Uptake of expensive thermal energy hits four-year high

Kenya Power workers at work along Nyerere Avenue in Mombasa. FILE PHOTO | KEVIN ODIT | NMG

The share of thermal energy fed to the national grid hit a four-year high in the first nine months amid a sustained decline in electricity drawn from the hydro dams.

An analysis of data from the Kenya National Bureau of Statistics (KNBS) shows that Kenya Power tapped 1,232.03 gigawatt hours (Gwh) in the nine months to September last year, increasing the share of thermal power to the national power mix to 13 percent from 9.3 percent in a similar period of 2021.

Kenya Power increased uptake from the fuel generators in the period to cover up for the declining contribution from hydro sources even as the share of geothermal power stagnates over the years, driving up power bills for consumers.

The uptake has been attributed to the drought that led to low water levels in hydropower plants, interruption of the Loiyangalani-Suswa transmission power line and unplanned outages at some of the Olkaria geothermal wells.

The last time the share of thermal power to the national grid was higher was in the first nine months of 2018 at 7.8 percent or 1,287.02 Gwh.

Increased use of thermal power derails the move to provide cheaper and renewable power as the costs are passed to consumers in the form of the fuel adjustment surcharge— a big chunk of the electricity bills.

“The Company is enhancing the uptake of renewable energy to further green the energy mix, reduce thermal generation and lower the cost of electricity,” Kenya Power disclosed in its latest annual report.

The share of hydro-power to the national mix dropped to 24.8 percent in the first nine months of last year from 30.2 percent in 2021 while geothermal marginally fell to 42.47 percent from 43.3 percent in the period.

Increased supply from dirty diesel-run thermal plants translates to high bills because the power plants must be compensated for the electricity supplied to the grid even if it is not used.

Kenya Power turns to thermal plants to meet demand and ensure stable supply at peak times but low rains that hurt hydro levels further led to increased reliance on dispatch from the thermal plants.

Increased uptake of electricity from dirty fuel generators continues to hurt Kenya Power’s efforts to provide cheaper and clean energy.

Consumers in Kenya often complain of high electricity charges, with some of the costs being attributed to idle capacity charges to compensate power generators for electricity generated but not used.

Power bills

Fuel Cost Charge— the levy that Kenya Power uses to pay the thermal plants – and compensation for forex fluctuations have been blamed for significantly contributing to the high power bills.

FCC nearly doubled to Sh6.79 in September from Sh3.88 a year earlier for consumers using up to 10kWh.

Kenya has been ramping up investment in geothermal, wind and solar sources in a bid to lower reliance on thermal plants.

The country retired Tsavo Power when its electricity purchase deal lapsed in September 2021.

Under a typical power purchase agreement, a power producer gets paid for any electricity produced, even if it is impossible for Kenya Power to sell it to consumers due to excess capacity and other reasons.

The government has unsuccessfully pushed for a review of the power purchase agreements to ease the burden on consumers.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.