Kenya injected the first dispatch of cheaper hydropower imported from Ethiopia into the national grid last week, rolling out the plan that is expected to aid a reduction in power bills for businesses and households.
The
25-year deal power import deal with Ethiopia will see Kenya Power take up a
maximum capacity of 200 megawatts in the first three years, rising to 400MW for
the remaining period.
Daniel
Kiptoo, director general of the Energy and Petroleum Regulatory Authority
(Epra), said that Kenya Power used 75 megawatts on Thursday, with more capacity
being added when the import plan was formally launched.
Kenya
is paying 6.50 US cents per kilowatt hour for Ethiopian power, which is much
less than what Independent Power Producers charge.
According
to The East African, the lower tariff is anticipated to increase Kenya Power's
capacity to provide customers with cheaper retail pricing.
"When
we went live on Thursday, 75 megawatts were coming from Ethiopia and going via
Suswa. The commissioning process is still ongoing, Mr. Kiptoo said on Friday.
The
cost of Ethiopian hydropower is marginally more than the average cost of
Ksh5.30 ($0.043) per kilowatt-hour offered by Kenya Electricity Generating
Company (KenGen) from its seven major dams.
However,
the two are considerably less expensive than thermal power from IPPs, which can
cost as much as Ksh195 ($1.60) per kilowatt-hour.
Kenya
Power will seek a review of the Ethiopia power charge in 2027, in line with the
contract’s terms, offering it an opportunity to further lower the costs and
bring them closer to KenGen’s tariff.
The
room to renegotiate lower tariffs is key to proving cheaper electricity, easing
pressure on homes, offering investors attractive rates in a bid to make local
products more competitive and retaining big businesses that are increasingly
exploring ways to generate their power.
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