Electricity peak demand hit a fresh high of 2,304 Megawatts (MW) last month but a five-times jump in unused capacity, commonly known as the spinning reserve, eased concerns of possible power rationing amid a freeze on new power purchase agreements.
Kenya Power says new peak demand was recorded on January 15, on the day that the spinning reserve jumped to 106 MW compared to the 35MW when the country recorded the previous peak demand of 2,788MW.
Spinning reserve, also known as contingency reserve, refers to backup power that is available and ready to be dispatched quickly when there's an outage.
Concerns have been growing that rising demand for electricity may force Kenya Power into rationing during peak demand due to the low spinning reserve available. The standard recommendation for a spinning reserve is 310MW.
Kenya Power was forced to load shed in August last year due to the dwindling spinning reserves, bringing to the fore the impact of the freeze on new PPAs and the cancellation of 92 power projects that were in the early stages of development in 2021.
The utility says the possibility of forced rationing remains real despite the deal with Ethiopia and Uganda, which allows Kenya to import a combined 250MW to shore supply.
“The power is therefore not available at peak since it is already running at the time of peak. It is counted under installed capacity when computing the spinning reserve,” Kenya Power says.
Kenya Power is currently barred from signing new power purchase agreements (PPAs) with generation firms, a freeze that the utility and the parent Energy ministry have warned could lead to a forced rationing.
The projects that were cancelled had a combined generation of 2,345.07MW. The revocation was meant to allow the government to align all new PPAs to the Least Cost Power Development Plan (LCPDP).
LCPDP’s key objective is to develop a capacity expansion plan to meet projected demand at minimal cost.
There were also concerns that the projects would provide costly power amid a government push for cheaper energy from renewable sources such as geothermal, wind, solar, and hydro.
The Cabinet lifted the freeze in 2023 but Members of Parliament vetoed the move last year, dealing a blow to the plans to onboard new power suppliers to the national grid.
Kenya Power has been heavily relying on imports from Ethiopia and a power exchange deal with Uganda to boost the national grid amid a freeze on new PPAs.
Kenya inked a deal to import electricity from Ethiopia from November 2022, with the power priced at $0.065 (Sh10.2) per kilowatt but Kenya is keen to exercise a clause in the contract that allows for tariff renegotiation from 2027 at the earliest.
The country also relies on supplies from Uganda under a power exchange deal where the country that imports more from each other pays at the end of a given period. Kenya has for the larger part been a net importer in this deal.
