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The daunting task of implementing recommendations by the Presidential Taskforce on review of PPAs.

In 2009, several development projects were crippled after an electricity rationing program was effected by Kenya Power. This resulted from a load shedding exercise by the utility. It involved deliberately shutting down electric power in the distribution grid, to prevent the failure of the entire system because demand strained the supply of power. Engaging engineers to conduct a shutdown, further strained the utility financially. Not only was it an expensive affair but also denied Kenya Power a revenue generating stream.

Moving into 2010, thermal power plants were commissioned to increase power supply. The utility saw this as an opportunity to cut its operational expenses by half. Independent Power Producers operating thermal power plants moved in quickly to acquire used generators from the old Ship Industry while others opted to import dissembled parts that would then be assembled on site making it a daunting and expensive construction task. Evidently, a decade ago, the Kenyan Energy sector was very young as compared to the United States where renewable energy had been the fastest-growing energy source since the year 2000.

Thermal plants, majority still in operation today, make electricity cost very expensive. Power Purchase Agreements between Kenya Power and thermal plant IPPs bear three tariffs that must be consolidated to arrive to the total cost of electricity per unit sold to Kenya Power. The tariffs include a Fuel tariff, a Capacity tariff and an Energy tariff. Whenever cost of HFO (Heavy Fuel Oil), that runs the thermal generators, increases, the fuel tariff also increases rendering high electricity cost that is eventually bourne by the consumers. Thermals plants equally have high operational costs as compared to other renewable energy power plants.

Moving into 2012, the Feed in Tariff (FiT) policy was hence revised to accommodate more diverse sources ,thereby connecting more renewable energy plants to the grid.

A Feed-in-Tariff allows power producers to sell renewable energy generated electricity to Kenya power at a pre-determined tariff for a given period of time.

A renewable energy mix comprising of wind, solar, hydro, geothermal and biomass power plants have since 2013 been connected to the national grid under the FiT standardized PPA framework.

However, this has not been without a downside. For instance, the connection of huge capacity wind power plant to the grid in 2019 majorly caused issues with grid voltage variations and compromised power quality.

It has now emerged technically beneficial to accord mini-hydros and small biomass power plants, priority in the planting sequence during energy planning. These power plants are tied to the tail-end of the grid system and help to stabilize Grid Voltages.

Arguments have also arisen of looming oversupply of power overwhelming the utility plunging it into losses. Is there really an oversupply of power in the country? or are the utility losses as a result of choking terms within existing Power Purchase Agreements with IPPs? Some argue the current state of supply is misconstrued for political reasons and power play within the sect. Others tend to hope you would technically understand to what must be referred to as ‘SUPPLY SECURITY’. It is the understanding by energy stakeholders that an energy system, aims to ensure that consumers have access to the energy that they require whenever they need it, without imposing energy consumption capping to consumers, hence the need to have a surplus security to tap into for development. More so for a developing country like Kenya.

Such cases led to the formation of the Presidential Taskforce on Review of Power Purchase Agreement and the imposition of a 6 months moratorium as from 27th March 2021.

With the conclusion of the mandate of the Taskforce on 29th September 2021, and as per its recommendations, KPLC has been mandated to take the lead in formulation and related PPA procurement of the Least Cost Power Development Plan (LCPDP). It is worth noting that the The LCPDP Committee under EPRA’s Economic and Planning Department previously took the lead in energy planning.

Other recent changes in the energy sector announced by the President on 29th September are construed to be as a result of the taskforce findings. The Taskforce in their report notes that its key findings were the existing lack of proper demand forecasting and planning, leading to irreconcilable projections as against demand a fundamental element of the LCPDP.

Another of the taskforce reccomendations was for Kenya Power to restructure itself into a commercial entity that is both profitable and capable of delivering efficient, cost-effective electricity,

For Kenya Power to achieve this, its energy planners ought to enact proposals to commission wind and solar power plants under the auctions policy to encourage competition among renewable energy companies. Procuring power from the lowest biding company would bring down the cost of electricity to the consumer.

Notably, the utility ought to also consider prioritizing mini-hydros and small biomass plants in the planting sequence of the reccomended one and five-year rolling demand and generation forecasts and associated models. This would also see the cost of electricity to the consumer go further down from the targeted 33% in reduced electricity cost by December 2021.

 As part of government agenda to provide energy security especially in Western Kenya where currently demand exceeds supply, renewable energy projects especially mini-hydros should be implemented to provide the region with cheap and reliable power, as base load power and render system voltage stability.

Over the next 3 months, the daunting task of the newly appointed Energy CS Monica Juma and her counterpart PS Gordon Kihalangwa, will be to interprete and implement, alongside Kenya Power and other stakeholders within the ministry, the taskforce's consolidated report and it's framework along such plans of actions highlighted above.

Finally, it remains the hope of many Kenyans, households and industries, that such actions, when wisely instituted, will lead to a reduction in electricity costs come December 24th 2021.

Content created and supplied by: Engineer_Munyiri (via Opera News )


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