Electric vehicle (EV) charging stations will get a preferential power tariff of Sh17 per kWh in a proposal by Kenya Power as the utility positions itself to cash in on the growth.
The tariff has been included in the tariff review application made by the utility to the Energy and Petroleum Regulatory Authority (Epra). If approved, this will enable them to charge customers less.
The rate of Sh17/kWh for EVs charging is less than the Sh21.68 per unit that domestic customers who use more than 30 units monthly will pay and the Sh21.08/kWh that small commercial consumers will be billed.
“The tariff proposes the introduction of a special e-mobility tariff to influence demand and growth of e-mobility,” said Kenya Power.
Should the tariff be approved by Epra, Kenya will join a growing list of countries, mostly developed countries, that have rolled out preferential tariffs to boost the uptake of EVs to cut emissions.
Such tariffs offer firms operating EV charging stations preferential rates, which has in these jurisdictions significantly helped to stimulate investment in e-mobility.
Kenya has already rolled out preferential time-of-use tariffs for manufacturers to shift their production to night time. The manufacturers get cheaper power during this period once they have reached a certain consumption threshold.
Kenya Power is experiencing a slower-than-expected growth in electricity consumption, which is hurting its efforts to increase its revenues amid rising costs.
The company is aiming to increase power consumption by rolling out preferential tariffs targeting different groups that have the potential to consume large volumes of electricity.
The utility has previously estimated that an average minibus operating in Nairobi would use electricity of about Sh2,400 each day and that it can charge 50,000 buses and two million motorcycles each day.
The EV market in Kenya is growing as more investors express interest in the market segment.
For instance, the majority State-owned KenGen recently unveiled four EVs – including two SUVs and two double-cabin pick-ups – to primarily be used for data collection and policy development.
The company said it would use the cost and environmental data from the four vehicles to transition its fleet.
The Nairobi Securities Exchange listed firm has two EV charging stations in Nairobi and Naivasha and plans to roll out about 30 EV charging stations in major cities across the country.
Further, local e-mobility startup BasiGo this week announced it had partnered with the Associated Vehicle Assemblers Ltd to assemble its buses in Mombasa. The firms project to make over 1,000 electric buses in the next three years.