Local firms up power generation efforts to cut costs

By George Obulutsa

An increasing number of local firms in Kenya plan to start generating their own electricity to help lower power costs, improve reliability of supply and add new sources of revenue.

Kaluworks, Kenya Petroleum Refineries and Unilever Kenya Tea — are the three latest firms to apply for licences with the Energy Regulatory Commission. They plan to put up plants to generate at least 109 MW.

Cement manufacturers Athi River Mining and East African Portland Cement have announced plans for a coal plant that include the recycling of waste heat from its clinker furnaces.

"Cost of power has become a major concern for every industry, and we don’t see the cost of power coming down. So most people who can afford to produce their own electricity are actually going for it," said Vimal Shah, chairman of the Kenya Association of Manufacturers. "We would encourage it," he added.

Power outages

Kenya often suffers power cuts, a situation that was exacerbated last year when drought slashed hydroelectricity generation, the main source of power.

The biggest supplier to east Africa’s biggest economy is Kenya Electricity Generating Company (KenGen) which makes about 1,000 MW of electricity — 80 per cent of Kenyan demand — with 700 MW of the total from dams. The rest is from geothermal and diesel-powered plants.

The Government says local industries pay $0.19 per kWh while Egyptian factories, for instance, pay only $0.05.

The World Bank said last month the gap between the supply and demand of electricity had risen in recent years due to strong economic growth. —Reuters