How Uganda, Ethiopia saved Kenya from power rationing
Power lines connecting pylons of high-tension electricity are seen from the power substation at the Lake Turkana Wind Power project in Loiyangalani District, Marsabit County, Northern Kenya on September 4, 2018.
Power imports from Uganda and Ethiopia surged 76.7 percent in the nine months to September as Kenya raced to avoid electricity rationing and curb blackouts.
Official data shows Kenya imported a record 1,137.84 million kilowatt-hours (kWh) or units from Uganda and Tanzania during the nine-month period.
This is a significant jump from 643.91 million units that Kenya imported from the two countries during the same period last year, according to the Kenya National Bureau of Statistics (KNBS).
This helped Kenya avert widespread power rationing in the wake of inadequate electricity from local generators, which declined by 0.6 percent to 9,339.5 million units during the period.
Power rationing would have upped the cost of doing business as firms and households seek generators to ease the inadequate electricity.
Economists reckon Kenya would have been forced to revise growth projections as the electricity curbs running for hours on alternating days would squeeze productivity, triggering job cuts and pay freezes.
Kenya’s reserve margin – the extra generation capacity available above demand – has shrunk to less than 4.0 percent, which contrasts sharply to the range of between 20 percent and 35 percent that is recommended by the International Energy Agency (IEA).
This exposes the country to blackouts or power outages during maintenance of plants or during breakdown of the electricity generators.
“During the last peak demand of 2239MW recorded on 21st August 2024, 6MW was load shed from the grid while the reserve margin was only 9MW against system requirement of 310MW,” said Energy and Petroleum Cabinet Secretary Opiyo Wandayi in September.
The decline in Kenya’s power generation was primarily driven by a significant drop in output from thermal plants, which went down to 815.58 million units from 1,127.63 million units.
This was caused by the removal of KenGen’s 60-megawatt (MW) Muhoroni Gas Turbine (GT) thermal plant from the grid last year.
This is after its power purchase agreement (PPA) with Kenya Power expired in April 2023. The plant, however, continued to dispatch power to the grid before it was finally discontinued in June 2023.
The government is, however, planning to sign a short-term PPA with KenGen to reinstate the Muhoroni GT to address the shortage.
Extended power rationing would have dealt a heavy blow to households and businesses. It is costly for businesses, especially large power consumers such as manufacturers to deploy alternative power sources such as diesel generators during a blackout.
Fuel prices remain prohibitive, with a litre of diesel currently retailing at Sh168.06 in Nairobi.
The frequency of power blackouts also remains high. According to Kenya Power, its customers experienced an average of 44.9 unplanned blackouts in the year to June 2023.
“What we are witnessing today has built up over time and is as a result of sub-optimal investment in energy infrastructure. The sector is looking into short-term and long-term interventions to address this challenge, including bringing onboard private sector capital to supplement government efforts,” said Mr Wandayi.
Further, the ban on PPAs since 2021 has ground procurement of new power plants to a halt. Prospective independent power producers (IPPs) have lobbied for the ban to be lifted without success.
Kenya has been exchanging electricity with Uganda for decades. The supply from Uganda is pivotal in supplying the Western region, which does not get electricity from the country’s main power generation hub at Olkaria in Naivasha.
Kenya also started to import 200MW from Ethiopia in December 2022 following the signing of a PPA between their two utilities in July of the same year. However, full commercial operations of the PPA between Kenya Power and the Ethiopian Electric Power (EEP) started a year later in December 2023.
Ethiopia generates surplus power from its 5,000MW Grand Ethiopian Renaissance Dam (Gerd).
Tanzania is poised to become the third country from which Kenya imports power. Last month, Kenya Power signed a power exchange agreement with the Tanzania Electric Supply Company Limited (Tanesco).
This will see Kenya import electricity from its southern neighbour in case of shortages.
The agreement came shortly after the completion of the construction of a high-voltage transmission line between the two countries.
Kenya’s electricity demand has been rising steadily in recent months, but local generation capacity remains constrained. The country’s peak demand hit a record 2,242MW in September 2024 against maximum available capacity of 2,344MW. This peak demand hit a fresh record of 2,282MW in October.
Kenya has been unable to onboard new generation plants due to the existing ban on new PPAs. The government is, however, betting on three new geothermal plants being commissioned in the next three years to guarantee enough local capacity, at least in the short term.
One of them is the 35MW power plant being built by Chinese firm Kaishan Renewable Energy Development Pte Ltd at Menengai in Nakuru County. The plant is expected to be commissioned in February 2026.
The others are the 35MW Globeleq plant, whose commissioning is expected late next year and KenGen’s 80.3MW Olkaria VII Geothermal Power Plant to be commissioned in 2027.
Kenya is also a member of the Eastern Africa Power Pool (EAPP), a group of 13 countries that want to trade electricity with each other to solve generation shortfalls. The countries are currently developing a market platform that is expected to come live in the second quarter of 2025 to enable power trade within the region.
