Kenya Power raises alarm about costly electricity, rationing
The utility firm says the country’s installed capacity currently stands at 3,243 MW, with an effective interconnected capacity of 3,056 MW on the grid.
Kenya Power has raised the alarm about costly electricity and electricity rationing following the freeze on new power purchase agreements (PPAs) that has stopped the construction of new generation plants.
The moratorium, which has been in place for over three years, means Kenya Power cannot enter into new PPAs amid electricity supply scarcity that has forced Kenya to rely on imports from Ethiopia and Uganda.
Kenya Power has warned investors, business owners and homes to brace themselves for costly power on increased use of emergency thermal power—which can be installed in weeks—and disruption of supplies.
“Following the government moratorium on new PPAs which stopped onboarding of new generation plants as well as the renegotiation of any expired PPAs, there is a potential supply risk that may negatively impact generation adequacy to meet the country’s growing energy demand,” cautions Kenya Power in its latest annual report.
“This is likely to increase reliance on emissive thermal energy sources. As such, Kenya Power is continually engaging the government on the lifting of the moratorium.”
Former president Uhuru Kenyatta in 2021 and later MPs triggered the freeze following a probe of PPAs being negotiated with the utility and their input in steep electricity bills.
This has pushed Kenya into a power crisis that could prompt blackouts and power rationing running for hours on alternating days.
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 a breakdown of electricity generators.
Kenya’s power imports from Uganda and Ethiopia surged 76.7 percent in the nine months to September as the country raced to avoid electricity rationing and curb blackouts.
Official data shows Kenya imported a record 1,137.84 million kilowatt-hours (kWh) 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 increased 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.
The share of thermal energy in the national grid closed June 2024 at 8.24 percent as geothermal, hydro, solar and wind made up more than 90 percent of the power.
Ramping up thermal sources will pile pressure on power bills through the fuel cost charge—the levy Kenya Power uses to pay the thermal plants.
Kenya’s peak demand has been growing in the last five consecutive years, hitting 2,177 MW in the year ended June 2024 from 2,149 MW a year earlier. The peak demand stood at 1,926MW five years ago.
Kenya Power’s annual electricity sales crossed 10,000 gigawatt hours (GWh) in 2023 and closed the year under review at 10,516 GWh.
The power distributor projects that in the next four years, demand for electricity will grow to 2,815MW.
The rising demand for electricity saw Kenya Power introduce load shedding to some of the customers in August.
Load shedding is the process through which a power distributor cuts supply to customers during periods of high demand and inadequate supply in bid to prevent the grid from collapsing.
The utility firm says the country’s installed capacity currently stands at 3,243 MW, with an effective interconnected capacity of 3,056 MW on the grid.
Given that 635 MW is derived from wind and solar sources, which are intermittent in nature, Kenya Power says this has hindered the system‘s ability to meet peak demand, prompting load management.
