Homes and businesses used the highest units of cheaper geothermal electricity in Kenya’s history after the energy regulator warned Kenya Power to cut reliance on expensive diesel generators, lowering consumer bills.
Data from the Energy Regulatory Commission (ERC) shows that consumers used 402.1 million units (kilowatt hours) of geothermal power in October, the highest level ever, accounting for 49 per cent of total units consumed.
This is up from 377.5 million units in August and 388 million units in January—just a month after Kenya completed the injection of additional 280 megawatts of geothermal power to the national grid.
“This is the highest level of geothermal power ever generated and consumed,” said John Mutua, ERC senior manager in charge of economic regulation.
Dr Mutua said the Kenya Electricity Generating Company (KenGen) has in the past two months commissioned several geothermal wellheads – smaller power producing plants that enable early tapping of electricity while awaiting the construction of big geothermal plants.
This has led to the increase in geothermal power produced by KenGen and evacuated by Kenya Power to consumers, translating to lower bills.
The fuel levy, linked to the amount of power from diesel-run generators and supplied to the national grid, has dropped to Sh2.51 per unit for November’s power bills from S.11 in August when bills shot up.
The ERC data shows the costlier thermal power consumed dropped to 101 million units last month from 111 million units in August and 109.1 million units at the beginning of the year. This has seen its share drop to 12 per cent from 13.6 per cent in August and a high of 18.6 per cent the previous month.
The ERC in August faulted the heavy uptake of thermal electricity and directed Kenya Power to revert to a mix that would stop the cost surge.
The energy regulator uses Kenya Power’s data from the previous month to guide its next review of fuel cost levy — which takes up the largest share of monthly variable costs in power bills — inflation charge and forex adjustments.
But the ERC data shows hydropower, the country’s cheapest energy source, dropped to 310 million units in October compared to 318 million units in August.
The ongoing rains are however, expected to boost the share of hydropower, according to Dr Mutua.
Kenya is racing to increase its output of renewable and cheaper electricity from a mix of geothermal, wind and solar sources to support growth of industries and light more homes.
The injection of the 280 MW cheaper geothermal power to the grid saw the ERC pledge in April to maintain the fuel levy at between Sh2 and S per unit to stabilise electricity prices for domestic consumers and enable manufacturers to monitor their cost of production. But the levy rose in August, prompting the ERC to raise concern.
In defence, Kenya Power managing director Ben Chumo had argued that a temporary shut-down of various geothermal units was partly to blame for the increased fuel levy.
SOURCE: BUSINESS DAILY