Plans to revive power purchase deals on the cards after nationwide outage

By Steve UMIDHA

Kenya’s energy ministry will consider lifting the existing moratorium on power purchase agreements (PPA) as an urgent move to arrest frequent power failures in the country.

Friday’s hashtag #KPLC has been trending on Twitter and other social media outlets as Kenyans share memes and gifs about the country’s worst and never-ending national blackout in as many years.

While some tried to find some light-hearted moments in the midst of darkness, others fumed at the inefficiency of the state-run Kenya Power Lighting Company or Kenya Power Plc.

It was the third nationwide blackout in a week and raised questions over KPLC’s ability to provide a stable power supply.

In a statement, the firm’s parent ministry said four pylons supporting the power line, which connects several regions including the country’s capital, Nairobi, to a transmission line in Loiyangalani, collapsed, resulting in cascade failure and partial collapse of the grid.

This, the ministry said, had affected most regions of the country except parts of Western Kenya, which was supported by supply through the interconnector to Tororo, Uganda.

“The 220kV High Voltage Loiyangalani transmission line tripped at Suswa substation while evacuating 288MW from Lake Turkana Wind Power (LTWP) plant.

This was followed by a trip on the Ethiopia – Kenya 500kV DC interconnector that was then carrying 200MW, resulting to a total loss of 488MW. The total demand in the system at the time was 1790 MW.

The loss of 488MW, accounting for 27.3% of the total generation, resulted in cascade failure and partial collapse of the grid,” Energy CS Opiyo Wandayi noted in a statement.

It is an experience that has invigorated the long-drawn debate on whether the country’s sole power distributor, Kenya Power can now be sanctioned to sign power deals with autonomous producers, years after the previous Cabinet lifted a ban on the validation of such contracts after Parliament vetoed it.

The moratorium had been imposed in 2021 by the former regime and it has been accused of slowing down the development of power projects, as well as made it impossible to open up the energy sector.

A review of that decision is expected to address key critical issues, most of which are expected to see a return to cheaper power tariffs to consumers and final end-users.

“In the meantime, we are fast-tracking pursuing the lifting of the moratorium on PPA by the National Assembly as well as implementation of base load (hydro, geothermal) generation projects to improve energy security and provide adequate spinning reserves,” promised Wandayi.

Other strategies include enhancing grid flexibility and resilience by completing pending projects namely; Turkwell-Ortum-Kitale (Turkwell – Ortum section is already energized), SonduNdhiwa, Nanyuki-Isiolo, Narok – Bomet, Mariakani substation, as well as repair the Loiyangalani – Suswa Transmission line for double circuit operation and migration from 220kV to 400kV operation.

It will also see a completion of ground electrode for HVDC for bipolar operation, Lessos substation and installation of STATCOM for voltage regulation at Suswa and Rabai

Similarly, the ministry pledges to construct an alternative evacuation line, Gilgil-Thika-Malaa-Konza 400kV to complete the Nairobi Ring to decongest Suswa Complex, RongaiKeringet-Chemosit to decongest Kisumu-Muhoroni-Chemosit, MenengaiOlkalao-Rumuruti to provide access to Mount Kenya region to geothermal power.

High Power demand

Kenya’s demand for power has been on the rise as the economy recovers from the effects of the COVID 19 pandemic while many developers scaled down operations during the moratorium or were forced to abandon their projects.

That said, developing power projects is a difficult and lengthy task and the balance between demand growth and the time it takes to develop and onboard new projects has been upset.

The Government will have to accelerate the development of new generation capacity to ensure that economic growth does not suffer due to the undersupply of electricity. However, it remains to be seen whether developers will be willing to engage with the Government and do what they can to fast-track projects.

Lobbies’ plea

In July 2023, the Central Organisation of Trade Unions asked the government to revoke all Power Purchase Agreements with IPPs and negotiate better terms.

Appearing before the Energy Committee of the National Assembly, Cotu secretary general Francis Atwoli said IPPs have to be tamed to address the high cost of electricity.

He argued that the cost of power that IPPs agree with the government has been, in most cases, higher than the cost of electricity produced by state-owned firms like KenGen.

And in April of the same year, two Independent Power Producers blamed the soaring prices of Heavy Fuel Oil for the high cost of power in the country.

Thika Power Limited and Iberafrica Power told the Senate Energy Committee at the time that thermal IPPs are not the reason behind the high cost of electricity as “people may want to believe.”

George Njenga, a director at the two firms, named drought and weakening shilling as other factors contributing to high electricity costs.

Unconfirmed investigations have also shown that 70 per cent of power last year came from KenGen while IPPs accounted for 30 per cent of electricity produced. Seventy (70) per cent of the total amount paid by Kenya Power went to IPPs while KenGen only got 30 per cent of the cash.

A presidential task force attributed the expensive electricity partly to costly Power Purchase Agreements (PPAs) that Kenya Power inked with IPPs.

The cost of electricity has been at an all-time high affecting the cost of living and doing business.

The presidential task force investigated the reasons for the high costs of electricity and concluded that Kenya Power’s involvement in expensive and uncompetitive power purchase deals with IPPs was the main cause.

According to Kenya Private Sector Alliance, the cost of electricity has risen by over 70 per cent in the last decade, a scenario that has eroded Kenya’s competitiveness.