Electricity consumption is growing considerably more slowly than the economy (see P14).
Over half of Kenyans are connected to the electricity grid yet consumption is not growing as fast as anticipated. The cost of electricity has risen by almost 50 percent over the last five years. Solar power is increasingly popular because it is cheaper than being on the grid. This depresses demand for Kenya Power.
Kenya has 2,700 MW of installed capacity following the comissiong of 310 MW from Lake Turkana Wind Power earlier this year. Yet peak demand is only around 1,800 Mw.
Demand will increase if cost goes down. Kenya Power and Kengen need to work together to reduce the cost of power so that this excess capacity is absorbed by the market.
Moreover, the proposed Lamu coal plant would expensively generate another 1,050 MW of power that will not be needed for many years to come. But Kenya Power will be forced to buy this power and that cost will be loaded onto the consumer and would reduce demand even further.
Kenya should postpone further investment in power generation until demand increases.
