Thermal power producers pocketed about Sh25.5 billion in in the first six months of the year, more than twice the Sh11.9 billion they earned in a similar period last year.
Official data shows that thermal electricity generation more than doubled to 1.3 billion kilowatt hours (kWh) in the review period, from 608.2 million units.
Some of the thermal power companies, known as independent power producers, include Gulf Power, Iberafrica, Triumph and Thika Power.
Investors in diesel-fired power plants have more than doubled their earnings in the year to June on increased sale of their expensive electricity to homes and businesses through Kenya Power #ticker:KPLC.
Thermal power producers pocketed about Sh25.5 billion in in the first six months of the year, more than twice the Sh11.9 billion they earned in a similar period last year.
The Kenya National Bureau (KNBS) of Statistics data shows that thermal electricity generation more than doubled to 1.3 billion kilowatt hours (kWh) in the review period, from 608.2 million units.
Kenya Power buys electricity from the thermal producers at an average wholesale price of about Sh19.6 ($0.19) per unit for onward sale to customers.
Because diesel-generated power is expensive, it is only produced when there is a shortage of cheaper hydropower (Sh3) and available geothermal energy (Sh8) has been fully injected into the grid.
Some of the thermal power companies, known as independent power producers, include Gulf Power, Iberafrica, Triumph and Thika Power.
The KNBS data shows that June recorded the heaviest uptake of thermal power at 274.2 million units, a three year high.
This saw its share of energy mix consumed in Kenya shoot past that of hydropower for the first time in three years to stand at 32 per cent. The increased use of diesel generators has been attributed to a steep drop in cheaper hydropower production due to a prolonged drought.
At 32 per cent, thermal power’s share of the total production mix has touched levels last seen in July 2014 before the addition of 280 megawatts of geothermal energy to the national grid.
The increase in thermal has in the past translated to higher monthly bills since consumers pay fuel levy that is linked to the amount of diesel-generated power on the grid.
In July 2014, for instance, thermal intake stood at 32.9 per cent, about the same level as June’s, causing consumers to pay Sh7.22 per kWh in fuel charge-related billings.
The levy, thereafter, dropped by up to 65 per cent (to between Sh2 and Sh3 per unit) with the coming on board of the additional geothermal power in the second half of 2014 that cut thermal’s share to below 20 per cent.
But the Energy Regulatory commission (ERC), has retained the fuel charge at Sh2.85 per unit since February despite the jump in thermal power intake.
It’s for this reason that power sector observers say that the retention of the levy is only possible with government subsidy and with the aim of keeping power bills down during the just concluded General Election.
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