Energy regulator assures of low electricity cost for consumers

Energy Regulatory Commission Director-General Joe Ng'ang'a during an interview in his office in Nairobi on September 4, 2015. The regulator's deputy director for electricity, Tom Simiyu, expects a further drop in thermal generation due to displacement by hydro plants. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

In Summary

• Geothermal maintains the lead in generation accounting for 49.2 per cent in November up from 48.5 per cent in October, while hydro generation increased from 37.4 per cent to 37.6 per cent during the period.
• Last week, Kenya Electricity Generating Company (KenGen), which operates most of the country’s hydro plants said that all dams within the Seven Forks have hit spilling levels, enabling the generating company produce power at optimum levels.

By IMMACULATE KARAMBU
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The Energy Regulatory Commission (ERC) is optimistic of reduced fuel charges following a drop in electricity production using fuel-driven thermal sources.

ERC Deputy Director for Electricity Tom Simiyu said that the use of hydro, as opposed to commonly used fuel, will cut the amount of the fuel cost surcharge included in the monthly bills.

According to recent data, electricity generation from fuel-driven thermal sources reduced to 10.4 per cent of the total power production in November.

“The reduced thermal generation comes with the benefit of reduced fuel cost charge, which is a significant component in the electricity bills, hence reducing the price of electricity,” said ERC deputy director for electricity, Tom Simiyu.

ERC expects a further drop in thermal generation due to displacement by hydro plants, which are expected to run at a higher capacity following the heavy rains that have filled dams.

Last week, Kenya Electricity Generating Company (KenGen), which operates most of the country’s hydro plants, said that all dams within the Seven Forks have hit spilling levels, enabling the company produce power at optimum levels.

“Hydro generation is the cheapest mode of generation and therefore any increase in its uptake will displace an equivalent amount of other sources from the system. This can only result in stability and predictability in the price of electricity to consumers,” said KenGen’s Managing Director Albert Mugo.

The fuel cost charge, which depends on the cost of diesel that was used to generate electricity during a specified period of time, dropped marginally in November to Sh2.51 per unit from Sh2.56 applicable for October bills.

In October, thermal generation accounted for 11.3 per cent of the total electricity produced during the month.

Additionally. geothermal maintains the lead in generation accounting for 49.2 per cent in November up from 48.5 per cent in October, while hydro generation increased from 37.4 per cent to 37.6 per cent, during the same period.

At the same time, the foreign exchange adjustment levy, another variable component of the monthly bill, fell to Sh1.06 per unit in November from Sh1.99 in October, owing to strengthening of the shilling against the dollar.

The changes resulted into a cut in the electricity bills by an amount last seen in November 2014 when geothermal overtook hydro as the country’s main source of power.