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Share of electricity lost to theft and transmission dips to 7-year low
Kenya Power Managing Director Joseph Siror during the release of the company's half year financial results at Stima Plaza in Nairobi on January 31, 2025.
The share of electricity that Kenya Power loses shrank to 21.2 percent in the year to June 2025 —the lowest in seven years— as the firm reaps the benefits of the smart meter rollout and revamping of the ageing lines.
This is a drop from the 23.16 percent for the previous year. The last time that the system losses were lower was 21 percent in the year ended June 2018.
Kenya Power last year started installing smart meters, targeting large consumers and small businesses to track consumption more accurately and in turn cut commercial losses due to theft and billing errors.
Electricity theft and an aging network are the biggest components of system losses to Kenya Power, highlighting why the firm is keen to spend billions of shillings to revamp the system.
Reduced system losses are a boost to Kenya Power given that the firm can only transfer the losses to customers up to a given limit and then absorb the rest in its books.
“Total system losses reduced from 23.16 percent to 21.21 percent driven by smart meter roll-out, network reinforcements and system upgrades and enhanced energy accounting,” Joseph Siror, the managing director of Kenya Power noted in a statement.
Installation of the smart meters is part of the project where the firm invested Sh29 billion in the year under review. The firm also revamped aging lines and upgraded substations in areas with high customer growth.
At 21.2 percent, the system losses for the year to June 2025 are still higher than the cap of 17.5 percent set by the energy regulator for the period under review.
System losses refer to the electricity that a distribution firm buys but loses it to theft in illegal connections and energy dissipation in the course of transmission.
The drop in the amount of power lost came at a time when electricity sales grew by 887 Gigawatt-hours (GWh) to 11,403 GWh but net profit fell 18.6 percent to Sh24.47 billion due to reduced electricity prices.
System losses can either be technical or commercial. The technical losses are caused by resistance of the conductors along the transmission network while the commercial ones are tied to illegal connections or metering errors.
A growing customer base and increased transmission network directly leads to higher system losses. This is made worse if most of the transmission lines are low voltage.
Kenya Power’s customer base currently stands at 10.06 million compared to 9.6 million a year ago. The increased numbers have forced Kenya Power to extend the low-voltage network and thus higher rates of energy dissipation.
The firm has over the years struggled to cut the amount of electricity lost to illegal connections especially in the informal settings
Kenya Power has set an ambitious target of cutting system losses to 15.5 percent by 2028. The firm is banking on grid digitisation and increased revamp of the system to achieve this target.
