Market News

Seven more KTDA plants ditch Kenya Power electricity

kplc

A Kenya power technician at work in Nairobi. FILE PHOTO | NMG

geraldandae

Summary

  • The Mount Kenya plants were linked up to small hydropower stations (SHPs) and KTDA is set to sell the extra energy to Kenya Power Company.
  • Tea factories on average use 0.5 megawatts (MW) to run operations. 68 KTDA factories spend Sh2.5 billion annually on electricity bills.
  • On average, individual factories spend between Sh30 million to Sh65 million annually on electricity, depending on size, crop level and variable costs such as fuel cost adjustment and forex levy that Kenya Power uses to calculate electricity bills.

Kenya Tea Development Agency (KTDA) has connected seven more factories to its hydropower stations, a move that will see them save millions of shillings in monthly electricity bills.

The Mount Kenya plants were linked up to small hydropower stations (SHPs) and KTDA is set to sell the extra energy to Kenya Power Company #ticker:KPLC.

Tea factories on average use 0.5 megawatts (MW) to run operations. 68 KTDA factories spend Sh2.5 billion annually on electricity bills.

On average, individual factories spend between Sh30 million to Sh65 million annually on electricity, depending on size, crop level and variable costs such as fuel cost adjustment and forex levy that Kenya Power uses to calculate electricity bills.

Imenti station, connected to Imenti Tea Factory and Chania SHP supplying Mataara and Ngere plants, are producing one MW apiece. Gura SHP with 5.8MW supplies Gathuthi, Gitugi, Iriaini and Chinga tea factories.

“The cost of power has been going up over the years. With the SHPs, the goal is to have cheaper electricity in the medium term. This means lower operating costs for the factories and a better return for smallholder farmers who own these factories,” said Japheth Sayi, KTDA Power Company general manager.

READ: Coffee price continues on upward trend at NCE

Another 12 factories are set to be connected by end of the year as more SHPs are completed and become operational.

Stations expected to be operational include Iraru (1.5MW), South Mara (2.2MW), Lower Nyamindi (1.8MW), North Mathioya (5.6MW) and Nyambunde (2MW).

KTDA-managed factories that are in the same geographical areas have formed clusters (Regional Power Companies) to develop the hydropower stations, which then supply factories with electricity and the surplus sold to Kenya Power.