What you need to know:
- The Ministry of Energy made several assumptions when planning on our energy requirements, and many of them have not materialised.
- Something is terribly wrong inside Kenya Power and the energy sector in general.
Kenya is far too large a geographical area, with a fast-growing population, and with devolution, to continue relying on an inefficient monopoly distributor.
A few years ago, the country did not have enough electricity. The next day, we had excess of it. What went wrong with our planning?
The Jubilee government came up with what now appears to be an overambitious programme to generate additional electricity which was going to be more than the country had generated over the previous 100 years. But that would require another miracle: A huge overnight increase in the number of consumers.
We now find ourselves with excess electricity and it is proving to be a big drain on the economy. Kenya Power and Lighting Company (KPLC, or Kenya Power), a distribution monopoly, must buy it all. And it does not have a choice since it has entered into contracts with all suppliers to buy what they produce.
The Ministry of Energy made several assumptions when planning on our energy requirements, and many of them have not materialised. It assumed that the Jubilee manifesto commitments would lead to a sudden, automatic increase of customers, including many new industrial companies.
The SGR, which was to connect Mombasa to the Ugandan border, would be a big customer. But the government inexplicably changed its mind at the last minute and purchased diesel locomotives instead. The other customers would be the many additional individuals.
This was the basis on which KPLC, a company set in Mombasa in 1922, went about signing many power purchase agreements. These are based on guaranteed market. In the event that it does not take all the electricity because of a drop in demand or as a result of other delays, as happened with the Turkana Wind Power project, KPLC must still pay the supplier.
This is happening a lot and KPLC has to pay for power that it does not need and passing the cost on to the consumers, hence the frequent requests for the government to approve higher tariff charges.
In the hurry to meet these political high targets, KPLC went about connecting many consumers, most of whom are too poor to afford electricity, through the Last Mile Connectivity Programme.
Its staff and those of what was then known as Rural Electricity Authority were hurriedly connecting homes and institutions with little economic consideration. This created a fertile ground for cartels to mint billions of shillings with senior managers ending up in court over corruption.
Something is terribly wrong inside Kenya Power and the energy sector in general. Consumers are overbilled with refunds almost impossible; cheap poor-quality transformers continue to break down daily; illegal connections have led to power thefts; delays in repairs are rampant; and inexperienced subcontractors dominate works.
It has become too chaotic for KPLC’s monopoly to continue. If the utility cannot service the 50 million Kenyans, mostly concentrated in a small part of the country, how will it cope with the growing population?
The original KPLC has given birth to KenGen, Ketraco, Geothermal Development Company, Rural Electrification and Renewable Energy Corporation and Energy and Petroleum Regulatory Authority. This unbundling process has grown the sector as one entity would not have handled the expansion.
As was done in the water sector, is it time to create regional or county power companies? How can we really expect KPLC, with all its problems, effectively deliver power to the entire country?
Is it not time northern counties, for example, were served by one regional power distribution company and the same for Coast? Kenya is far too large a geographical area, with a fast-growing population, and with devolution, to continue relying on an inefficient monopoly distributor.
We are paying dearly for the mistakes of our energy planners. How they got it so wrong to the point that we, the consumers, will subsidise KPLC to the tune of Sh6 billion per year is unacceptable. The government must come up with a better coordination mechanism for all these entities — including the private sector players — in the sector.