Firms to get rewards for efficient use of electricity

Companies that efficiently manage their power consumption will earn credits under new regulations aimed at saving energy and reducing greenhouse gas emissions.

Energy (Energy Management) Regulations 2020 require industries, business premises and institutions to submit annual energy consumption reports which will be used to determine energy savings.

The Energy and Petroleum Regulatory Authority (Epra) will then issue certificates to the companies based on established standards.

“An energy savings certificate shall indicate the number of tradable credits determined from the annual energy saved from implementation of energy saving measures as per the guidelines in the Fifth Schedule,” said Epra in a Kenya Gazette notice.

The regulations do not state the specific benefits the companies will get for compliance ,be it payment by the State or tax reliefs.

Carbon trading is a scheme where firms (or countries) buy and sell carbon permits as part of efforts to reduce carbon emissions. It involves companies which have exceeded their carbon dioxide emissions limits, especially in Europe and Asia, buying carbon credits from those that emit less.

Under the regulations, energy audits will be carried out on the companies every four years and classification as high, medium, or low energy users done “from time to time”. The energy audit will be undertaken by an accredited energy auditor or energy service company.

Defaulters of the requirement face jail terms or fines of up to Sh1 million, according to the legal notice. Upon completion of energy audits, the companies will be issued with either a white or green certificate.

The white certificate will indicate that the facility's energy performance indictor is better than the published best indicator for the sector by twenty five percent. The green certificate will show when the facility's energy performance indictor meets the published allowable benchmark for the sector.