Electricity consumption hits record high on lower costs
Electricity consumption hit a historic high in March as households, small businesses, and large manufacturers began to enjoy a state-driven 15 percent reduction in the cost of power on the back of a post-Covid-19 economic recovery.
The country recorded strong growth in the first three quarters of 2021 as economic activities picked up following the easing of Covid-19 restrictions and the reopening of the economy.
National Treasury data shows that the economy grew by two percent in the first quarter, further accelerating by 11.9 percent in the second quarter and 9.9 percent in the third quarter. This growth coincided with the resumption of economic activities that pushed up power consumption.
Data by the Energy and Petroleum Regulatory Authority (Epra) shows consumers used 1.091 billion units of electricity last month, the highest ever, topping the previous record of 1.043 billion units last August.
“Total units generated and purchased including hydros, excluding exports in March 2022 [was] 1.091 million kilowatt-hours,” Epra Director-General Daniel Kiptoo said in a gazette notice.
Electricity consumption
Electricity consumption has been growing year-on-year driven by the increased connection of households and institutions such as schools and hospitals to the national grid as well as growth in the number of energy-intensive manufacturers setting up shop in the country.
State-owned electricity distributor Kenya Power has rolled out an aggressive drive to connect new customers to the grid to grow its sales, a move that saw it add 716,206 new customers in the year to June last year following the addition of 500,397 in the previous year.
The strategy has seen the number of households connected to power grow to 8.27 million last June from just 2.26 million in March 2013 when President Uhuru Kenyatta was elected into office, taking electricity access to about 75 percent.
However, the largest contributors to the record power use are large manufacturers, who consume the most electricity with the higher consumption signalling economic recovery that has seen them scale production as well as new players setting up shop in the country.
8.55 billion units
Of the 8.55 billion units of electricity sold by Kenya Power in the 2020/2021 financial year, households purchased just 2.6 billion (30 percent), with the rest used by small businesses and large industries.
The high cost of electricity has hampered its use by both households and businesses which has seen an accelerated uptake of cheaper alternative energy sources especially solar as users seek to lower their monthly energy costs.
However, the government has in recent months embarked on a drive to lower the cost of electricity for households and make the manufacturing sector more attractive to investors.
Consumers breathed a sigh of relief after Epra in February significantly lowered power tariffs for the first time in three years by about 15 percent on all user categories following an intervention by President Kenyatta.
Epra reduced the energy charge for domestic lifeline consumers of less than 100 units monthly by Sh2.3 per unit to Sh7.7 down from the previous charge of Sh10 that had been in use since November 2018.
At the same time, Epra reduced the energy charge for commercial and industrial consumers of over 15,000 units monthly to Sh8.7 per unit during normal hours down from Sh12 per kilowatt hour.
The government promised a further 15 percent reduction in power costs by the end of March through the renegotiation of power purchase agreements between Kenya Power and independent power producers (IPPs).
However, the pledge is yet to be actualised as the government is yet to bring IPPs to the negotiating table to enable the second phase of power reduction. Epra on Friday retained electricity prices for the fifth month in a row, with the fuel cost charge set at Sh4.63 per unit of electricity as well as the foreign exchange fluctuation adjustment rate at 73 cents per unit.
The components are adjusted monthly to cater for changes in the cost of fuel, which is used to generate thermal electricity, and changes in the value of the Kenyan shilling against major world currencies.
“But the process took longer than was expected due to permit processes. The staff will be moving to the house soon as the processes have been concluded.”
Mr Kabira said the second staff house had deteriorated over the years due to lack of adequate maintenance funds. BY DAILY NATION
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