Kenya Pipeline bets on solar plants to cut costly power bills

BUSINESS |

Trucks on a queue at the loading area of the Kenya Pipeline Company, Eldoret Depot, 2018. [Kevin Tunoi, Standard]

The Kenya Pipeline Company (KPC) has mooted plans to install solar power plants at its facilities. This is as it looks to cut down on electricity bills while increasing reliance on renewable energy.

The company has started the search for contractors to install solar power plants at its headquarters along Nanyuki Road, in Nairobi’s Industrial Area and another one at one of its main pumping stations (PS21) on the Mombasa-Nairobi pipeline.

The firm joins numerous other large power consumers that are increasingly pursuing other alternative sources of electricity to cut on power bills running into billions of shillings and achieve internally set conservation goals.

The savings on power bills is however a dent for Kenya Power. “The mandate of transporting petroleum products is through centrifugal pumps driven by medium voltage electric motors. Electricity cost, therefore, is a main operational cost driver for the company,” said KPC in tender documents.

The State firm, which is categorised as a large power consumer under the Energy and Petroleum Regulatory Authority (Epra) guidelines, said the last investment-grade audit recommended exploration of renewable energy sources such as solar.

“For the company to meet its statutory and regulatory requirements, KPC intends to explore renewable energy to progressively complement its energy requirements by introducing solar energy into its energy mix,” noted the firm in the tender documents.

"This is in line with its core value of care for the environment as well as in alignment to the Sustainable Development Goals."

The company last year paid Kenya Power Sh1.3 billion for the electricity it consumed, making it one of the largest consumers in the country, alongside other heavy consumers as cement producers and steel mills.

The electricity bill last year was however a major reduction compared to the over Sh2.8 billion in power bills in the year to June 2018.

KPC joins other large power consumers that are pursuing other alternative sources of electricity. [Courtesy]

In its annual report for the year to June 2020, KPC attributed the reduction in power bills to volumes of petroleum products transported through the pipeline being affected by Covid-19 in the last quarter of the financial year.

It has also adopted an energy-saving “operating philosophy” that was made possible by the operationalisation of the recently constructed 20-inch Mombasa–Nairobi line five pipeline.

The shift to solar is a major loss for Kenya Power, which is grappling with financial difficulties. Last year, Kenya Power reported a loss of Sh939 million. Many companies have installed such grid-tie systems to clean up the environment and cut power bills.

There are some which have generated more power, especially during the day for solar plants, than they require and are considering selling excess electricity to Kenya Power.

Epra has recently proposed compelling large power consumers to put in place energy-saving measures. In the draft, Energy Management Regulations 2021, the energy industry regulator suggests that companies set energy-saving targets determined by an energy audit done internally but approved by Epra.

The firms will then be required to meet at least 50 per cent of these targets and benchmarks determined by Epra for their specific sectors within three years.

If they fail to meet the targets, they will be required to buy energy efficiency credits from firms that will have achieved the targets.

Among the green initiatives that large power consumers can get into include putting up their own solar and wind power plants.

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