Kenya would need Sh9 billion to shut down three thermal power plants, even though Energy Cabinet Secretary Charles Keter told the Senate on November 21, 2018 that the stations are no longer necessary after the country added more cheap wind power to the grid.
The plants in question are Iberafrica Power Plant, Tsavo Power and Kipevu Diesel, with a combined capacity of 190 megawatts. Their contracts do not all end at once: Iberafrica’s 56MW deal runs to October 2019, Tsavo Power’s 74MW contract expires in September 2021, and Kipevu Diesel’s 60MW agreement lasts until July 2023.
Keter said the government’s power system and energy balance analysis showed the plants could be retired safely without harming electricity quality or supply security. He added that if the Sh9 billion is not immediately available, the better option would be to phase them out in the medium term.
The shift is tied to the 310MW Turkana Wind Farm, which was switched on in October 2018 and was already feeding up to 240MW into the national grid. Keter’s position was that the growth in wind generation has reduced the need for the older thermal stations.
Kenya has 23 diesel power plants that make up about 25 per cent, or 700MW, of the country’s 2,800MW installed capacity. Thermal generation has long been blamed for high electricity costs, especially when compared with countries such as Egypt.
According to the figures cited, solar and wind power cost about Sh8 per kilowatt hour, while thermal power costs more than Sh20. The fuel cost charge on electricity bills, which is linked to the amount of thermal power in the grid, had remained at Sh2.50 per kWh since August 2018 despite the addition of cheaper wind power.
Consumers had expected lower bills once Lake Turkana wind power began supplying electricity. A task force reviewing independent power producers and power purchase agreements said ending some of the contracts would help reduce tariffs, noting that many of the agreements are foreign-funded and priced in dollars, which pushes up the cost of electricity.
The government’s broader plan is to gradually phase out expensive diesel generators and replace them with cheaper, cleaner energy sources.
