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Pressure for Kenya Power as electricity output hits record high

BUSINESS
By Patrick Alushula | May 4th 2022 | 2 min read
By Patrick Alushula | May 4th 2022
BUSINESS

Kenya Power offices, Nairobi [Photo: Courtesy]

Kenya Power faces an increased burden of paying for idle electricity after power generators raised production to the highest level in a single month.

Data from the Energy and Petroleum Regulatory Authority (Epra) shows that power producers such as KenGen increased their supply to Kenya Power to 1.093 billion kilowatt-hours (kWh) in March.

The output is a 9.9 per cent rise from the 960.84 million kWh that was supplied in the previous month, and now jumps above the previous record supply of 1.058 billion kWh set in March last year.

Sustained increased electricity production looks set to pile pressure on Kenya Power, which is still running on take-or-pay agreements with independent power producers.

This means Kenya Power has to pay for the supplied electricity even if government institutions, individual households, private industries and companies — still feeling the Covid-19 impact — will not manage to buy.

Last year, Kenya Power’s total electricity sales were 9.57 billion kWh or 77.1 per cent of the total 12.44 billion kWh that was generated in the same period.

This means about 22.9 per cent of the power, or 2.844 billion kWh, produced was not sold.

Kenya Power customers increased from 4.89 million in June 2016 to 8.28 million in June last year, but the growth in consumption has not kept up with that of electricity connections.

The country’s demand for electricity has sustained a modest upward trend, growing at an average rate of 4.5 per cent year-on-year, driven by rising economic activities.

Excess electricity generation has been a major concern for Kenya Power, which has to pay for the electricity generated even when there is no market to sell to.

The March supply was, for instance, 31.6 per cent higher than the 826.8 million kWh that Kenya Power sold to consumers in the previous month.

Data from Kenya National Bureau of Statistics shows the utility firm sold 835.08 million kWh of electricity in October—the highest in its history.

But the consumption slowed to hit 800.94 million kWh in December before recovering to 826.8 million kWh in January 2022.

Kenya Power in January effected a 15 per cent cut in power bills as directed by President Uhuru Kenyatta but it is not yet clear how the firm will deal with the foregone revenue.

The Ministry of Energy says it is still working to see the second 15 per cent reduction is affected in the first quarter of the year, bringing the total cut to 30 per cent.

But idle power and system losses that are above the 19.9 per cent that the regulator allows Kenya Power to pass onto the customers' bills remains a concern for the utility firm.

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