Diesel billions running KPLC off-grid power units

Kenya Power offices on Aga Khan Walk, Nairobi. A disclosure by the KPLC revealed that it requires an estimated 2.22 million litres of diesel to run its 30 off-grid power stations a month, or 26.64 million litres a year.

Photo credit: File | Nation Media Group

A petroleum tender has hinted at the cost of running off-grid power stations by the Kenya Power Company across the country even as oil marketers lined up for the supply contracts.

A disclosure by the Kenya Power revealed that it requires an estimated 2.22 million litres of diesel to run its 30 off-grid power stations a month, or 26.64 million litres a year.

This means it costs about Sh4.31 billion to power the off-grid power stations annually going by the 26.64 million litres of diesel requested from oil marketers by Kenya Power. The prevailing diesel price in Nairobi has been set at Sh162 for the current price cycle that ends on May 14.

Kenya Power’s operating costs increased from Sh19.1 billion to Sh21.7 billion in the half year to December, with Kenya Power linking it to increased foreign exchange losses arising from the revaluation of outstanding payments to power generators denominated in foreign currencies due to the depreciation of the Kenyan shilling.

This come as oil marketers lined up for contracts to supply the fuel to the KPLC installations. A schedule shows that the utility requires 66,000 litres of diesel to run its off-grid station in Lokichoggio every month, Mandera (400,000), Wajir (400,000), Lodwar (400,000) Marsabit 200,000, Kotulo (10,000) Merti (30,000), Habaswein (60,000) and Kakuma (120,000).

Others are Eldas(20,000), Rhamu (40,000), Takaba (40,000), Elwak (60,000), Mfangano (30,000),Lokori (20,000),Dadaab (60,000), Baragoi(20,000), Moyale (20,000) Kamoliban (10,000),Banisa (20,000), Laisamis(20,000), Kiunga(20,000) and Hulugho(10,000).
KPLC’s off-grid station in North Horr requires 20,000 litres of diesel monthly, Lokitaung (10,000), Faza Island (60,000), Khorondile (10,000), Maikona (10,000) Lokiriama (10,000) and Sololo (20,000).

Kenya Power said in December that it would spend Sh4.31 billion to retrofit 18 of its diesel-powered off-grid stations with solar to lower costs.

The utility’s 30 off-grid power stations were initially developed as thermal plants. Customers pay for this diesel through the fuel cost charge (FCC), which is the single second costliest component of power bills.

Hybrid systems

The hybrid systems enable the displacement of expensive thermal generation with cheaper and cleaner renewable energy, reduction of carbon emissions, and boost power supply reliability, said the utility. The project will be funded by the Agence Française de Développement (AFD).

“Considering the global rise in the cost of fossil fuel and the need to protect the environment, a hybridisation project, which entails retrofitting the plants with solar photovoltaic systems, was initiated by the government,” said Kenya Power.

“Plans are underway to retrofit 18 of the 30 existing diesel-powered off-grid stations at a cost of €33 million with funding from AFD.”
The company said that the remaining 12 plants would be hybridised progressively on additional funding from the government.

Kenya Power is also implementing the Sh20.43 billion ($150 million) World Bank-funded Kenya Off-grid Solar Access Project.
The project targets to install 98 mini-grids and 473 stand-alone systems to enhance electricity access in 14 counties with low grid penetration.

The counties to be covered by the project are Garissa, Isiolo, Kilifi, Kwale, Lamu, Mandera, Marsabit, Narok, Samburu, Taita Taveta, Tana River, Turkana, Wajir, and West Pokot.

Implementation of the project is expected to commence in the current financial year and is earmarked for completion in 2024.