Market News

Large commercial electricity usage falls to 20 percent

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Summary

  • The growth of power consumption from the national grid by large commercial users has slowed down since April.
  • A report by the CBK shows that year-on-year power consumption growth by large commercial users such as shopping malls and factories stood at 20.2 percent in August.

The growth of power consumption from the national grid by large commercial users has slowed down since April, indicating a rising shift to cheaper own sources by firms seeking to cut production costs.

A report by the Central Bank of Kenya (CBK) shows that year-on-year power consumption growth by large commercial users such as shopping malls and factories stood at 20.2 percent in August, down from a high of 38.7 percent in April—marking the fourth consecutive slump in growth since May.

Contrastingly, the data shows that the year-on-year consumption growth among small commercial users stood at 17.1 percent in August having risen from 10.8 percent in July.

Large consuming industrialists have been shifting to solar power systems to cut on power bills amid thinning revenues.

Big power consumers such as Africa Logistics Properties (ALP), Mombasa International Airport, the International Centre of Insect Physiology and Ecology (Icipe) have recently commissioned solar power units on their properties.

Commercial and industrial consumers account for the largest share of electricity sales at 52.8 percent, followed by domestic at 30.8 percent, according to Kenya Power’s financial report for the year ended June 2020.

Small businesses and street lighting account for 15. 5 percent and 0.93 percent respectively.

The shrink in power consumption by large commercial users was compensated by a jump in uptake from small and micro enterprises (SMEs), propping up electricity uptake this year compared to 2020 and 2019.

The declining uptake of electricity by the large consumers has already impacted Kenya Power's revenues.

The utility firm’s data show revenue for the year ended June increased by 3.3 percent compared to the similar period ended 2019, attributable to improved average yield due to increased consumption by domestic customers by six percent and consumption by SMEs customer segment by 0.9 percent.

“The revenue growth was eroded by a reduction in the commercial and industrial customers’ consumption by 3.5 percent,” it added.