The value of diesel-generated electricity that Kenya Power sold to consumers between July and December last year dropped by Sh6 billion, even as users’ power bills remained unchanged.
Half-year results released by Kenya Power last week showed that only 10 percent of the electricity that was sold to customers came from expensive diesel plants.
This helped the majority State-owned power firm to cut fuel costs by 44 percent to Sh6.88 billion from the comparative July to December 2017 cost of Sh12.29 billion.
Fuel costs are usually pass-through costs that are directly loaded onto consumers’ bills.
During the period, 44 percent of the power sold came from geothermal sources while 39 percent was from hydro. Wind contributed 15 percent while imports accounted for five percent.
“The drop in fuel costs means less reliance on thermal sources, which should lead to a drop in fuel cost charge element,” Kenya Power said in response to the Business Daily queries, adding that green energy has reduced reliance on thermal plants.
The Energy Regulatory Commission (ERC) has, however, remained mum on cost of electricity queries posed by the Business Daily since the Lake Turkana Wind Power (LTWP) and Garissa solar power plants were hooked onto the national grid, relegating expensive thermal to fourth position among sources that supply the country.
The fuel cost charge (FCC) on consumers’ monthly bills averaged Sh3.35 per kilowatt hour (kWh) in six months to December 2017 and only dropped to an average of Sh2.85 per kWh in six months to December 2018.
The fuel levy remained unchanged at Sh2.50 per kilowatt hour (kWh) since August last year.
Kenya Power data shows significant cuts came from Rabai Power where it sourced 26 gigawatt hours (GWh), down from 307GWh during the six months.
This helped to cut purchase costs to Sh301.3 million from Sh2.76 billion.
From Thika Power Plant, the power distributor sourced 27GWh, down from 125GWh in half year 2017.
It spent Sh320.7 million, down from Sh1.67 billion in the previous year.
Other big cuts came from Iberafrica Power where Kenya Power paid Sh403 million, down from Sh1.56 billion in a similar period last year.
In the national grid, geothermal is the biggest source, accounting for 44.6 percent of electricity generation mix while hydro is second at 29.8 percent.
Thermal, which was at 24.5 percent in December 2017, now stands at just 9.6 percent, according to the ERC data.
Focus has been shifting to green energy sources. LTWP, which started supplying power to the grid in September, delivered 325GWh to earn Sh3.24 billion in under four months.