ERC to Reduce Cost of Electricity for Small Power Generators

The Energy Regulatory Commission (ERC) is set to reduce the electricity cost charged by small power generators to households not connected to the Kenya Power grid.

According to ERC, fresh regulations on the reduced costs should be expected before the end of the year.

The fresh regulations will provide a framework for Kenya Power to buy out mini-grids from private developers and supply customers at lower uniform national tariffs.

The mini-power generators will have the option of buying bulk electricity from Kenya Power for onward selling to homes and businesses through their mini-grids.

The third alternative would be for private investors to set up the small grids, often powered by solar sources, and let Kenya Power retail electricity to customers on their behalf, ensuring lower costs for developers.

ERC renewable energy manager Caroline Kimathi said they want to ensure that there is some level of equity in power costs, regardless of the mode of distribution.

“It’s not fair for poor homes in remote villages to access power at higher rates than what the rich are paying,” said Caroline Kimathi.

The Smaller electricity distributors costs are up to 12 times what Kenya Power levies.

The proposals will, however, only strengthen Kenya Power’s monopoly despite the Energy Bill providing for the licensing of other electricity distributors and retailers, in a move that aims to increase competition and improve service delivery.

Interest in off-grid projects has been on the rise after the government signaled adoption of micro-grid technology to enhance energy access, especially in remote off-grid areas.