Rising power demand denies consumers cheaper electricity
A Kenya Power worker inspects a transmission line. PHOTO | FILE
What you need to know:
Sharp rise in demand for power last month prompted Kenya Power to step up the use of expensive thermal power, denying consumers cheaper electricity at a time when the use of low cost geothermal also increased.
Recent El Niño rains were expected to increase the share of hydropower and further cut that of expensive thermal energy.
Rising demand for electricity has seen power bills remain unchanged in February on increased use of thermal power.
This comes despite increased injection of cheaper hydropower which rose to a two-year high following recent El Niño rains.
Data from the Energy Regulatory Commission (ERC) indicates that the fuel adjustment levy, which is linked to the amount of power generated from expensive diesel, remained at Sh2.31 for every unit of electricity consumed this month.
Hydropower generation rose sharply from 306.6 million kilowatt hours (kWh) in December to 322.7 million last month-- the highest level since January 2014.
But the sharp rise in demand for power prompted Kenya Power to step up the use of expensive thermal power, denying consumers cheaper electricity at a time when the use of low cost geothermal also increased.
Use of electricity in January rose by 34 million kWh to 820 million units, a pointer that Kenyans plugged in more gadgets to power and increased economic activity.
The rains were expected to increase the share of hydropower and further cut that of expensive thermal energy.
Electricity producer, KenGen, in December announced it had stepped up hydropower generation and forecast lower bills on account of lower fuel adjustment levy.
The expected benefits were wiped out by an increase in expensive thermal power that was injected to the national grid.
The ERC data shows that thermal power consumption grew to 97 million units (accounting for 11.8 per cent) last month from 92 million units in December, marking increase of five million units.
Geothermal power consumption rose to 392 million units (47.8 per cent) from 387 million units, or an increase of five million units.
Power bills in Kenya are made up of a fixed charge, a demand fee and a monthly variable—fuel and foreign exchange adjustments.
The energy regulator every month receives power consumption data from electricity distributor Kenya Power to review the fuel cost levy and forex charge, which also remained unchanged at Sh1 per unit.
ERC uses data from the previous month to calculate the monthly variables.
Hydropower is Kenya’s cheapest power source and is unreliable since it is dependent on weather. This has prompted a diversification plan hinged on renewable energy, especially geothermal.
The country injected additional 280 megawatts of geothermal energy to the grid in the second half of 2014 that cut usage of expensive thermal power.
Geothermal power is priced at about Sh7 per unit, thermal (Sh18) and hydropower is the cheapest, at Sh3.
Last August, the energy regulator put power utilities on the spot for not aggressively pursuing cheaper hydropower despite increased water levels in dams.
This came after the fuel levy hit a nine-month high of Sh3.11 per unit at the time. The ERC faulted the heavy uptake of thermal electricity and directed Kenya Power to revert to a mix that will stop the cost surge.
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