High cost of electricity may not go down soon: Power broker

Thika Power Limited Chairman George Njenga. [Elvis Ogina, Standard]

The high cost of electricity in the country will not go down anytime soon unless there is reduction on high cost of fuel, elimination of excessive taxes and fluctuations on the dollar and other foreign currencies stabilise.

Thika Power Limited Chairman George Njenga told the Committee Chaired by Nyeri Senator Wahome Wamatinga that has been engaging various stakeholders on how best to lower electricity cost that factors such as lack of rain that make Kenya Power to use thermal power plants to generate power.

Njenga told the Senators that this leads to high cost of fuel especially High Fuel Oils used in powering the thermal plants, adding that the cost of electricity will always be high and that the Independent Power Producers were not to blame for the challenges faced in Kenyans who rely electric energy.

“I would like to tell the members of the Senate Energy Committee that Independent Power Producers are being vilified for nothing since there are other factors such as the high cost of fuel, fluctuations of the dollar currency, taxes and drought among other challenges,” said Njenga.

Njenga who serves as chairperson of both Thika Power and Iber Africa told the committee that Kenya Power can only lower the cost of power in the country if the thermal plants acquire the high fuel oil in large quantities from low priced countries.

He told the committee that during the dry season Kenya Power depends on thermal plants to reduce the deficit of power which is caused by a reduction of water levels to power hydro plants across the country.

The chairman told the committee that his company bases their charges on what they are charged passing over the cost to other players. He termed the High Fuel Oil cost as the biggest challenge because it contributes to 70 per cent of the total cost of production and that how it will be handled will determine will play a role in lowering electricity cost.

“The lowering of electricity cost in the country will require combined efforts of all stakeholders in the industry to play their role blaming each it will never be a solution, this is achievable especially if High Fuel Oil is bought in large quantities,” said Njenga.

Njenga said that with the Power Purchase Agreement (PPA) between Thika power and its sister company Iber Africa expiring in March 2034, the two power plants will be charging capacity cost of $30 cents equivalent to Sh40.6 per kilowatt per hour.

Nairobi Senator Edwin Sifuna asked why Thika Power and Iber Africa are owned by a Danish company and that Mukuru kwa Njenga residents are not benefiting from the power being produced by the plant in within their vicinity.

“I would like to ask the management of Thika Power and Iber Africa if they are aware that most of the people of Mukuru Kwa Njenga do not have power supply despite the plant being in their vicinity. How can you help them benefit from this service that is near them,” said Sifuna.