Tap digitisation for energy reforms

The saying problems can be the source of opportunities seems to be relevant to the energy sector in Kenya. The government’s intervention, for example, in the affairs of the debt-ridden Kenya Power presents an opportunity to reform the sector.

The energy sector could replicate the transformation in the telecommunications sector if the decision-makers can see digitalisation as the driver of the efficiencies they desire to achieve. Practically everywhere in the world, digitalisation is at the centre of the efficiency, accessibility, safety, and sustainability improvements in energy systems.

Emerging technologies such as Internet of Things (IoT) are providing new solutions such as home automation (to monitor home appliances and reduce energy consumption).

Artificial intelligence (AI) has the potential to cut energy waste, lower energy costs, and facilitate and accelerate the use of clean renewable energy sources in power grids and smart electricity grids (enabling data analytics for predictive maintenance to avoid blackouts).

Although Kenya Power dominates the electric energy sector, where they consider small-scale power producers (industrial and household solar solutions) as competitors. But they forget that these producers represent a great resource to the energy companies especially now as the world moves towards renewable energy.

They should be interlinked with Kenya Power through a regulatory arrangement and be protected from the utility firm’s monopoly status because demand response will be crucial in providing the flexibility required to integrate more variable renewable energy generation.

Digitalisation can make it possible for consumers to have more options like demand response where they can help Kenya Power to run more smoothly by lowering or adjusting their electricity usage during peak periods in response to time-based pricing or other financial incentives.

Already, some designers in the energy industry and operators use demand response systems as a resource for balancing supply and demand. These types of programmes can reduce the cost of electricity in wholesale markets, resulting in reduced retail rates.

It would also allow power providers to use direct load control programmes, which allow them to turn air conditioners and water heaters on and off during peak demand periods in exchange for cash incentives and lower electricity costs.

With the issue of renewable energy dominating the debate on the future of energy, the sector should start thinking about how it will leverage data analytics to plan for the implementation of smart charging for things like electric vehicles (EVs). Although at the moment we have few EVs, there is every indication that soon these environment-friendly vehicles will flood the market.

Charging might result in a large increase in electricity demand. Renewables, such as solar and wind power put into the grid, can meet this requirement in a realistic and cost-effective manner.

Such advancements present a ground-breaking opportunity especially in our ever-crowded cities to mark the start of decarbonising transportation while reducing oil imports as well as eliminating air and noise pollution.

The intervention by the government to resuscitate Kenya Power comes at the right time. The Dream Team that has been tasked to reform the ailing monopoly should start with sealing off the financial loopholes using a distributed ledger system to restore trust customers’ trust.

Procurement processes should be halted until a thorough inventory as well as employee headcount is conducted. It could also consider learning from countries that have digitised their energy systems and build capacity to intensify digitalisation.

The Dream Team in my view should dismantle the monopoly status of the company to create a competitive energy market.