 5am.
The peak time stretches from 9am and climaxes at between 6pm and 9pm when Kenyans return home from work switching on house lighting, cooking appliances and TVs.
Industrialists have welcomed the off-peak power plan, but say the discount must be adequate to compensate for the additional costs that come with operating during the night such as expensive labour, security and transport.
Industrialists have in recent months become sensitive to input cost increases, fearing it would blunt their competitiveness in the regional and global markets where pricing is factor for market share growth.
They on average pay about Sh16 per unit of power, which is higher compared to Sh2.60 for their Asian competitors.
