The country knocked off 100 million kilowatt-hours (kWh) of expensive thermal energy from the national grid in the first eight months of the year.
The latest data from the Kenya National Bureau of Statistics (KNBS) shows the electricity generated from thermal sources had dropped by 10 per cent to 855.5 million kWh by August this year. Over a similar period last year, thermal sources generated 951.9 million kWh.
The drop has seen the share of thermal sources in the overall energy generation basket drop from 16 per cent to 13 per cent. However, this is still a significant ratio that has a direct impact on the pockets of consumers.
Thermal energy is the most expensive source of energy as it is generated through diesel-powered generators. Diesel-fired electricity is three times more expensive than geothermal (which costs Sh7 per unit) and seven times costlier than hydropower (at Sh3).
This 10 per cent drop should translate into at least Sh230 million in savings for energy consumers, given that Kenya Power currently levies a Sh2.3 fuel cost charge for every unit consumed. The savings should be even higher given that the cost of fuel has gone down significantly.
The dip in thermal power generation is a boost to the Government, which has been actively pushing the country away from expensive energy to cleaner and cheaper sources.
President Uhuru Kenyatta recently ordered the Energy ministry to review and terminate Government contracts with Independent Power Producers (IPPs) that are not cost-effective to Kenyans.
Cheaper energy translates into lower costs of living, helping bring down the inflation rate.
According to KNBS data, geothermal remained the top source of energy, accounting for 47 per cent of total production in the period under review. The second source is hydro, which accounted for 40 per cent.
Total power production between January and August grew 6 per cent, from 6,141 kWh in 2015 to 6,540kWh. The increase was largely from hydro and geothermal sources.
Total electricity generation expanded to 853.55 million kWh in August this year from 846.90 in July.
Further, domestic consumption of electricity rose from 703.71 million kWh in July to 728.72 million kWh in August.
However, geothermal generation dropped from 392 million kWh in August 2015 to 345 million kWh in August this year, while thermal power generation increased by 23 per cent to 137.7 million kWh over a similar period.
The Kenya Electricity Generating Company (KenGen), which is the leading energy generator with a more than 70 per cent market share, had not responded to an enquiry on the reason for this change by the time of going to press.
This comes at a time when the country is investing billions of shillings in geothermal, which now accounts for more than 50 per cent of the electricity consumed by Kenyans.
KenGen has lined up a number of energy-generating projects for development. These include a 25 megawatts (MW) early generation geothermal wellhead project, which is expected to be complete by end of the year, bringing the total capacity on wellhead generation to 75MW.
Others are Olkaria I Unit 6 (70MW) and an upgrade of Olkaria I Units 1, 2 and 3 to 50.7MW by 2017. The 140MW Olkaria V and Meru Wind phase 1 (80MW) are expected to come on stream in 2018.
The company also plans to commission an additional installed capacity of more than 720MW, mainly from affordable, clean and environmentally friendly sources.
Early in the year, the power generator signed a partnership with US President Barack Obama’s Africa Power Africa initiative, which is expected to bring Kenya 2,500MW of additional power over the next 10 years.