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POWER PARADOX

Consumers burdened despite Kenya producing more cheaper energy

Generation of expensive thermal power has reduced by over ten folds since February last year.

In Summary

• The country generated 146.21 million kilowatts of wind power by February up from 3.26 million kilowatts same period in 2018.

A prepaid Kenya Power customer keys in token numbers in Loresho, Nairobi county, April 25,2018. /ENOS TECHE
A prepaid Kenya Power customer keys in token numbers in Loresho, Nairobi county, April 25,2018. /ENOS TECHE

Electricity consumers in Kenya continue to shoulder high power bills despite an increase in  the generation of cheaper wind power by almost 22 times in one year.

Latest power generation report by the Kenya National Bureau of Statistics (KNBS) shows the country generated 146.21 million kilowatts of wind power by February up from 3.26 million kilowatts same period in 2018.

The country which was not generating a single kilowatt of solar power in February 2018 had produced 7.02 million kilowatts of solar same period this year, thanks to 54.6 megawatt (MW) solar plant in Garissa.

According to the KNBS data, generation of expensive thermal power has reduced by over ten folds since February last year to 98.56 million kilowatts from an annual high of 249.13 million kilowatts.

Solar power is cheapest source of energy, with a wholesale price of Sh8 per kilowatt followed by wind power which goes for up to Sh16 per kilowatt hour. Thermal is most expensive at upwards of Sh20 per kilowatt hour.

During the report period, geothermal production which accounts for 42.5 per cent of Kenya’s total generation eased marginally to 374.43 million kilowatts compared to 387.02 million kilowatts in February last year.

Hydro generation however rose to 253.91 million kilowatts compared to low of 193.43 million similar period last year.

The country’s total generation capacity eased from year a high of 965.90 million kilowatts in January to 880.14 million in February, an improvement of 43 million kilowatts same period last year.

Despite the growth in production of cheaper power, electricity consumers are paying higher bills as Kenya Power chock under restrictive power purchase agreements with independent producers.

Kenya Power is forced to source more electricity from Independent Power Producers (IPP'S) that mainly rely on diesel powered thermal turbines.

 

The electricity retailer normally buys electricity from the IPPs at an average wholesale price of Sh19.24 ($0.19) per unit, with cost passed to consumers.

The diesel rate is six times more expensive than hydro-power (Sh3 per unit) and three times higher than geothermal energy (Sh8).

Mid this month, the Energy and Petroleum Regulatory Authority (EPRA) increased fuel levy — which is influenced by the share of electricity from diesel generators —to Sh3.75 per kilowatt hour (kWh), up from Sh2.75 set in March.

This has pushed up the cost of power, with a prepaid consumer currently getting only 11.9 units for Sh200

Tax took Sh26.67, Warma Sh0.14, EPRA Sh0.35, forex 0.23, inflation Sh2.97 and fuel index Sh44.62.

Kenya has an installed generating capacity of 2,370MW and peak demand of about 1,770MW. It relies heavily on renewables such as geothermal and hydro power.