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Pain for consumers as Kenya now turns to expensive thermal power

NEWS
By Macharia Kamau | August 30th 2021

The impact of relying on the more expensive electricity has been the increase in the cost of power for Kenyans. [Courtesy]

Costly thermal power producers are making a strong comeback after a lull last year resulting from a drop in energy consumption.

The decline then saw Kenya Power reduce the amount of electricity purchased from the thermal producers.

The firms are now increasing the amount of power they feed to the grid, leading to a higher cost of electricity for consumers.

Data shows that in the half-year to June, there was increased consumption of thermal electricity to meet the growing demand for power.

This came as major consumers continued to shake off the Covid-19 blues that slowed down economic activity, and with it reduced demand for electricity.

According to Kenya National Bureau of Statistics (KNBS) data, the amount of thermal power consumed over the first half of this year increased to 503 million units (kilowatt hours-kWh), a 58 per cent growth from 317 million units used over a similar period in 2020.

The sharp rise points to recovery among the thermal power producers, which experienced low sales to Kenya Power following the outbreak of Covid-19.

The electricity firms are, however, yet to reach the 2019 levels where they sold 749 million kWh to Kenya Power over the first half of the year, according to KNBS.

For a few months following the outbreak of Covid-19 in March 2020, Kenya Power reduced the amount of electricity it bought from the producers, particularly thermal firms.

The electricity bill for a household consuming 200 units of power rose to Sh5,000 in July this year. [Courtesy]

It issued independent power producers with force majeure notices that it could not buy power from them as agreed in the power purchase agreements (PPAs) due to a major drop in consumption following measures put in place to curb the spread of Covid-19.

The slowdown in economic activity resulted in Kenyans consuming 645 million units of electricity in April 2020 compared to 761 million units in March.

In April, power producers sold to Kenya Power 849 million kWh, which means that the electricity retailer was left with 204 million units that it could not sell to its customers.

This saw it invoke the force majeure clauses in the PPAs. Consumption has, however, gone up and even surpassed pre-pandemic levels.

Other than expensive power from the thermal firms, the country also upped electricity importation, mostly from Uganda, which plugs the deficit between local production and demand.

The amount of power imported doubled to 122.99 million kWh this year from 62.84 million units over the first half of last year.

The total amount of power consumed also increased to 5.95 billion units over the six-month period, up from 5.5 billion kWh over a similar period last year.

The impact of relying on the more expensive electricity has been the increase in the cost of power for Kenyans.

Thus, the electricity bill for a household consuming 200 units of power rose to Sh5,000 in July this year from Sh4,600 in February.

According to KNBS data, the cost of power for 200 units stood at Sh4,500 at the beginning of last year.

 

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