Kenya Power bets on e-mobility for growth

Kenya Power is looking at e-mobility as a key growth area and a strategy to diversify its revenues.

This is as the firm readies for increased competition following a recent change in the law, allowing competitors into the distribution and retail of electricity.

The company has also seen its market share shrink as key consumers install solar power plants. 

The firm said e-mobility offers an opportunity for growth and aside from a special tariff for the industry that was introduced last year, the firm is rolling out charging infrastructure across the country as it looks to cash in on the fast-growing electric vehicle (EV) sector. 

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“We are looking at e-mobility and the opportunities it avails as part of the strategies to future-proof Kenya Power. We realise that our cheese of selling power is moving and eventually we may not be able to make a lot of profit from just selling power so we have to expand our view of services that we offer to Kenyans and this is one of the ways we think we can expand our business.”

In the tariff review last year, the Energy and Petroleum Regulatory Authority (Epra) introduced a new consumer category – e-mobility – where firms that have set up charging stations pay a base rate of Sh16 per unit of electricity consumed during peak hours and Sh8 during off-peak hours.

Kenya Power expects growing EV adoption to increase power consumption during the night off-peak hours when most EVs, especially in the matatu industry are charged and at the same time grow its revenues.

The firm, which has for years enjoyed a monopoly in the distribution and retail of electricity in the country, faces competition with the industry now open to other players.

The Energy Ministry recently gazetted the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024.

The regulations open up the market to other electricity distributors and retailers to compete with Kenya Power by offering modalities on how interested players can get into the lucrative but capital-intensive electricity retail sector.

Additionally, the firm's major customers have been installing their own power plants, mostly solar, in a bid to reduce power bills, meet internal electricity requirements or meet their green goals. 

According to the Energy and Petroleum Regulatory Authority (Epra), such small power plants had a combined capacity to generate 449.5 megawatts (MW) and constituted 12.18 per cent of the country’s installed capacity as of December 2023. 

According to Epra, in just six months between June and December last year, there were new captive solar PV generation plants that came into operation and had a combined capacity of 196.2 MW.

Kenya Power on Monday launched two EV charging stations at its offices at Ngara and its research institute at Ruaraka and planned to roll out another nine stations by June this year. 

Chief Executive Dr Joseph Siror said the anticipated increase in the number of electric vehicles on Kenyan roads offers a major opportunity for the firm. 

“Electric mobility is one of our sustainable business growth areas that will define contribution to the global climate agenda and as part of our sales growth strategy,” he said at the conference yesterday. 

“We are investing Sh268 million in the next three years to install EV chargers at our offices across the country and purchasing light and heavy-duty vehicles and electric motorbikes to support our operations.”

He added that the adoption of EVs is gaining momentum and last year accounted for about eight per cent of new vehicles sold in the country. 

There are about 4,000 EVs, including e-motorcycles, in the country, many of them imported into the country in the last two years, according to the E-Mobility Association of Kenya. 

Epra in a recent report attributed the increase in registered EVs to government initiatives such as the introduction of the e-mobility tariff, reduction of excise duty on EVs from 20 per cent to 10 per cent and exemption of fully electric cars from Value Added Tax (VAT).