ENERGIZING INDUSTRIAL GROWTH:
The manufacturing sector has been prioritised as one of the four main pillars of the Big 4 Agenda, which will drive growth of the economy in the next 5 years. As a link to the other three (health, housing and food security) pillars, the sector will heavily rely on quality and reliable electricity supply.
In December, Kenya Power introduced the Time of Use (ToU) tariff, whereby large power consumers get a 50 per cent discount on power used in the off-peak hours of between 10pm and 6am. Under the tariff, large and industrial power users metered at between 450 volts and 11 kilovolts (kV) pay as low as Sh3.55 per unit of electricity consumed. Ordinarily, this cadre of customers pay between Sh9.20 and Sh7.10 per unit, with the heavier users paying lower charges.
Despite business slowdown due to disruptions experienced last year following an unusually protracted electioneering period and biting dry spell, a substantial number of large and industrial power consumers on Kenya Power’s client list have recorded substantial benefits, and the number of firms signing on has been growing.
“We have so far recorded impressive uptake by manufacturers. On average we have about 800 industrial customers benefitting from the tariff in a month. We are upbeat that it will continue rising as more businesses recover from the effects of the long electioneering period,” says Dr. Ken Tarus, CEO, and Kenya Power.
He says that the ToU tariff is part of a number of initiatives that the company has implemented to lower the cost of energy, which is expected to reduce the price of locally produced goods, enhancing their competitiveness in the market. This will in turn attract more investments in manufacturing.
Dr. Tarus explains that KP will achieve this through optimizing the energy mix, and investing in expanding and strengthening of the distribution network through construction of additional substations and lines to avail alternative supply points to large power customers. This move is expected to improve the quality and reliability of power supply, to reduce downtimes caused by planned and unplanned outages and increase productivity.
“We are committed to ensuring that the fuel cost charge is maintained at low levels and retail tariffs remain competitive to create more opportunities that will enable us to work together to make Kenya a manufacturing hub for Africa,” says Dr. Tarus.
The company has also maintained its commitment to partner with the Kenya Association of Manufacturers (KAM) to carry out regular energy audits among manufacturers to maximize production efficiency.
An ongoing customer engagement programme targeting industrial and commercial consumers is geared towards identifying supply challenges and developing a resolution matrix that is tailor-made to address each customer’s concerns.
Under the engagement programme, Kenya Power has been conducting industrial visits and is on the process of establishing regional industry liaison offices to enable coordinated and efficient response to customer issues. Segmentation and grouping of customers into WhatsApp groups has been carried out to encourage real time communication and incident management.
Dr. Tarus, who, until his appointment to lead the next phase of Kenya Power’s growth was General Manager in charge of Finance in the Company, pointed out recently at the Energy Awards 2018 that in the last five years, the distribution network has expanded in size and capacity as a result of the various projects the Company has undertaken. There are 79,001 kilometres of high and medium voltage lines compared to 49,818kilometres that were in place in 2013.
The World Bank The Energy Progress Report covering the period up to 2016 places Kenya head and shoulders above the East African counterparts in terms of electricity access rate. Kenya was pegged at 56%, compared to Tanzania (32.8%), Rwanda (29.37%), Uganda (26.7%) and Burundi (7.5%). The report comes at a time when Kenya Power is working towards achieving universal access to electricity by 2020.
Dr. Tarus concludes that the Company will continue updating and automating its infrastructure to increase access to electricity for socio-economic transformation and achievement of the national Big 4 Action Plan.