By Moses Michira
Kenya Power has come under sharp attack from its electricity suppliers
over plans to terminate their
contracts, citing the Covid-19 pandemic.
A group of the suppliers said the utility firm’s decision has nothing to
do with reduced demand for power in the wake of the pandemic as
alleged.
Among the Independent Power Producers (IPPs) that have filed their
complaints with the industry, regulator are Rabai Power, Ibera Africa
and Thika Power.
Plans to pull the plug on the power purchase agreements with the firms
had been in the pipeline for a while on the recommendation of a task
force to review the deals in 2018.
The team had noted in its recommendation to then Energy Cabinet
Secretary Charles Keter that the move would help bring down the cost of
power in the country, as most of the deals were lopsided in favour of
the IPPs.
As of June 2017, there were 12 IPPs in the country, one emergency power
producer and three import firms with 3,029 MW of installed power
capacity.
Kenya Power wants to walk away from the decades-old contracts with the
producers of expensive diesel-generated electricity as part of the
country’s push towards the cleaner and less costly renewable energy.
But the IPPs claim Kenya Power has been reckless in signing up
additional generators without aligning them with demand, resulting in
oversupply.
In a letter to the Energy and Petroleum Regulatory Authority, the IPPs
have complained against the utility firm for invoking the “act of God”
(force majeure) provision in terminating the supply contracts.
“KP (Kenya Power) claims that the measures taken by the government of
Kenya in order to contain the Covid-19 pandemic have reduced national
demand for electricity, which has affected the company’s ability to
utilise available capacity and take delivery of electrical energy,” they
wrote.
Ordinarily, terminating a contract would have huge cost implications in
expenses that the utility firm can ill afford, especially in the present
times when it could be reporting losses.
President Uhuru Kenyatta has also been vocal in the push for the country
to terminate the contracts with the IPPs given the increased
investments in geothermal, solar and wind.
While commissioning the 310 megawatts Lake Turkana Wind Power Project in
July last year, he said consumers had in just eight months saved Sh8
billion by embracing wind power at the expense of the expensive
diesel-generated thermal power.
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