Kenya: Diesel Power Hits Three-Year Low

14 October 2019

The share of expensive thermal power in the national grid has reduced to 13.4 percent, the lowest in three years on increased uptake of green energy, despite the relatively static power bills.

Official data for eight months to August 2019 show that the amount of thermal power generated dropped 15.6 per cent to 1,014 gigawatt hours (GWh) as wind and solar power production was stepped up.

During this period, the combined share of wind and solar energy to the grid rose to 15.5 percent from last year's 0.34 percent, majorly boosted by 310 megawatts from Lake Turkana Wind Power project and 54.6 megawatts from Garissa solar plant.

This has cut the share of thermal energy in national grid for the second straight year to 13.4 percent of the 7,572 GWh total local electricity produced in eight months.

Thermal energy had a share of 26.46 percent in the national grid in 2017 before falling to 16.5 per cent last year. It was at a high of 34.49 percent in 2014 owing to erratic rains that reduced hydropower source.

Consuming more electricity from green sources is supposed to result in lower electricity bills given that wind power is priced at Sh8 per kilowatt hours (kWh) compared to thermal power, which costs about Sh15 per kWh.

Fuel cost charge -- which is influenced by the share of electricity from diesel generators- averaged Sh3.17 per kWh in eight months to August, being 29.8 per cent lower than the average of Sh4.52 per kWh in a similar period last year.

Energy and Petroleum Regulatory Authority has maintained that more savings could only be realised when the country's demand for electricity rises so that customers share the fixed cost element in power production.

Kenya is still stuck with expensive thermal power purchase agreements whose termination could attract up to Sh9 billion, according last year's estimates the Energy ministry.

The first contract ends in 2023 while the longest one expires in 2031.

This could see consumers wait longer for cheaper bills despite wind power having overtaken thermal to number three in contribution of electricity to the national grid.

Geothermal is the biggest accounting for 44.12 percent of electricity generation mix at 3,341 GWh, while hydro is second at 26.98 percent with 2,043 GWh.

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