Kenya Power faces dark future as income streams reduce
Unilever Tea Kenya Company has announced plans to generate and distribute its own electrical energy, for internal use, becoming the latest mega company to delink itself from the national grid to cut electricity bills.
Unilever Tea Kenya Ltd, a subsidiary of Unilever, an Anglo-Dutch conglomerate, is involved in the production of tea, mainly for export.
The company’s managing director Kenneth Odire said the electrical power will be generated, transmitted and distributed from existing power stations to be upgraded at Kimugu and Jamji Power stations.
Power produced, he added, will serve the company’s installations within its estates in West Kenya areas within Kericho and Bomet counties.
“Unilever Tea Kenya Plc intends to apply for a license for the generation, transmission and distribution of electrical energy for use within its estates in the West Kenya area that encompass Kericho and Bomet Counties,” Odire said in a statement.
This application for the license will be made on February 8, 2022,” he said adding: “Any person wishing to inspect the application may do so at the offices of Unilever Tea Kenya Plc located along the main Kericho–Nakuru Road near Brooke Market in Kericho County.”
Unilever Tea’s move comes hot on the heels of a growing shift by heavy consuming manufacturers towards renewable energy as they seek reliable and cheaper supply of energy, a situation that leaves the future of Kenya Power in a balance as far as its customer base is concerned.
Total Kenya in 2020 announced that it had introduced solar power in 100 petrol stations, noting that it was steadily shifting all service stations to green energy. National grid Prompted by high cost of power, last year, giant Alcohol manufacturer, East Africa Breweries Ltd (EABL) signalled plans to exit from the national grid to focus on its own power generation through solar energy.
Kenya Power had already expressed concerns that some of its industrial customers who account for about 68.31 per cent of its sales revenues are gradually shifting to own-generated solar power, dealing a further blow to its already dwindling finances.
Economist Odhiambo Ramogi, said Kenya Power may need to rethink its delivery strategies that offer customer value for money and if need be, the agency needs a complete management overhaul to salvage its market status.
“If those who contribute a lot of revenue to KPLC have started pulling out from the grid, then it means that it is losing its monopoly grip, and this may call for quick interventions including a complete overhaul of its management to save it from collapsing,” said Ramogi.
Other factors like possible corruption, orchestrated by inflation of contracts may be finding its way in the power provider thus affecting revenue flows. Also, indirect competition from other sources like renewable energy, he added, will force Kenya Power to rethink its pricing strategy