Kenya is staring at a major crisis in the electricity sub sector following a prolonged dry spell that might see some power generation dams shut down because of inadequate water, scaling up of costly thermal plant and a possible return of power rationing should the long rains fall.
The country is already shifting to the use of the diesel fired power plants and this is already weighing down power consumers, with the fuel cost charge component in the power bills on the rise. The fuel charge has gone up to Sh2.85 in December. The Energy Ministry expects this to get to Sh3 in the next review, which is published every month by the Energy Regulatory Commission (ERC).
Hydro electricity ordinarily accounts for about 45 per cent of the electricity produced and consumed in the country. This has however come down to 35 per cent. According to the Ministry, this could come down to 28 per cent should the long rains that are expected to start March fail to be adequate, which could portend a major crisis for the country.
Water levels at the Masinga Dam – which is the main reservoir for the Seven Folks hydro electricity system – is currently at 1 048 metres above sea level. This is a major decline compared to 1056 metres mid 2016.
Charles Keter, the Cabinet Secretary Ministry of Energy and Petroleum, said should the levels get to 1 037 metres, then the dam would have to be shut down. Keter ruled out the possibility of rationing electricity, at least in the coming few months. This is however dependent on the commencement of rains in March.
“By March, production of electricity using hydros may come down to 28 per cent from the current 35 per cent. If it (dry weather) persists beyond March, then we will have problems,” he said.
According to Keter, the Sh3 fuel charge on the monthly electricity bills could go up to Sh3.52 in what he said would be a worst case scenario. He however downplayed its impact on what consumers will be paying, noting it will increase the bill by about three per cent.
“We have been reducing the use of thermal power plants. We have however started using them, and they are accounting for 18 per cent of the power being consumed in the country. This could go up to 24 per cent in the coming months,” he said.
While Keter said it is unlikely that players in the electricity subsector will resort to rationing power to enable the country cope with reduced production and high costs, it is still a possibility even if remote one. This is especially if the dry weather persists.
The country in 2009 experienced a mild form of rationing that nevertheless had devastating impact especially for heavy power consumers such as manufacturers who were forced to turn on generators, which are costly and pushed up their operating costs.
A worse rationing was experienced in the 1999, where industry players were forced to come up with shifts that corresponded with the timings when the electricity was on, mostly during the night. In addition, to use generators during the day, this also meant that companies had to incur an extra cost for their employees logistics as well as amenities at work during the odd hours.
KenGen, which has accounts for over 80 per cent of power produced in the country, said the current situation is expected to improve with commencement of long rains from mid-March this year to normalise in May 2017 when the hydro electricity production will have peaked.
The Nairobi Securities Exchange listed power producers noted that even with the surge in prices, the current fuel cost charge is still lower compared to what had been in place in the past. The charge had reached Sh9 in 2011, when there was a heavy reliance on the diesel fired generators.