Kenya Power offices on Aga Khan Walk in Nairobi.
Kenya Power relied more on expensive electricity generated from diesel-powered plants in the first five months of this year to make up for dwindling generation from water and imports, hurting efforts to lower energy costs.
An analysis of official data shows the share of thermal or diesel power in the national grid rose to 10.45 per cent or 632.63 kilowatt-hours (kWh) between January and May this year, up from 7.6 per cent (437.43kWh) in the same period of last year.
Generation of hydro-power dropped to 1,429.49kWh from 1,518.86kWh while imports of electricity fell to 650.61kWh from 659.9kWh, forcing Kenya Power to tap more thermal electricity. Thermal power is the most expensive, with a unit costing up to Sh50 which is 17 times more than locally produced hydro-power —the cheapest source— where a unit goes for an average of Sh3.83. A unit of geothermal power goes for an average of Sh10.28.
Increased use of thermal power came at a time of rising electricity prices with consumers getting 19.2 units for Sh500 in May this year, compared to 19.5 units for the same wattage in December last year.
Use of thermal power in the national grid has been cited as key hindrance to Kenya Power’s efforts to lower the cost of electricity.
Thermal power in the national grid is costly whenever fuel prices shoot up due to the Fuel Cost Charge (FCC) that is factored in monthly power bills.
“One of the challenges of thermal power generation include high and fluctuating imported fuel prices, making electricity generation expensive and unpredictable,” the Ministry of Energy says in the draft National Energy policy.
FCC is used to compensate thermal power plants for the fuel used every month to generate electricity. FCC has averaged Sh3.62 for every kWh of electricity between January and May this year.
Imports from Ethiopia dipped to 522.94kWh over the five months compared to 569.68kWh a year earlier while supply from Uganda rose to 97.92kWh from 90.22kWh.
Supply from the dominant geothermal rose to 2,354.43kWh from 2,258.86kWh. Kenya Power had 6,051.94kWh for sale to customers in the review period compared to the 5,738.62kWh available to the utility in the same period last year.
The share of thermal power in the national grid dropped from 15.38 percent in 2022 to 11.4 percent the following year and 7.6 percent last year.
Kenya has in the past few years set out to gradually lower the share of thermal power in the national grid in a bid to lower electricity prices and also reduce pollution of the environment by fossil fuels.
But a freeze on new power purchase deals has also triggered alarm bells from Kenya Power, with the utility warning that it could be forced to tap more thermal power to crisis amid a rising demand.
“There is a potential supply risk that may negatively impact generation adequacy to meet the country’s growing energy demand. This is likely to increase reliance on emissive thermal energy sources,” Kenya Power says its latest annual report.
There are seven thermal power plants currently supplying electricity to Kenya Power, with two owned by KenGen while the rest by independent power producers.
Electricity demand has jumped by 46MW since February this year with the economy recording a new peak demand of 2,362.28 Megawatts on Wednesday this week, piling more pressure on Kenya Power to ensure reliable supplies despite a freeze on new power purchase deals.
