Business

Power generation jumps 5.4 per cent in January on high demand

Kenya Power token metres. (Photo: File)

By Ibrahim Omar | Sunday, February 11, 2024

The country’s more than a dozen power producers generated 1.165 billion units of electricity last month.

Power generation increased by 5.4 percent in January driven by an increase in demand from customers including households, small businesses as well as industrial customers.

According to the Energy and Petroleum Regulatory Authority (EPRA), the country’s more than a dozen power producers generated 1.165 billion units of electricity last month.

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This is a significant increase from 1.105 billion units or kilowatt-hours (kWh) that were generated in December last year.

The increased generation signals that power demand remained elevated during the period, prompting more electricity to be produced to satisfy the demand.

“Total units generated and purchased (G) including hydros, excluding exports in January 2024 was 1,165,321,330kWh,” said Epra Director-General Daniel Kiptoo in a statement on Friday.

KenGen is the largest power producer in Kenya.

The company, which is listed on the Nairobi Securities Exchange (NSE) and is 70 per cent owned by the government, produces nearly three-quarters of the country’s power.

The remainder is generated by Independent Power Producers (IPPs), which utilise various sources including wind, solar, geothermal and hydro to produce electricity which is then fed onto the national grid.

This however comes at a time power prices have remained elevated, which has been a blow to consumers.

Epra last week however handed consumers a slight relief by reducing electricity prices by about 9.3 percent for February. This means that power bills will be lower this month compared to last month.

This came after the energy regulator cut the Fuel Energy Cost (FEC) from Sh4.33 per unit to Sh4.14. It also lowered the foreign exchange rate fluctuation adjustment (Ferfa) from Sh6.46 per unit to Sh3.21.

Price reduction

The agency said the lower prices were put in place because of the lower foreign currency repayments of power purchases made by Kenya Power last month.

The forex losses that the company incurs from repaying power costs in foreign currency are usually recovered from bills in the following month.

“This is due to a significant reduction in the forex adjustment on account of a decrease in the total foreign currency exchange payments made in January 2023,” said Kiptoo.

KenGen also recently told customers to expect power prices to come down. KenGen Managing Director Eng Peter Njenga, in a statement, said that dams in the Seven Forks Scheme have filled to the highest level in recent times.

This has led to a significant increase in the output of hydropower, which is the cheapest source of electricity in Kenya, said the firm.