Kenya Power, regulator jostle for control of new electricity plants
SEE ALSO :Kenya Power to shut down prepaid systemAccording to the plan, if all the planned power plants come on board, the country’s electricity generating capacity will increase to 7,200 megawatts (MW) in 2030 and over 9,900MW by 2037. By then, demand will range from 700MW to 9,00MW, depending on the growth of industries. It is because of this uncertainty over demand projections in the coming years that Kenya Power is afraid of signing more PPAs. It fears such deals could put it in a fix where it will have to pay for capacity that might not be needed locally, a situation that is all too familiar for Kenyans and one that had cost them dearly. The power utility firm noted that the challenge of overcapacity was imminent. “The KPLC board, recognising the Government’s objective to keep power costs low and the fact that KPLC has an obligation to make payment for all generation capacity that comes online, has with immediate effect suspended consideration of PPAs for additional generation,” said Eng Maalim in the letter to ERC. Drastic step “This step is intended to give the company an opportunity to carry out a comprehensive review of the power demand-supply situation and the mix of generation sources (conventional versus intermittent) to guide the implementation of generation projects going forward.”
SEE ALSO :Witness vindicates firm managers“That is why we have a plan, the LCPDP, which is a 20-year plan that incorporates transmission lines and generation plants, to make sure that you have the infrastructure to produce power and take it to the people.” He observed that ERC’s tariff reviews determining the price that consumers pay per unit of power usually factors in existing power plants as well as those that are coming on board. Mr Oimeke said ERC reviews electricity demand and supply regularly and advise investors to hold off on new investments so as to match new generation capacity with demand. “We do tariff reviews as a Commission and take into consideration plants that are generating or expected to generate within that tariff period into that tariff,” he said. “We provide the revenue requirements for the sector, which means that Kenya Power would be able to pay for I do not understand where he is coming from or what his worry is about.” “When undertaking energy planning, we ensure that there is a balance between demand and supply. We review this every two years. If we think we are having more generation than demand, we stagger the projects such that implementation is delayed… any project that we feel is coming online too fast that what the country can take, we will always push it forward. Looking at the plants planned for the next two years, we have nothing to worry about.” Run sustainably “In the energy planning process, we take care of all stakeholders, from consumers where we ensure that the cost is affordable while the companies such as the generators and the utilities are able to run sustainably.” The ERC boss called for the displacement of the costly thermal power plants that will create a reserve margin of between 15 and 20 per cent. Currently, the installed power generating capacity stands at about 2,700MW, when the Lake Turkana Wind Power plant and the Garissa Solar Plant are factored in. Of this, thermal power plants account for 710MW. “When the 700MW from the thermal plants are not factored in the installed capacity since we want to displace them, you realise we are still low on installed capacity against peak demand of 1859MW as well as the need for a reserve margin of up to 20 per cent, which ensures safe operation of the grid,” said Oimeke.
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