Electricity use jumped to the highest level in four years in the six months to June, signalling increased economic activity that looks set to aid the recovery of Kenya Power.
Latest data from the Kenya National Bureau of Statistics (KNBS) shows a seven percent rise in power use from 9.1 billion kilowatt hours (kWh) to 9.79 billion) in the period ended June as the economy made a steady recovery in the first half of the year.
The electricity sales signal better times for the economy which fully reopened in July last year after lifting of the restrictions imposed to curb the spread of coronavirus. Power consumption indicates the number of equipment plugged onto the national grid — including industrial machinery — pointing to economic output.
It may also be a result of increased use of home appliances such as TV sets and refrigerators that point to improvement in household incomes and rising standards of living.
Economic activities have been rising steadily since last year with an outlook from 14 global banks and consultancies projecting economic activities to expand by 5.3 percent this year, pushing up the demand for electricity.
The increase in consumption will also help Kenya Power bear the 15 percent cut on power tariffs that was effected in January and delays in approving higher power costs.
The International Monetary Fund said the tariff reduction aggravated KPLC’s liquidity challenges by lowering revenues by an estimated Sh26.3 billion per annum.
The Energy and Petroleum Regulatory Authority (Epra) also delayed approving new tariff guidelines until this month when the regulator increased fuel cost charge (FCC) to a historic high of Sh6.7 from Sh4.6 last month, setting the stage for costly power since December last year.
The regulator has also raised forex charge from Sh0.7 to Sh1.3, a high last seen in January 2021, reflecting the impact of the shilling decline on power bills and adjusted the pricing to higher inflation of Sh0.67.
The move that has piled pressure on homes and businesses looks set to further shore up Kenya Power’s profits at the back of the increased demand for electricity.
Kenya Power's net profit for the six months to December jumped more than 27 times to Sh3.81 billion from Sh138 million in a similar period a year earlier on the back of higher sales and lower operating costs. Sales jumped 21 percent to Sh83.5 billion.
The impact of electricity consumption will be reflected in the utility’s full-year report.