Worry as peak power demand vs installed capacity gap shrinks

The increase in power demand was on the back of the connection of 447,251 new customers in the financial year ended June 2024. [Sammy Omingo, Standard]

Electricity demand increased by almost 100 megawatts (MW) in the last two years, new data shows.

This raises questions on how sustainable is Kenya’s current available capacity even as lawmakers stall to lift a moratorium that barred Kenya Power from signing new Power Purchasing Agreements (PPAs) with independent producers.

According to the latest Kenya Power financial results for the period ended June 2024, while the available capacity has increased by 196MW since the 2018-19 financial year, the amount of electricity consumed has almost doubled over the period ending September 2024.

In the 2018-19 financial year, the available capacity stood at 2,148MW against a peak demand of 1,882MW.

By September 2024, the firm’s capacity stood at 2,344MW compared to a peak demand of 2,242MW.

The 2,242MW recorded on September 8, 2024 was 93MW more compared to the 2,149MW recorded on December 14, 2022.

The near-match between the peak demand and installed capacity is the reason behind Kenya Power’s push to have the moratorium placed by the National Assembly in April 2023 lifted to ensure the country has enough reserves.

“The margin between peak demand and available capacity has continued to shrink. The last four peak demands recorded were concurrent with load management of up to 60MW hence the need to onboard additional generation capacity,” says Kenya Power in its financial report. 

Managing Director  Joseph Siror said the country is staring at a possible power rationing to meet the peak demand.

“We are not really in a good situation. If there is a drought, it might call for power rationing or load shedding,” he said during the release of the utility firm’s full-year financials, which showed the firm posted a profit of Sh30.08 billion during the year under review.

He added: “This is something we are dealing with, and we are looking at all possible options. But I think the very urgent one would be to lift the moratorium.”

According to the firm’s financials, the increase in power demand was on the back of the connection of 447,251 new customers to the grid through a rapid result initiative(RRI) in October 2023. This increased the number of customers the firm serves to 9.7 million.

Additionally, Kenya Power noted the amount of electricity consumed by businesses, particularly manufacturers also increased during the review period.

There are also almost 300,000 new customers expected to join the grid through the Last Mile Connectivity Project Phase IV, which targets 280,000 as well as 11,000 others through Phase V of the project.

This will bring the total number of the utility firm’s customers to 10 million. As such, if there is no additional available or installed capacity to the grid, then the utility firm may be forced to load shed to meet demands during peak hours from 7:30pm to 10pm.  

The Energy Ministry has been pushing for the moratorium to be lifted, which would allow Kenya Power to buy more capacity from contracted Independent Power Producers (IPPs).

Principal Secretary State Department for Energy Alex Wachira gave an update on the plan at a meeting held with the National Assembly Energy Committee chaired by Vincent Musyoka.

He said the ministry had a meeting with Parliament on Monday last week and agreed to have certain issues ironed out. One of them is that IPPs should have battery energy storage but at a cost that will not negatively affect customers.

“When we start onboarding (new PPAs) after the moratorium is lifted, we look forward to onboarding cheaper sources of renewable energy,” he said.

Mr Musyoka said the major issue hindering the lifting of the moratorium is around tariffs, especially how much the IPPs sell the power to Kenya Power.

He described the process as a one-man show where gazette notices are published without the involvement of the public and sometimes the National Assembly’s Energy Committee.

“There are so many deals signed, which we think they are skewed. This is why the moratorium was placed in the first place. As a committee, we will lift it but with some conditions,” he said.

Kenya Power boss, Eng Siror, explained that for the country to be power sufficient, it is recommended that there be spinning reserves of about 15 per cent of the current capacity.  Spinning reserve is the amount of power generated that can compensate for any faults or drops in voltage that may lead to a blackout.

He said the country needs spinning reserves of at least 310MW.

However, the September figures show the country had a reserve of just 102MW, while the peak demand stood at 2,242MW.

“If you do not have that reserve margin, you will be staring at load shedding to compensate for what you have lost or if the system is not intelligent enough, you can almost lose the grid,” explained Eng Siror.

The other challenge, he noted, is that about 645MW of the available capacity comes from wind and solar, which are intermittent sources and, hence not fully dependable, especially during the peak hours.

The financials showed that at peak hours, solar is at 0MW, while wind - which has an available capacity of 106MW - is at 25 per cent.