Sluggish demand derails 5,000MW electricity plan

Lack of demand from large electricity customers has forced the government to ease up on an ambitious power upgrade plan.

The plan aimed to increase the country’s installed electricity generating capacity to 5,000 megawatts but the government has stalled the project to avoid racking up expensive loans.

Energy and Petroleum Cabinet Secretary Charles Keter says the plan is to engage manufacturers to scale up production in an effort of making the country an industrialized country, presenting the case to increase electricity production.

“You can get up to 10,000MW, but if we are only doing 1,600MW then it becomes very expensive because for most of these projects we take loans. What we are doing is to monitor the demand,” Mr Keter said.

Kenya has an installed capacity of 2,294 megawatts with a peak demand of 1,600 megawatts.

The government has widened the country’s generation mix from hydropower to geothermal, wind, solar, coal, natural and nuclear to meet increasing demand.

The injection of 140MW of geothermal energy in 2015 is credited with the slight reduction in electricity costs with the government offsetting use of thermal production.

By the end of 2016, the cost of electricity had declined to Sh2.31 per unit from Sh7.22 in August 2014 due to increased geothermal power output.

Mr Keter said funds will be channeled towards increasing demand as well as stabilizing transmission to eradicate power outages.

“That is one element that is making the cost of power high. Whether you have demand or not you have to run the machines but that is being addressed,” he said.

Besides the current generation mix, the government plans to produce 1,000MW from nuclear energy although progress on the project has been slow.

Amu power, a consortium between Centum Investments and Gulf Energy, is also in the process of developing a 981MW coal fired power plant in Lamu.