Firms save Sh1.5bn from night-time power tariff
A Kenya Power Company Employee carry out repairs on a power transformer.
Some 18,109 companies saved Sh1.57 billion in electricity costs in the financial year to June 2022 by switching bulk of their production to off-peak hours to enjoy lower power tariffs.
The Energy and Petroleum Regulatory Authority (Epra) introduced the Time of Use (ToU) tariff in January 2018 to encourage large power users especially manufacturers to switch their production activities to night-time when demand for electricity is low.
The tariff offers large power users a 50 per cent discount on their electricity costs for use of electricity between 10pm and 6am once they have exceeded their average monthly power use based on their average use in the previous six months.
“In the period under review, a total of 18,109 customers benefited from the ToU tariffs discounts, realizing savings of Sh1.575 billion,” said Epra.
During night-time, power generation from wind, solar and geothermal is at its highest often exceeding demand forcing Kenya Power to curtail the generation at between 12am and 4.30am when demand is at its lowest.
To tap the excess energy produced during off-peak hours, Kenya Power and KenGen have separately announced their own plans to develop grid-level energy saving systems (ESS) to tap this power and deploy it to the grid during periods of high demand.
Kenya has been trying to woo more industrial and commercial power users to switch their production to off-peak hours to enjoy these lower tariffs.
However, these efforts have yielded limited returns as many firms are reluctant to due to logistical challenges of night-time operations.
Further, manufacturers have argued that the threshold of power consumption that they have to meet before they start to enjoy the cheaper tariff is too high and therefore needs to be reduced if the ToU tariff is to succeed.
The Kenya Association of Manufacturers (KAM) recently said it had commenced talks with the government to lower this threshold to enable more firms to benefit from the tariff and boost the local manufacturing sector.
