Govt to Review Energy Deals Amidst Rising Cost of Power

The Ministry of Energy has established a taskforce to review existing Power Purchase Agreements (PPAs) between Kenya Power and energy producers.

The task force, will be expected to determine the cost effectiveness of the power purchase agreements signed between the government and IPPs, and also between the Kenya Power and Lighting Company (KPLC) and power plants operated by KENGEN.

This follows a directive by President Uhuru Kenyatta during the State House Energy Summit held in June this year. The Head of State said all contracts with Independent Power Producers (IPPS) should be reviewed to ascertain their cost effectiveness amid soaring cost of power.

Read: Kenya Power on the Spot Over Rising Electricity Cost

Energy Cabinet Secretary Charles Keter says close to 3600MW has been committed by IPPs and that the review by the task force will work to reduce the cost of tariffs.

“It is recognized that because of technological advances and innovation, the cost of equipment for Feed-in Tariffs technologies have drastically reduced, and we intent to leverage on this positive change so that we can give Kenyans the best tariff,” said Energy Cabinet Secretary Charles Keter.

Together with PS’s In the ministry at the launch of the Ministry IPP-PPA review task force aimed at obtaining cost effectiveness of power. pic.twitter.com/xGZmHbTrcx

— Charles Keter (@ketercharles) November 15, 2016

Despite the introduction of additional geothermal power that is cheaper, electricity bills have still remained high making it hard for businesses and households to operate smoothly. The Energy ministry has suspended further processing of Expressions of Interest under the Feed-In Tariffs policy.

Members of the taskforce will be drawn from various sector players including the National Treasury, State Law Office, Kepsa, the Kenya Association of Manufacturers (KAM), university dons and energy regulation and commercial law experts. It is expected to hand over its findings to the ministry by the end of this year.