Taxpayers to Part With 36 Billion Shillings to Get Affordable Power

It will cost Kenyans a total of 36 billion shillings if the government is to entirely terminate the thermal Power Purchase Agreements (PPAs) for cheap electricity, says Parvel Oimeke, the director general of the Energy Regulatory Commission (ERC).

The amount is equivalent of a penalty that stands in the way should the government choose to end the agreement and bring a stop to the diesel-powered electricity.

Currently, the number of diesel power plants across the country stands at 23 and they account for 700MW or 25 percent of the cumulative installed capacity. These plants roar to life when hydro-electric plants are down.

Despite their coming in handy when other options aren’t forthcoming, many have associated the high cost of power to the diesel used by the plant’s generators. Compared to wind power, diesel electricity is 20 shillings more per kilowatt hour. Wind power costs 8.70 shillings per kilowatt hour.

In November 2018, Charles Keter, the Energy Cabinet Secretary stated in a proposal to the Senate that the government is faced with two options; terminate the plant’s connection to the national grid or run down the contracts.

According to Keter, the contract for Kipevu Diesel’s 60MW plant runs up to July 2023, while the74MW Tsavo Power contract will end in September 2021. Time is nigh, however, for Iberafrica Power Plant’s 56MW contract, which will end in October 2019.

The wait for cheap electricity, on the contrary, will wait for a bit longer given the fact that Kenya is looking to achieve 100 percent green energy in the national electrification strategy by 2020. This means phasing out the expensive plants will be dragged out due to various challenges.

Initially, it was projected that both the Garissa Solar Power, which was expected to output 55MW, and the 310MW Lake Turkana Wind Power would be sufficient to cut the high costs of electricity.

But the inception of an additional 365MW green power is an indication that the country still has a long way to go. The green energy is to be launched officially at an unspecified time and is set to boost Kenya’s electricity supply. Moreover, it will revive the hope of the country not renewing any thermal license or making any further deals.

The biggest contributors of power in Kenya at the moment are KenGen national grid (1,631MW), hydropower (818MW), geothermal (534MW), thermal (253.5MW), and wind at 25.5MW.

The government encourages regional interconnection of power systems for stability since there is still need for more power and minimal energy is imported from Uganda. Kenya is still awaiting Ethiopia’s cheaper electricity that will address the inadequacy.

Meanwhile, the World Bank’s 15 billion shillings funding for power through the Kenya Off Grid Solar Access Project (KOSAP) will see several homes benefit from cheap and green electricity.

Also, the government is doing its best to woo investors for a scale-up of the private investment in off-grid power options.