Wind and solar power producers face tough times following a plan to review energy supply versus demand with a view to freezing them.
According to sector regulator, due to poor uptake, producers are now having to wait as the government comes up with an energy auction plan before cashing in their multibillion- shilling investments
Epra said the review on proposed projects in line with the revised demand-supply balance, will cause some to be delayed to minimise increase in energy and imminent rise in generation tariffs.
Wind and solar power producers face tough times following a plan to review energy supply versus demand with a view to freezing them.
According to sector regulator, due to poor uptake, producers are now having to wait as the government comes up with an energy auction plan before cashing in their multibillion- shilling investments
The Energy and Petroleum Regulatory Authority (Epra) said the review on proposed projects in line with the revised demand-supply balance, will cause some to be delayed to minimise increase in energy and imminent rise in generation tariffs.
“In order to forestall the possibility of excess energy in the system, Epra plans to undertake revision of the demand –supply balance and factor in the impact of Covid-19. The regulator will also suspend issuance of commissioning dates for solar and wind projects under the Feed-in Tariffs Policy (FiT) Policy, to provide room for the development of renewable auctions system by the Ministry of Energy which targets the intermittent technologies,” Epra said in a statement.
Under the FiT policy, producers sell renewable energy generated to Kenya Power at a pre-determined tariff signed in the purchase agreements.
The auction system will see the government first specify required power supply and then allow generators to bid for the same at a particular price. The lowest bidders are signed in to supply the energy over a period of time.
Epra is also expected to carry out a comprehensive study on ancillary services requirements for the system, including battery storage, pumped storage and reactive power compensation, to rate how much power from wind and solar sources can be contained in the generation mix.
Earlier energy projections had estimated an annual growth in demand at between 7.3 and 9.6 percent.
Kenya Power now estimates that the electricity demand will remain lower than projected, growing by approximately 2.3 percent in the next 10 years.
This is way below the 10-year average of 5.9 percent and far from the 7.3-9.6 percent used in 2013 to plan for the ambitious 5000MW of power generation.
Low energy uptake may be attributed to prevailing economic conditions and increased grid defections as the cost of solar power continues to decline.
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