The geothermal plant at OlKaria: The government is now turning to cheaper energy sources. FILE
XINHUA
By Victor Juma
In Summary
- Energy Cabinet Secretary Davis Chirchir says move is critical to making Kenya a low-cost power economy in the next 3 years.
- Retirement of the emergency power generators has removed a total of 260 megawatts of expensive electricity from the national grid.
The government has embarked on an ambitious plan
to rid the country of expensive diesel power plants, a move that could
cut electricity costs by more than 15 per cent beginning mid next year.
Energy Cabinet Secretary Davis Chirchir says the
journey to making Kenya a low-cost energy economy has started with the
shutdown of all emergency power plants, save for Aggreko’s 30 megawatts
(MW) plant in Muhoroni.
Retirement of the emergency power generators has
removed a total of 260 megawatts of expensive electricity from the
national grid, significantly cutting down the fuel cost segment of
consumer bills.
Mr Chirchir says his ministry intends to go
further and shut down all diesel and fuel oil power generators or limit
their contribution to the national power pool to a bare minimum,
pushing down fuel cost charges in the billings even further.
This is the basis upon which the Energy Regulatory
Commission (ERC) is projecting a steady decline in the cost of power
across the various categories of users beginning mid next year.
“We are bringing on board 70 megawatts of
geothermal electricity to the national grid in December,” Mr Chirchir
said. “An additional 70 megawatts are coming on board in March and
another 40MW in September.”
The plan is to add a total of 240MW of cheaper
geothermal power to the national grid by the end of next year. That will
raise the contribution of renewable power sources to about 70 per cent
from the current 61 per cent.
“The ideal position would be to shut down thermal
power plants completely, but we realise that we have contractual
obligations with these independent power producers. We have therefore
decided to keep their contribution to the minimum in order to cut on the
fuel costs,” the minister said.
So central is the removal of thermal power
generators from the grid that Mr Chirchir says the government is ready
to pay the independent power producers (IPPs) capacity charge – even as
they sit idle – to rid the economy of their burden.
That is significant because replacing one megawatt
of thermal (diesel or fuel oil) generated electricity with geothermal
power cuts the fuel cost charges in the billings by more than 80 per
cent from 20 US cents (Sh17) per kilowatt hour (kwh) to four US cents
(Sh3) per kwh.
Fuel cost currently accounts for up to 40 per cent
of the total consumer bills and pushing it down amounts to big savings
for consumers, turning Kenya into a low-cost energy economy.
Mr Chirchir admits that the cost of power will
rise for commercial and industrial power consumers next month, but that
is a temporary measure arising from last week’s increase in fixed and
consumption charges in recognition of the capital investments that
industry operators have or are making in the system.
If implemented as planned, the strategy will by
June next year start to reverse the looming increase in power costs of
up to 11 per cent next month.
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