Imported electricity edges out local giants

The amount of electricity that Kenya imports from its neighbours has in the recent years surged and is now eating into the market shares of local power producers including the Kenya Electricity Generating Company (KenGen).

Power imports from the region accounted for 10.66 per cent of the total energy generated, second to KenGen which accounted for 58.97 per cent in the year leading to June 2025, according to a new statistical report by the Energy and Petroleum Regulatory Authority (Epra). 

The imports, mostly from Ethiopia, were ahead of other large power producers in the country, including the Lake Turkana Wind Power (LTWP) with a market share of 9.99 per cent and geothermal power firm Orpower, whose share of the market stood at 6.14 per cent. 

Kenya also imports electricity from Uganda and Tanzania. 

The market share of imported electricity has been on a steady increase over the last four years, going up from a paltry 1.03 per cent over the 2020/21 financial year. It then rose to 4.87 per cent in 2022/23 when Kenya started importing power from Ethiopia and then to 8.8 per cent in 2023/24 year and 10.66 per cent in the 2024/25 financial year. 

The rise in imports has corresponded with a drop in market share for local large producers including KenGen, whose share has dropped to 58.97 per cent in the year ending in June this year, from 63.94 per cent in the 2020/21 financial year. LTWP has seen its share drop from 21.56 per cent to 9.99 per cent over the four years, while Orpower has dropped from 7.41 per cent in the year that ended in June 2021, to 6.14 in June this year.

Electricity imports could further edge out power producers in Kenya as authorities eye more imports.

The Cabinet Secretary Energy and Petroleum Opiyo Wandayi Tuesday said Kenya and Uganda are reviewing a longstanding power trade agreement that would see Kenya increase imports from Uganda from the current 80 megawatts(MW) to 120MW. Kenya currently imports 200MW from Ethiopia but the two countries have an agreement that allows this to be scaled up to 400MW.

“Electricity imports from Uganda will rise following the revision of the energy exchange agreement with UETCL (Uganda Electricity Transmission Company Limited)  from 80MW to 120MW, improving supply stability,” said Wandayi during the launch of the Energy and Petroleum Statistics report for the year to June 2025.

Kenya has been increasing imports to cope up with the growing demand. Power production has not kept pace with the demand, with installed capacity dipping for the first time to 3,192MW in June this year from 3199.9MW in June 2024. Power sector players attribute this to a moratorium on issuance of new Power Purchase Agreements (PPAs) by the government in 2018 as it looked into the cost of power, with the PPAs between Kenya Power and power producers seen as being among the factors that contribute to high power costs. 

The government lifted the moratorium in February 2023 but parliament reversed the Cabinet's decision in April 2023.

Epra noted that growth in electricity consumption has been on the rise, which has necessitated higher imports to cope. It has also resulted in the country relying more on thermal power plants, reversing the bid by the country to displace thermal power with renewable energy on the grid. 

In the report, Epra noted that the amount of power source from thermal energy sources grew from 18.5 per cent  to 1,335.62 gigawatt hours(GWh) of energy compared to  the 1,127.11 GWh generated in the year ending on June 2024, which it attributed to higher demand at peak hours. This accounted for 9.23 per cent of Kenya’s electricity demand. 

“We have seen an increase in demand in this sector. In February this year, we recorded a new peak of 2,316.2MW, representing a 6.3 per cent increase compared to the previous year where we recorded 2,177MW,” said Daniel Kiptoo, Epra's Director General. 

“This is the highest increase recorded in the last five years. This upward trend means that we must plan for sustainable access and amplifies the need to have investments in the sector.”

A new peak demand was recorded in August this year of 2,363.41MW.