State slashes power output on low demand

Energy Cabinet Secretary Charles Keter.

The Government has announced plans to cut back on plans to increase the country’s installed electricity capacity due to low uptake by large power consumers.

Energy Cabinet Secretary Charles Keter said yesterday the ministry plans to increase the country’s power production installed capacity to 7,200 megawatts (MW) by 2030, down from an initial target of 10,000MW.

He said this has been informed by the sector’s trend that shows that while the number of domestic power consumers had surged significantly over the last six years, industrial consumers have only grown marginally.

To reverse the trend, the CS said, the Government is working on different approaches to attract heavy power users, including incentives for investors setting up in industrial parks.

“We will need to focus on demand growth, developing industrial parks to spur the economy. Currently, of the about 6.7 million power consumers that we have, more than six million are domestic whose use of power is low at about 10 units per month on average,” said Keter during the 7th KenGen Global Innovation Seminar at the Kenya School of Government in Nairobi.

“If a household is paying about Sh200 a month, you find that the revenues would not be able to sustain the power industry.”

He said the Government is particularly focusing on Small and Medium Enterprises (SMEs) to spur the demand for electricity.

“Otherwise, if we have too many power plants without enough users, it will be expensive to maintain an idle capacity charge,” said the CS.

The challenge that the power industry faces is already evident in Government’s downward review of planned power plants over the next decade.

Plans to scale down the projected installed capacity over the next 11 years follow a similar move that saw a programme for a capacity of 5,000MW over a three-year period beginning 2014 abandoned due to slow growth in demand.

The country currently has an installed capacity of 2,732MW with a peak demand of about 18,700MW.

Kenya Power had  6.76 million customers as of June 2018, having grown from two million in 2013.

Of these, users under the domestic band, numbering over 6.7 million while the very large consumers stood at 4,000 and SMEs numbered 40,000.

The power utility, which collects revenue on behalf of the industry, faces the challenge of dismal use among domestic users, a substantial number of whom are low-income households.

The over 6.7 million domestic consumers used 1 117 gigawatt hours (GWh) over the six months to December last year.

This is in comparison to 2,197GWh by commercial and industrial consumers.

Consumption by this segment is about double what the domestic consumers used.