Despite the government has ruled out load shedding, but the use of electricity generated from plants that use expensive diesel and fuel oil sets the stage for higher bills.
Back in the late 1990s, Kenya started diversifying power sources to reduce dependence on hydroelectricity. The Kenya Association of Manufacturers (KAM) said prolonged use of thermal power and decline of hydro output has the potential of disrupting economic growth.
Hydro now accounts for 37.1% of electricity being used. According to the Ministry of Energy, the fuel cost levy will rise as the current drought has affected the output of hydro plants like the Seven Forks Dam on Tana River, Sondu-Miriu in western Kenya, and Turkwel Gorge in the northwestern part of the country. Energy Cabinet Secretary Charles Keter had this to say, “We have scaled down generating electricity from hydro plants.
Before, they accounted for 39 per cent of the power generated, but this has dropped to 37.1%.” Cost of electricity up However, consumers are expected to pay more for power before the onset of the long rains expected between March and May. The fuel levy cost will increase this month to Ksh3.52 ($0.035) per kilowatt hour (kWh) from Ksh2.85 ($0.028) in December.
In November it was Ksh2.34 ($0.023). Kenya has an installed generation capacity of 2,341MW. Domestic consumers using up to 50kwh, paying Ksh2.50 ($0.02) per unit, will not be subject to the extra fuel cost levy.
Households using 51 to 1,500 kWh will pay Ksh11.62 ($ 0.11) per unit. Companies that are paid the fuel cost levy include Kenya Electricity Generating Company (KenGen), Rabai Power Ltd, Iberafrica Power, Thika Power Ltd, Triumph Power Generating Co. Ltd, Tsavo Power Company Ltd and Gulf Power Ltd. The levy is to offset the cost of diesel and fuel oil used for generation. Kenya’s cheapest source of power is hydro at Ksh3 ($0.03) per unit, but it is affected by erratic weather.
This is followed by geothermal power at Ksh 7 ($0.07) and thermal at Ksh20 (0.19). The Energy Regulatory Commission (ERC) adjusts the fuel levy monthly with forex levy attributable to the dollar exchange rate.