M a r k e t N e w s

Emergency Power Generation Earns Kengen Sh24.9 Million

Posted on : Wednesday, 2nd December 2015

Kenya Electricity Generating Company (KenGen) earned Sh24.9 million for managing the most expensive form of energy in the country during the year to June 30.

 
The revenue is disclosed in KenGen's annual report for the period which also shows that the company earned Sh33.7 million for a similar activity last year.
 
According to KenGen's managing director Albert Mugo, the money was paid to KenGen for its role in assisting UK's Aggreko, the licensed emergency power generator, acquire a licence and also procurement of fuel for emergency power generation on behalf of Aggreko.
 
"The payment depends on the amount of energy generated. KenGen has an agreement with the ministry of energy and petroleum and Kenya Power to manage emergency power on their behalf," said Mr Mugo in a telephone interview.
 
Aggreko operates 30 megawatts of emergency power in the country, the balance from an initial total of 290 megawatts, most of which has been retired from the grid over the years in a bid to control the cost of electricity.
 
The emergency power capacity is meant to stabilise power supply in Western Kenya which lacks adequate generation.
 
"The key issue is that the emergency plant remains because the western part of the country has inadequate power as well as not enough reactive power and hence the plant is required. The problem will be surmounted once the relevant transmission lines are completed," said David Kariuki, an economist at ERC.
 
According to the energy regulatory commission (ERC), emergency power was hooked to the grid at an average of Sh18 per unit.
 
Kenya Power purchases other forms of electricity such as hydro, geothermal and even expensive diesel driven thermal electricity at about Sh10 per unit.
 
Construction of a 220kV transmission line between Olkaria and Kisumu through Lessos and another 132kV line between Sondu and Awendo which are part of the infrastructure hoped to stabilise power supply in Western Kenya is yet to start.
 
ERC blames the weak transmission network in Western Kenya on lack of adequate funds to enable Kenya Electricity Transmission Company (Ketraco), which is tasked with constructing transmission lines and substations, to fast track the projects.
 
"Ketraco relies on resources from the exchequer which are at times limited. We are looking at making Ketraco a revenue generating institution so that it can raise funds to implement some of its projects," said Mr Kariuki.

Source : allafrica.com
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