Market News

KenGen eyes industrialists for direct electricity sales


A KenGen power plant at Olkaria V Geothermal in 2018. PHOTO | SALATON NJAU

State-owned Kenya Electricity Generating Company (KenGen) #ticker:KEGN is targeting flower firms and large industries in the proposed Naivasha Industrial Park as first customers for direct electricity sales, officials have said.

Listed electricity distributor Kenya Power #ticker:KPLC currently has a monopoly on power sales but the Energy Act 2019 provides for the opening up of the sector.

Until now, KenGen has been restricted to electricity generation, alongside Independent Power Producers (IPPs).

“The flower firms and large industrial investors would be our first customers if the proposal is approved by the Energy and Petroleum Regulatory Authority (EPRA),” said Cyrus Karingithi, the KenGen assistant manager, resource development and infrastructure.

Selling electricity directly would come as a big boost for KenGen’s revenues on circumventing Kenya Power.

Last month, the State offered investors a low power tariff of Sh5 per kilowatt-hour (kWh) to set up factories in Special Economic Zones (SEZ) in Olkaria, Naivasha, as the government takes steps to grow the manufacturing base and create more jobs.

The Energy and Petroleum Regulatory Authority (Epra) approved the sweetheart tariff deal for big factories that will set up base in the special zone.

9,000 ACRES

More than 100 local and foreign investors have expressed interest in the industrial park where 9,000 acres have been set aside for factory development.

Market data shows the Sh5/kWh tariff is about half what is charged large-scale commercial consumers who pay between Sh10.10-12/kWh at peak hours.

Mr Karingithi said KenGen has recently diversified revenue streams on sale of geothermal steam to flower firms.

The Oserian Development Company has been using geothermal energy from KenGen to heat rose greenhouses — that have expanded to 50 hectares — since 2003.