Engage us for cheap power, says KenGen

Tuesday, March 21st, 2023 03:20 | By
KenGen Company. PHOTO/Print
KenGen Company. PHOTO/Print

The cost of electricity can drop significantly if KenGen can sell exclusively to Kenya Power.

This emerged as the Senate Energy Committee began an inquest into the high cost of electricity that has been blamed for the high cost of living.

KenGen’s acting managing director Abraham Serem told the committee chaired by Nyeri MP Wahome Wamatinga exclusive use of power from the them would lower the cost of electricity.

“If KPLC decides to buy everything from us, then, absolutely, the cost of electricity will go down,” said Serem.

Independent producers

However, he charged that Kenya Power is currently engaged in active contracts with other Independent Power Producers (IPPs).

Serem disclosed that KenGen has signed 14 power purchase agreements with Kenya Power, with some contracts expiring as late as 2044.

At the moment, Kenya power procures the balance of electricity from independent power producers that have been selling their commodity at exorbitant prices thus the high cost of electricity.

This even as he disclosed that the KPLC owes KenGen Sh28.23billion, an amount that has affected the running of the firm.

Currently, KenGen supplies up-to 65 per cent of the electricity distributed by the Kenya Power. The IPPs are said to sell their power at a cost of Sh26 per kilowatt yet KenGen the largest power producer, is selling theirs at Sh5 per kilowatts.

High taxation and the deepening Kenyan shilling against the dollar have also been blamed for the ballooning cost of the electricity.

Some IPPs are said to have signed power purchase agreements with KPLC foreign currencies, especially dollars thus tying down the power producer to pay more with the depreciating shilling against the dollar.

The government, through the Treasury, hold 70 per cent of shareholding at KenGen.

According to Serem, the country’s current power demand stands at about 2146 megawatts. “This is the current demand but if everybody is connected, then the demand will be higher,” the MD said.

The committee put KenGen on the spot over the Sh79.42billion loan taken from a Chinese bank for drilling of wells that are yet to be connected to the power plants.

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