Electricity tariffs to drop by 40pc as State commissions new plants

The Government intends to scale up electricity production by 5,000MW within two years to reduce costs and boost the country's attractiveness to investors. [PHOTO:FILE/STANDARD]

Nairobi; Kenya: Electricity bills for households and factories could fall down by as much as 40 per cent over the next three months. This is as the Government switches off the more expensive thermal generators in favour of cheaper renewable sources.

In an elaborate plan, the Government intends to scale up its electricity production by 5,000MW by 2016 to reduce its cost and thereby boost the country’s attractiveness to investors.

President Uhuru Kenyatta therefore will today take this ambitious plan forward by commissioning an extra 280MW Geothermal power at Olkaria, Naivasha.

Expensive places

At present, Kenya is ranked among the most expensive places to do business, in part because of the high cost of power, and the intermittent power supply that made it mandatory for companies to invest extra resources to ensure smooth running of operations.

This has hurt Kenya’s ease of doing business index, with the country ranked lowly compared to its peers. As such, the government is pulling all the stops to bring down the cost of power, so as to save jobs and encourage more companies to set base in the country.

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“Currently, only three out of 10 households are connected to the national grid, with the government hoping to raise this number to 8 households by the end of next year. So far the government has connected 11, 000 primary schools to the grid, with the remaining 15, 000 schools to be connected by the end of 2015,” said Davis Chirchir, cabinet secretary for energy and petroleum.

He disclosed further that the Government is working on plans to exploit the 600 billion cubic feet of gas discovered at the coast, which will add an estimated 500MW of power to the national rid. It also wants nuclear energy included in the country’s power mix.

“The Government is set to inject an additional 280 MW of power from the Olkaria geothermal plant into the national grid today,” said Chirchir.

The Olkaria 4 is considered the biggest Geothermal power plant in the world and is a major leap forward for Kenya’s power generation efforts, with its effects felt across all homesteads in Kenya.

Power bills

“We expect power bills to go down by 30 per cent by end of this month and 50 per cent early next year when more geothermal energy hits the national grid. Cost of producing goods will go down as a result of cheaper power, pushing down overall cost of living for Kenyans,” said Munyori Buku, senior director of public communications at State House.