Kenya’s “Excess” Power Generation Burdens the Country’s Electricity Distributor - Africa’s premier report on the oil, gas and energy landscape.

Kenya’s “Excess” Power Generation Burdens the Country’s Electricity Distributor

Kenya’s Energy and Petroleum Regulatory Authority (Epra) reports that the country’s electricity generating firms have increased their output to such an extent that the nation has a problem of idle power.

With rising cost of fuel and reduced rate of increase in demand, a heavy financial burden now lies on Kenya Power, the country’s distribution utility.

KenGen, the top generating company, and other power producers increased their supply to Kenya Power to 1.058Billion kilowatt-hours (kWh) in March 2021, reports the Epra, a figure described by the, Business Daily Africa, the leading local financial newspaper, as an “all time high”.

“The March 2021 figure is an 11.8% rise from 946.09Million kWh that was supplied in the previous month and now jumps above the previous record supply that had been set last October”, the newspaper explains.

Business Daily Africa says that the spike in generation “exposedhomes and businesses to the burden of paying for idle electricity”amid depressed consumption. “Payments for idle electricity is a pass-on cost to consumers. The take-or-pay clause in contracts signed between government and power producers compels Kenya Power to buy the agreed amount of electricity regardless of whether or not the utility needs the energy”.

Kenya Power, the distribution company, has been struggling. In February 2021, it reported that revenue from the sale of electricity fell to $635Million (KSh69.014Billion) in the six months period that ended on December 31, 2020, compared to $641Million (KSh69.607 Billion) at the end of December 2019. Transmission and distribution costs dropped 19% to $17.2Million (KSh18.7Billion) from 212Million (KSh23Billion) in the corresponding half year period in 2019.

The March 2021 supply is for instance 41.5% higher than the 748.44Million kWh that Kenya Power sold to consumers in February 2021.

“The excess generation has been a major concern for Kenya Power, which has to pay for the electricity generated even when there is no market to sell it”, the daily concludes.

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