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Economy

Deals tie users to 15 more years of expensive power

Charles Keter
Energy CS Charles Keter. FILE PHOTO | NMG 

Official contracts have tied consumers to high electricity bills linked to thermal generation for up to another 15 years, records show.

A listing of the active diesel-run power generators shows that the longest power purchase agreement runs till 2035, leaving consumers with a longer wait before the expensive energy sources end. The Energy ministry last year began shedding the diesel-run power generation units by letting their contracts expire to reduce the burden on consumers.

Data from the Energy and Petroleum Regulatory Authority (Epra) show that there are eight thermal power plants with a combined installed capacity of 660.82 megawatts supplying the national grid.

Energy Cabinet Secretary Charles Keter said the option of waiting for the expiry of the production agreements would be the easiest as terminating them early would be costly.

“We are slowly retiring them by not renewing licences when contracts expire. This is based on our grid analysis, which show that technically, they can be decommissioned without negative impacts to the quality and security of supply of electricity,” Mr Keter said. The Epra list show that the Triumph Power Generating Company was the latest company to be signed for thermal power supply in July 2015.

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The firm’s 83MW plant has a 20-year contract expiring in February 2035. Others like Coast–based Gulf Energy with 80MW and Thika Power with 90MW will expire in 2034.

Switching off thermal plants is part of the government's gradual phase-out plan of expensive diesel power generators as it moves to provide cheaper and cleaner energy.

Last year, Iberafrica’s 54MW thermal plant was dropped off the grid after 15 years with the expiry of its power purchase agreement. The use of thermal power has been blamed for keeping Kenya’s electricity relatively expensive compared to countries like Egypt which largely uses hydro sources retailing at Sh3.23 per kilowatt hour (unit) on average compared to thermal’s Sh18 per unit.

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