This archive report was first published on 3 September 2019.
Kenya Shifts to 'Take and Pay' Model to Ease Power Payment Burden ¶
Kenya is shifting to a new model where power plant developers will only be paid for the electricity they inject into the national grid, a move expected to ease the payment burden on Kenya Power and reduce pressure on consumer power bills.
The Energy and Petroleum Regulatory Authority (EPRA) has announced that the country is adopting the 'Take and Pay' model of power purchase agreement (PPA) between Kenya Power and investors, moving away from the current 'take or pay' regime.
According to EPRA Director-General Pavel Oimeke, the country is already on the 'Take and Pay' model for some recent projects, including solar and wind power.
Prof Izael Da Silva, a renewable energy specialist and professor at Strathmore University, has lauded the switchover to the take and pay system, saying it is the way to go.
He noted that auctions are the best option for Kenya, as they enable planning to achieve competitive consumer tariffs.
Kenya's total installed capacity stands at about 2,700 megawatts (MW), against a peak demand of about 1,900 MW, leaving a balance of 800 MW that serves as the surplus/reserve power.
However, an excess of reserve power translates into an unnecessary burden on consumers and Kenya Power, and the country is now transitioning to the take-and-pay from the take-or-pay model.
