Kenya Power plunges firms, households into darkness 25 days a yearMonday January 12 2015
Kenyan households and factories are plunged into darkness for an average of 25 days every year due to blackouts, a global energy report says.
The International Energy Agency (IEA) says the blackouts result in electricity retailer Kenya Power losing 5.5 per cent of annual power sales, which translates to Sh3.4 billion for the period to June 2014.
Kenyan homes and industries experience more than 600 hours of outages per annum compared to 120 hours or five day per year in South Africa, according to IEA’s report titled Africa Energy Outlook 2014.
The Paris-based agency blames the blackouts on Kenya Power’s dilapidated grid network, forcing investors and families to invest in diesel-powered standby generators and solar backup power systems respectively.
“The problem of inadequate electricity supply is multifaceted: it includes lack of generating capacity, rundown existing stock and limited transmission and distribution infrastructure,” said Maria van der Hoeven, IEA executive director.
“The use of back-up power generation to mitigate poor grid-based supply increases costs for businesses. Relative to grid supply, back-up power generation is expensive,” said Ms Van der Hoeven in the report. The power failures, averaging two days a month, rank Kenya eighth on the list of African countries that suffer the longest duration of electricity outages and power losses.
Kenya was plunged into a countrywide power outage on May 28, 2013 after two transmission lines between the Olkaria geothermal load centre and Ndenderu sub-station near Nairobi tripped while carrying 400MW of electricity.
Energy Regulatory Commission (ERC) director-general Joe Ng’ang’a said he was not satisfied with the quality of electricity supply by Kenya Power.
“We will soon be making public information on where, duration and number of outages that occur in Kenya so we can have comparative statistics to benchmark Kenya Power with peers,” said Mr Ng’ang’a in an interview with the Business Daily.
Investors on average wait for 158 days to get electricity connection in Kenya, according to the World Bank’s latest Doing Business report.
Kenya Power, a monopoly in electricity distribution, had 2.7 million customers as at June last year, meaning only three out of every 10 Kenyans have access to the grid.
The IEA report reckons that Kenya’s high frequency of power outages means that demand by small and mid-sized (SME) companies is unmet because they cannot afford diesel-fuelled back-up generators.
“Those without a generator are left without electricity during outages,” said IEA in the report, which results in lost business opportunities.
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IEA reckons that frequent power outages eat into Kenya Power’s revenue, starving the electricity distributor of funds to upgrade its run-down transmission and distribution circuit which covers 56,797 kilometres.
“Poor quality grid-based supply reduces utility revenues and makes it more difficult to increase tariffs thereby constraining the availability of finance for investment,” reads the report.
Lost production value
The Kenya Association of Manufacturers (KAM) has termed power outages and surges as one of the biggest challenges in doing business.
“Manufacturers in Kenya experienced an average of six power outages per month in 2013,” said Betty Maina, chief executive at KAM.
Ms Maina said the blackouts result in an average lost production value of about 5.6 per cent of total annual sales.
Power outages and surges are also known to damage home appliances and may lead to electrical equipment failures in companies, resulting in losses.
“Where outages are frequent and long-standing, consumers may have changed their equipment purchases,” says IEA. Dr Elly Nyaim Opot, chairman of the Kenya Medical Association (KMA), blamed Kenya Power for incessant outages at his rural home in Malunga, Wagai in Siaya County.
“It would be understandable if the interruptions lasted only a few hours, but sometimes we have no electricity for anything from three days to a week. And even when we have power, it disappears every 30 minutes,” Dr Opot complained.
Kenya Power’s efficiency ratio improved marginally to 81.9 per cent as at June 2014 from 81.4 a year earlier. This means that the company lost 18.1 per cent or 1,596 gigawatt hours (GWh) of the total electricity it purchased from KenGen and independent power producers (IPPs) in transmission losses through outages, theft and grid leakages.
Kenya Power CEO Ben Chumo said outages are a function of investment but blamed some blackouts on third parties such as vandalism, road construction and other infrastructure work that may require shifting of power lines.
“We need to invest in system reinforcement to enhance capacity of the power network and improve quality and reliability of power supply to customers,” Dr Chumo told a shareholders’ meeting last month.
“If we improve the efficiency ratio by even one per cent, it represents additional revenue of about Sh1 billion per year,” he said.