Kenya Power to lose say in where to source energy

New to decide plants that will feed the national grid under new plan meant to ease burden to users.

Kenya Power staff install lights at the Makadara Grounds in Mombasa. PHOTO | KEVIN ODIT | NATION MEDIA GROUP 

In Summary

• ERC on Monday said plans are afoot to set up a national load dispatch centre.
• Ketraco will manage the facility, the regulator said, and will ensure that plants generating cheaper power are dispatched to the grid first.
• Kenya is following in the footsteps of countries such as India and Malaysia, which have national load dispatch centres.

Kenya Power is set to lose the muscle to determine the electricity mix to be sold to consumers under a new plan to establish an independent player to decide which energy plants are to be fed to the national grid.

The Energy Regulatory Commission (ERC) on Monday said plans are afoot to set up a national load dispatch centre, which will be charged with scheduling feeding of electricity to homes and industries starting with the cheapest options such as hydro and geothermal.

The Kenya Electricity Transmission Co Ltd (Ketraco) will manage the facility, the regulator said, and will ensure that plants generating cheaper power are dispatched to the grid first and other costly options brought on-stream as demand increases.

“We want an independent system operator who has a helicopter view on power demand and supply and makes decisions on the most optimum and economical mix,” said ERC director-general Joe Ng’ang’a on Monday.

“An independent player will remove any conflict of interest,” said Mr Ng’ang’a in an interview.

Kenya is following in the footsteps of countries such as India and Malaysia, which have national load dispatch centres — a central authority which monitors demand and supplies power to the retailer starting with the least cost source, technically known as economic merit order dispatch.

Kenya’s energy mix includes hydropower as the cheapest source priced at ¢3 per kilowatt-hour followed by Mumias co-generation (¢6 per kWh), geothermal at ¢7 per unit, Biojoule’s biogas (¢10 per kWh), and Strathmore University’s solar power is priced at ¢12 per unit.

Thermal power is priced at ¢20 per kWh while emergency power costs cost nearly double the price of diesel-fired electricity.

This new plan leaves Kenya Power as the electricity retail monopoly — selling to homes and factories from sources determined by the dispatch centre.

Kenya Power Managing Director Ben Chumo was yet to respond to our inquiries by the time of going to press.

Ketraco on Monday floated a tender seeking consultants to carry out a feasibility study on setting up the national load dispatch centre.

Mr Ng’ang’a said the facility will be set up once the Energy Bill, currently before the National Assembly, is passed.

The fresh impetus to set up an electricity dispatch platform comes on the back of Kenya Power’s increasing appetite for expensive thermal power despite the injection of 280 megawatts of cheaper geothermal power from Olkaria.