Electricity producer KenGen’s #ticker:KEGN share of power sales dropped in the year to June, hurt by drought that stifled hydropower generation and limited transmission lines that hampered transportation of full geothermal power.
The share of KenGen’s electricity sales sunk to 37 per cent from 42 per cent a year earlier, according to the company’s financial statements for the year ending June 30.
This means independent power producers (IPPs), largely thermal power producers, raised their share in the period to 63 per cent from 58 per cent.
The IPPs and listed State-owned KenGen sell power to electricity distributor Kenya Power for onward sale to homes and businesses.
“The company’s electricity revenue decreased by one per cent from Sh29.5 billion in 2016 to Sh29.3 billion in 2017 due to severe drought, which affected hydro generation and power evacuation constraints which reduced the dispatch of geothermal power,” KenGen said in its financial statements.
The dip in hydro power production resulted in a spike in thermal power, which is three times more expensive, to compensate for the drop, pushing up consumer power bills.
KenGen’s Sh29.3 billion power sales accounted for 37 per cent of total Kenya Power’s electricity purchases of Sh78.9 billion in the review period, down from 42 per cent when the power producer sold Sh29.5 billion units out of the total Sh70.2 billion units purchased.
Majority the IPPs operate expensive diesel-run generators to produce electricity, with US-based Orpower being the only private investor currently operating geothermal power plants in Kenya.
KenGen has a mix of plants including geothermal, hydropower, thermal and wind.
But despite the market share drop, the company powered to a 34 per cent net profit of Sh9.05 billion in the year ending June, from Sh6.7 billion a year earlier.
KenGen has a total power capacity of 1,631 megawatts, out of which 818 megawatts is hydropower, 534 megawatts is geothermal, 25 megawatts is wind energy while 254 megawatts is thermal sources.