Landlords, developers of malls and industrial or commercial hubs could soon have an extra revenue stream, selling electricity to their tenants.
This is as Kenya Power considers selling electricity in bulk to owners of huge real estate projects for resale to their tenants.
The move could seal revenue leaks for the company as it would see landlords take up the role of ensuring that all electricity bought from Kenya Power is accounted for. Failure to do so would mean they incur losses.
The proposals are contained in the application for tariff review that Kenya Power recently made to the Energy and Petroleum Regulatory Authority (Epra), which is currently undergoing public participation.
In the proposal, the utility firm introduces a bulk tariff for all its commercial and industrial customers, which is different from what the firms currently pay for the electricity consumed.
Industrial consumers are usually placed in different categories, depending on their consumption, with the bigger the consumer, the cheaper the charges.
It will be the same case for the bulk tariff, with the commercial consumers classified as “small commercial” buying power at Sh19.60 per unit under the new bulk tariff for resale to their customers.
Large industrial customers – Commercial and Industrial 5 (CI5) – metered at 220kV buying power under the bulk tariff at Sh15.80, which means they would get bigger margins reselling electricity to tenants.
“We are having new development of cities or people doing big malls, and they want to metre those customers. We have proposed a slightly lower tariff for them so that they can be able to manage their customers,” said Kenya Power acting Chief Executive Geoffrey Muli.
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“KPLC (Kenya Power and Lighting Company) will give them one meter, and then they can sub-meter the customers and manage the power there, which they will be getting at a lower tariff. It is starting from Sh19.60 per kilowatt hour (kWh), which is more than Sh2 lower than for normal ordinary domestic customers.”
Kenya Power has been running the tariff on a trial basis, during which several real estate developments such as shopping malls and residential housing projects were offered bulk power for resale to tenants. The bulk tariff is in addition to the e-mobility tariff targeting the electric vehicle industry, which is still at its formative stages in the country.
“We also have a proposed tariff on those involved in e-mobility. This is for those who want to use electricity to purely charge vehicles,” said Mr Muli.
Kenya Power has in the past said it would consider giving electric vehicle firms a tariff that enabled would enable them to charge vehicles late at night when the demand for power is significantly lower.
These hours also tend to be peak production hours for such energy sources as wind. Electricity consumption on a typical day peaks between 6pm and 10pm to over 2,100 megawatts (MW). But after that, it reduces significantly.
The maximum demand, Kenya Power said, occurs at peak time (early evening) and a minimum demand of an average of 1,000MW during late night and weekend.
A tariff during these hours ensures that firms with electric vehicle infrastructure have a huge amount of power available as demand across other consumer categories is low.
Several companies recently started dealing in electric vehicles and motorcycles locally. Among them is BasiGo, which works with public service vehicle operators, enabling them to acquire e-vehicles while offering them such services as vehicle charging and maintenance.
The services were initially offered at a central depot on North Airport Road, but the firm said it is putting up more charging stations as the number of electric buses plying different city routes increases.
“The plan is to put charging infrastructure across the city over the next two years. Our BasiGo clients running electric buses will be our anchor clients but these charging stations will be available to you and I when electric vehicles come,” BasiGo Chief Revenue Officer Moses Nderitu told Financial Standard in a recent interview, adding that the charging stations would resemble the current petrol station model.
“We are negotiating with property owners – petrol station and mall owners – who have secure parking facilities, for instance on Thika Road, so that the buses plying Thika Road can be charged on Thika Road and closer to where they terminate as opposed to a central depot. This way, they can maximise the number of kilometres, especially during rush hour.”
Kenya Power and KenGen recently said they are building charging infrastructure and also starting to replace their fleet of diesel and petrol vehicles with electric vehicles. KenGen said it plans to set up more than 30 electric vehicle charging stations across major towns as it seeks to tap into the e-mobility market.
The power producer also said it would transition its fleet of vehicles from fossil fuel-fired ones to electric vehicles.
The State-owned power producer recently unveiled four such vehicles as part of the shift to the new technology.
It has two EV charging stations in Nairobi and Naivasha and plans to install an additional three by end of this year in Murang’a, Embu, and Kisumu counties within the company’s power plants.
The charging stations are not open to the public as they are currently for internal piloting and data collection before the commencement of commercial rollout.
Kenya Power also recently announced similar plans, which will see it ditch its current fleet of vehicles for electric vehicles and also set up electric vehicle charging stations.
The firm said it would set aside Sh40 million to purchase electric-powered vehicles as it moves to phase out fossil-powered ones from its fleet.
The funds will also be used to construct electric vehicle-charging stations within Nairobi, both for the company’s use and demonstration purposes.
Kenya Power has also advertised for expression of interest from e-mobility (electric vehicle) technology partners to design a charging infrastructure, billing and payment system and service management.