Consumers will pay an extra Sh2 per unit of electricity starting this month.
This is because depressed rainfall has reduced the water levels in key dams, forcing the country to use thermal power.
The government had pledged to lower the cost of electricity by 40 per cent to make the country an attractive investment destination.
This promise will now be put on hold.
“The fuel cost charge will rise to Sh7.22/kwh from Sh5.19/kwh from May as a result of increased thermal generation.
This will ensure recovery of unrecovered amounts from January to May 2014,” said Energy Regulatory Commission (ERC) acting director-general Fredrick Nyang’.
Kenya Power has since January been recovering the pass-through cost from monthly power bills as more thermal output displaced hydropower, with the dams shedding 10 metres of their spilling points this month.
“The outstanding amount is Sh2.4 billion.
This will be gradually recovered in the monthly power bills up to November this year,” said the Kenya Power managing director, Mr Ben Chumo, during a tour of the Masinga dam last week.
Thermal power currently accounts for 42 per cent of the total electricity, more than double the level recorded during the same period last year when it accounted for just 19 per cent.
Expensive thermal power was to be removed last December and replaced with affordable geothermal electricity.
ERC says the expected cost of fuel charge is likely to reduce with the commissioning of 280MW geothermal projects and resumption of the short rains in October.
Upsurge of thermal use
“The commissioning of the 280MW geothermal power projects experienced delays, hence the need to reduce the extraction levels so as to extend the available storage.
Consequently, an upsurge of thermal use to meet demand, hence increasing fuel costs,” said Dr Nyang’.
Hydro is the predominant source of power in Kenya but it is currently facing challenges because of low rain.
This has left the country in a tough situation, with the possibility of rationing power or turning to diesel plants.
Kenya’s current installed capacity is 1,700MW against demand for 2,236MW, leaving a shortfall of 536MW, and this is after providing for a 30 per cent reserve margin.
While thermals are mainly concentrated at the Coast, completion of the Mombasa-Nairobi 400KV line will also reduce transmission losses, currently at 18 per cent, because of its high voltage carrying capacity to the capital, where 60 per cent of the demand is concentrated.
Manufacturers, however, insist on the availability, stability, and reliability of the power supplied.
“It is better if we have expensive but consistent power in the national grid,” said Pradeep Paunrana, the managing director Athi River Mining Ltd, the cement manufacturers.
Mr Paunrana is also the incoming chairman of the Kenya Association of Manufacturers (KAM).
Dedicated lines
“There is a need to catch up on electricity generation.
While this is part of the Jubilee manifesto, it is also in line with the KAM business agenda.
Coordination of these projects with the private sector will avoid passing on unnecessary costs to consumers,” added Mr Paunrana.
“We are among the top 200 consumers of power and we would do with dedicated lines of reliable power.
This will help lower our production costs and make us competitive,” he said.
