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Economy

Wind, solar power firms face freeze on new deals

wind turbines on Ngong Hills
Power-generating wind turbines on Ngong Hills. FILE PHOTO | NMG 

Wind and solar power producers face uncertain times in Kenya after the State announced a freeze on the signing of new power purchase agreements (PPAs).

The Ministry of Energy in a new twist now says Kenya will ration its deals with power generators from the two intermittent sources even as the country continues to procure from hydro and geothermal sources.

Energy secretary Charles Keter said there is a need to balance the level of the intermittent sources of power — wind and solar — in the national grid to guarantee stability.

“The freeze on new power purchase agreement will mainly affect wind and power producers since they are not very stable sources and we cannot afford to have a huge portion of our generation mix from them.

“This is mainly because we give priority for the two sources into the grid before accommodating power from the other sources,” Mr Keter said.

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The priority given to wind and solar sources is meant to ease the cost of power given their low cost.

Mr Keter said wind and solar power composition of the electricity generation mix had reached the desired level beyond which the stability of the grid would be compromised.

Last year, Kenya Power #ticker:KPLC, which is the only authorised buyer of electricity announced a freeze on new power purchase deals, sending shockwaves in the industry where several billions of shillings have already been invested in power generation.

The decision threw mega electricity generation projects valued at billions of shillings in limbo with some 23 PPA applications said to have been on the pipeline. The energy regulator was also drawn into the controversial decision, insisting that new PPAs should still be signed.

Kenya’s total installed capacity increased slightly to above 2,500 megawatts after the completion of the 310-megawatt Lake Turkana Wind Power project and the 53-megawatt Garissa solar power plant late last year.

The peak demand still stands at 1,802 megawatts, with the balance being the reserve power meant for emergency situations such as plant repair shutdowns.

President Uhuru Kenyatta’s administration in 2013 set an ambitious plan to install an additional 5,000 megawatts to the national grid by 2017 from renewable sources such as geothermal, solar and wind farms with a target to connect all homes to power by 2020.

Mr Keter’s claim for grid balancing is based on the generation mix formula, which targets to have the intermittent sources not more than a third of what is supplied at any given time.

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