Electricity losses by Kenya Power have remained above the allowed limit after years, highlighting the utility’s struggles to supply reliable power.
System loss is the difference between total net generation and energy sales on the system expressed as a percentage of net generation. These losses accrue from leakages due to illegal connections or shaky transmission.
An analysis shows that system losses hit 23.2 percent in December last year, meaning that the utility lost 1,578.9 Gigawatt-hours (GWh) that it bought between July and December.
Kenya Power has breached the limit on allowable electricity losses despite the Energy and Petroleum Regulatory Authority (Epra) increasing the allowable losses by five percentage points to 19.9 percent in July 2020.
The losses highlight Kenya Power's struggles to meet reliable supply, hitches that have forced homes and businesses to pursue alternative power sources, notably solar and biomass.
“In the review period, total system losses, both technical and commercial, totalled 23.2 percent, exceeding the 18.5 percent benchmark set by the Authority,” Epra says.
The losses stood at 23.49 percent in December 2022, up from 22.43 percent in a similar period of 2021 and 25.21 percent a year before. A rise in the system losses means more pain to the company given that the losses are not passed on to consumers.
Kenya Power booked system losses of 23.7 percent in July last year and closed the year at 25 percent.
The worsening system losses come even as Kenya Power maintains that cutting the losses is an integral part of its growth plan in a bid to boost its books. For example, the company had targeted to cut system losses to 20.93 in the year that ended in June 2023.
Kenya Power is grappling with a rising number of consumers switching to their own sources like solar and biomass as the users, especially firms, seek more reliable and cheaper electricity.
Large power consumers have in recent years stepped up efforts to set up their own power systems, triggering concerns from Kenya Power.
Bamburi Cement, East African Breweries Plc, and Strathmore University are some of the big consumers that have recently set up their own generation plants.
The breach of the allowable losses comes even after Epra increased retail tariffs to provide Kenya Power with more revenues needed to fund a revamp of its ageing transmission line.
The regulator increased tariffs by 15 percent to 20 percent on average from April last year, with Kenya Power set to take home at least 10 percent of the additional billions of shillings every year.
Kenya Power says the additional billions are key to upgrading its transmission line.
