Economy

Power consumers to pay Sh700m fine on delayed Turkana grid connection

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Energy secretary Charles Keter at the State House Energy Summit on July 27, 2016. PHOTO | EVANS HABIL

Homes and businesses will pay a fine of Sh700 million monthly through their power bills should the government fail to construct a power line connecting Lake Turkana Wind Power project to the national grid by January.

The 310 megawatt (MW) project, originally aimed for start-up in 2011, has been delayed in part because it was awaiting a 428km high-voltage line linking the area.

The transmission line was approved in August 2014 and the government agreed to pay owners of the mega wind farm a monthly compensation should there be delays in injecting power to the grid after January 2016.

The line was expected to be completed by October to harvest the first 50 megawatts that the developers expect to commission in September.

Construction of the high-voltage line has been hit by delays blamed on land compensation hiccups in the areas it traverses like Nyandarua, Laikipia and Marsabit.

READ: Sh15bn wind power plant up for auction in land row

Kenya Electricity Transmission Company (Ketraco), which is overseeing the construction of the line, said that construction of the 428-kilometre high-voltage power line is 52 per cent complete.

“We are racing against time to ensure the line is complete by December 31 to avoid the penalty of Sh700 million a month,” Ketraco managing director Fernandes Barasa said Wednesday on the sidelines of an energy summit at State House, Nairobi.

Kenya Power on Wednesday said it is not feasible to buy the first batch of wind power for distribution to consumers from September as stipulated in the power purchase agreement (PPA) with Lake Turkana Wind Power Ltd – the developers.

“There is a provision to review the PPA in case of major changes,” said Kenya Power managing director Ben Chumo.

Kenya Power collects revenues from consumers for onward remission to power producers. The Sh20 billion line will transport electricity from the Lake Turkana wind power project in the northern town of Marsabit to the national grid at Suswa substation in Narok.

The full 310MW from the wind farm, the largest in Africa, will be injected to the grid by July 2017.

It will rival other big African wind schemes in Morocco and Egypt and change Kenya’s power generation mix that mainly comprises expensive thermal generators, geothermal and hydro power.

Kenya aims to expand installed capacity to about 6,700MW by 2017, up from 1,700 MW in 2013.

Lake Turkana Wind Power will sell electricity to Kenya Power at Sh8.5 per unit (8.42 US cents) under a 20-year power purchase agreement.