Kenya Power plunged the country into its third nationwide blackout in five months on Sunday. The frequent outages have been blamed on ageing transmission lines that expose many businesses and households to financial losses.
The most recent interruption happened on Sunday at 7:30pm after an overloaded Kisumu-Muhoroni 132 kilovolt (kV) line tripped.
Customers have been grappling with unreliable supply from Kenya Power, with blackouts averaging 8.5 hours in a month as of December last year, highlighting the impact of the unreliable grid. But just how much does the Kenyan economy lose in an hour of a nationwide blackout?
Computing the estimated economic loss as a result of the outages is no easy feat.
However, we will attempt to paint a picture of how and what the economy loses when the country plunges into darkness for such a prolonged time.
Heavy commercial and industrial firms are the biggest customers of Kenya Power by unit sales, accounting for 54 percent (5,137 GWh) of the firm’s electricity sales (9,539 GWh) in the year ended June 2023.
Manufacturing, the fourth-biggest sector in the country, with its output recorded at Sh1.04 trillion in 2022, is among the worst-hit sectors by power interruptions.
If a power interruption hits the whole country and paralyses all manufacturing activities, assuming no single manufacturer will use an alternative power source for the whole period, then the sector bleeds approximately Sh119.4 million per hour.
Related losses
These estimations carry a lot of assumptions none of which are practical in the real-world setting given that production varies with different times of the day and the day of the week.
Domestic power consumers form the majority by number reported at 8.6 million in June, representing 95 percent of the total utilities’ customer base.
With most of these interruptions happening at night during peak time domestic customers and other small businesses face losses resulting from damaged food stuff, forgone sales as a result of early closures and other power outage-related losses.
According to the 2019 population census, half of Kenyan households primarily depend on mains electricity as their main source of lighting fuel with the other half dependent on other alternatives.
Therefore, it is still a challenge to come up with an exact financial loss to the economy as a result of power interruptions.
