Companies

Kenya Power faces costly burden of idle electricity

power

Kenya Power has since April been unable to sell about 24 percent of the power or 214 million kWh it bought from generators like KenGen. FILE PHOTO | NMG

alushula

Summary

  • Latest figures from the Energy and Petroleum Regulatory Authority (Epra) shows that power producers such as KenGen increased their supply to Kenya Power to 980.33 million kilowatt-hours (kWh) in July.
  • The supply is a 7.4 percent rise from 912.89 million kWh and is the highest since January output of 986.08 million kWh, piling pressure on Kenya Power given the subdued demand.

Kenya Power #ticker:KPLC is facing increased burden of paying for idle electricity as power generators increase production to five-month high amid reduced consumption by homes and businesses in the wake of Covid-19.

Latest figures from the Energy and Petroleum Regulatory Authority (Epra) shows that power producers such as KenGen #ticker:KNGN increased their supply to Kenya Power to 980.33 million kilowatt-hours (kWh) in July.

The supply is a 7.4 percent rise from 912.89 million kWh and is the highest since January output of 986.08 million kWh, piling pressure on Kenya Power given the subdued demand.

Kenya Power has since April been unable to sell about 24 percent of the power or 214 million kWh it bought from generators like KenGen.

The take-or-pay clause contained in contracts signed between government and power producers compels Kenya Power to buy the agreed amount of electricity regardless of whether or not the utility needs the energy.

The Ministry of Energy in June said it was pushing to declare force majeure on power generation contracts, which technically means that Kenya will not be bound by the existing pacts on payment of electricity from the more than 10 power producers.

Kenya Power lost Sh5.6 billion in electricity sales, equivalent to about 5.5 percent of its full year sales, in the four months to June due to reduced electricity consumption that followed Covid-19 control measures.