HomeRegional NewsEast AfricaOp-ed: What portends for grid-connector Kenya Power?

Op-ed: What portends for grid-connector Kenya Power?

In Kenya, the latest debate is around the feasibility of transitioning to rooftop solar and completely retiring grid-connected electricity.

This discussion follows local media’s focus on reports following neoteric shifts by some grid-connected power customer to off-grid electricity solutions commonly referred to as the solar PV market in Kenya.

As per UNEP’s Solar and Wind Energy Resource Assessment (SWERA), Kenya has the potential of receiving approximately 6.5 sunshine hours in a day throughout the year. This irradiance rating makes the solar market attractive.

However, more predominant is the trajectory of the so-called non-convectional renewable energy, which is of significant interest to market developers. For instance, in 2016 solar and wind particularly in such economies as Australia, US, China and the UAE for the first time registered grid-parity.

This means that the solar and wind resource was able to record cost equal to those offered by traditional power sources, mainly fossils fuels as is indicative of the International Renewable Energy Agency (IRENA) 2017 Status Report.

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Further in 2019, more than half of the total installed solar and wind energy registered the lower cost than the cheapest coal power plant globally. To put this into perspective, for the longest time coal has dominated electricity generation industry as one of the least-cost power sources.

Currently it is a hundred times cheaper to obtain power from solar and wind technology than it was two decades ago. This affordability is thanks to technological advancements that have improved the solar and wind components’ performance.

To illustrate this, in the opinion of IRENA’s 2020 report, with a rooftop solar PV installation, the price per kilowatt hour is in the region of 9 ksh with an addition of 5 ksh kW/h for battery storage technology cumulatively giving rise to total price of 14 ksh KW/h. This price does not include the initial installation cost.

This then reflects a much cheaper price than the average 23 ksh KW/h Kenyans pay for the grid-connected electricity.

However, a surprising feature of the rooftop solar markets is that while on average the cost has been decreasing expeditiously, various studies indicate considerable heterogeneity in the cost of installed solar systems both across and within markets, which is attributable to a number of things ranging from installation experience, market share, incentives level, and market competition.

Nevertheless, the general agreement is that renewable energy resources are now a compelling alternative and will play a significant role in the energy transition. There also exists an ever-promising outlook for this latent resource.

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Recently globally renowned entrepreneurs, through a collective philanthropic endeavour, have invested heavily in “patient capital” for innovative storage technology for solar and wind on a grid-scale.

Should a breakthrough be realised from this innovation, it would usher in a completely different paradigm shift and revolutionise the world.

Conversely, the future of Kenya Power as the grid connector remains an urgent question if it is to continue operating as a commercially viable entity. As the shift to rooftop solar continues to grow by a segment of customers who can afford the investment, along with the intent by generating company KenGen to supply directly to a segment of customers, and the global trends evident in the renewable energy sector – the future of Kenya Power is uncertain.

However, not all is lost for the utility’s monopoly as a number of things – if addressed – can help redeem the financially challenged entity.

In response to the current challenges, government must make urgent intervention in the electricity market by primarily propagating and enforcing prudent administrative and managerial procedures in the utility company’s operations.

Fundamentally, there is an urgent need to address grid-related infrastructural challenges. Kenya prides herself as having the highest electricity access rates in the region, which comes along with some inherent challenges.

To understand the challenges, note that by the end of the Kibaki administration in 2013 Kenya Power’s domestic customer growth had increased to 2.3 million from 600 thousand that has existed previously.

Today that figured has escalated to 7.2 million – indicating registered growth of more than threefold; yet the grid infrastructural system remains unchanged.

This explains why increased system losses of up to 19% have escalated lately. By investing in the expansion of the distribution network as well as embracing smart-grid solutions, can avert the challenges associated with transmission losses.

In any system, when you increase growth and do not create the capacity to match that growth, that undeniably creates a challenge.     

By Njoroge Thuo Daniel, an independent Energy Economist in Kenya

Guest Contributor
The views expressed in this article by the author are not necessarily those of the publishers and/or association partners. While every effort is made to ensure accuracy, the publisher and editors cannot be held responsible for any inaccurate information supplied and/or published.