Kenyans may from early next year be able to enjoy cheaper power from independent solar producers once an auctioning policy that would cut the cost at which Kenya Power #ticker:KPLC buys electricity from PV firms by half.
Dr Ken Tarus, the utility firm’s managing director and CEO, said on Tuesday that he expected the cost at which it buys power from solar firms in the country will fall to about $0.06 (about Sh6) per kilowatt-hour from the current high of $0.12 (about Sh12) per kilowatt-hour.
Kenya’s energy sector players have since 2015 working on a policy that will allow the government to buy power from independent producers through an auction system replacing the current Feed-In-Tariff (FIT) policy, which leaves the pricing at the producers’ discretion.
“At the moment we are still under the feed-in tariffs and under this policy we have the unsolicited bids. Therefore any investor will come in with what they perceive as their right price,” Tarus told a journalist on the sidelines of a Tuesday investors briefing.
“The latest we’ve seen is about $0.0875 and $0.085 and we are optimistic that once we get to the soliciting of bids that should come down due to competition. Indications are that this (the auction) could come in either at the end of this year or early next year,” he added.
The country is currently generating less than one per cent of its power from solar energy, but has a number of installation under construction that could increase its sun-powered renewable energy capacity in coming years.
Two years ago, Kenya Power signed a 20-year power purchase agreement with four solar firms – Eldosol, Radiant, Alten and Malindi Solar – to generate about 160 Megawatts under FIT.
The deals generated an uproar from the Consumer Federation of Kenya (Cofek), which questioned the rational of buying power at $0.12 (about Sh12) per kilowatt when globally the price had dropped to less than $0.08 (about Sh8).
In comparison, other renewable energy sources such as geothermal, hydro and wind, cost under $0.10 (about Sh10) per kilowatt-hour.