KenGen maintains it is not ready to retire costly thermal power plants

Kenya will continue operating costly diesel-fired thermal power generators.

This means the fuel cost adjustment component on monthly power bills will remain a permanent feature, despite substantial growth in the electricity generated from renewable sources.

The Kenya Electricity Generating Company (KenGen) last week ruled out the possibility of retiring all thermal power plants.

Cheaper alternatives

The firm said even with adequate capacity from cheaper alternatives, such as geothermal, hydro and wind, the thermal plants were necessary and would act as a backup.

KenGen generates about 80 per cent of all the electricity consumed in the country.

The firm, however, said the amount of electricity from thermal plants that would be fed into the grid will be minimal and progressively replaced with electricity from renewable sources.

Still, maintaining the plants – even when they are not feeding into the grid – will come at a cost, which will be passed on to consumers. This means power costs will not substantially decrease.

KenGen CEO Albert Mugo said it is essential for the country to have a diversified generation mix, including thermal plants, even if they will not be generating and feeding power into the national electricity grid.

“Thermal plants will be there, but they will remain largely as standby. We are looking at what would happen if we have a big drought like we had in 2000 and power from the hydro pants reduced by as much as 50 per cent,” he said.

“The thermals will be there, but only used on an as-and-when-needed basis, for instance, during emergencies like drought or when we are carrying out maintenance of geothermal and hydro-power plants.”

He added that there have been efforts to ensure little electricity from the thermal plants is fed into the national grid.

According to KenGen’s financials, in the 2015-16 financial year, the firm reduced the amount of electricity from diesel-fired plants that was consumed by Kenyans to 435 Gigawatt-hours (GWh) from 578 GWh the previous year – a 25 per cent reduction.

Generation capacity

Further, data from the Kenya National Bureau of Statistics (KNBS) shows electricity generated from thermal sources had dropped 10 per cent to 855.5 million kilowatt-hours (kWh) by August this year. In August last year, thermal sources generated 951.9 million kWh.

Mr Mugo said the firm is in plans to further reduce the amount of thermal electricity it sells to distributor Kenya Power.

It is currently building geothermal and wind power plants that will increase its generation capacity by 725 megawatts (MW). Currently, it has installed capacity of about 1,600MW.

“What I can assure you, however, is that as we get more from the geothermal plants, we will see the generation from the thermals coming down,” he said.

“Currently, thermals account for about 10 per cent of the power being fed into the grid, and when more of the green energy comes in, the thermals will be much lower than 10 per cent.”

The CEO added that there have been instances in the past when the country has been in a difficult situation due to heavy reliance on hydro-power plants.

“In 2013, hydro levels were very depressed because we did not have adequate water after a prolonged dry spell.”

Thermal power plants have been a nuisance for Kenyans and have been largely to blame for sudden spikes in power bills.

This is because of the high cost of generating electricity from fuel. The volatility of international oil prices – especially in the past – and unpredictable weather made the situation worse.

The Government has been pursuing cheap power and has an ambitious plan to add 5,000MW to the current installed capacity of about 2,300MW by next year. This, however, is not likely to come to fruition owing to a number of factors, including the scale of investment required, as well as the fact there is currently no demand for such capacity.

The push for cheap electricity is, however, still on. 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 Kenyan consumers.

[email protected]