Kenya Power<\/a> on Wednesday announced that it recorded a 92 percent net profit slump to Sh262 million in the financial year ended June 2019 from Sh3.27 billion booked a year earlier.<\/p>\n\n\n\n\u201cThis was mainly attributable to increase in non-fuel power\npurchase costs by Sh18 billion from Sh52.7 billion to Sh70.8 billion following\nthe commissioning of two power plants with a combined generation capacity of\n360MW during the period,\u201d the company said.<\/p>\n\n\n\n
The profit drop came despite the State-owned utility firm\nrecording a 17 percent growth in revenues from electricity sales that swelled\nto Sh112.4 billion.<\/p>\n\n\n\n
The coming on-stream of the 310MW Lake Turkana wind park in\nSeptember 2018 and the 55MW Garissa solar farm raised Kenya\u2019s total installed\ncapacity to about 2,700MW.<\/p>\n\n\n\n
This is against a peak demand of about 1,900MW, leaving a\nbalance of 800MW or 30 percent as surplus\/reserve power. <\/p>\n\n\n\n
The power purchase agreement (PPA) for the privately-owned Lake\nTurkana wind plant has the take-or-pay clause which binds Kenya Power to buy wind\npower at any given time, failure to which it pays compensation for\ndeemed energy.<\/p>\n\n\n\n
Kenya Power is mostly forced to pay the deemed\nenergy charges to the wind farm at night when the country\u2019s demand drops by\nnearly half but wind speeds are highest. For shutting down several turbines at\nnighttime on reduced demand, Lake Turkana wind investors are paid a curtailment\nfee, a situation that has eaten into Kenya\u2019s Power\u2019s books.<\/p>\n\n\n\n
Kenya\u2019s 30 percent reserve margin is double the global average\nrate of 15 percent, meaning more plants are sitting idle, mostly thermal diesel\ngenerators, while some renewables occasionally have to curtail generation.<\/p>\n\n\n\n
Some spare power is necessary in\nthe economy to take care of emergency situations like when several plants are\ntaken off the national grid during maintenance or unforeseen breakdowns. The\nspare capacity also covers any future demand growth in the near-term since new\nplants have a long construction turnaround period. The rule of thumb is for\nsupply to be ahead of demand.<\/p>\n\n\n\n
But overly excess\ntranslates to an unnecessary burden on Kenya Power.<\/p>\n\n\n\n
That\u2019s why the Energy and\nPetroleum Regulatory Authority (EPRA) now wants Kenya to shift to the \u201cTake and Pay\u201d PPA model away from \u201cTake or Pay\u201d. This will see power plant\ndevelopers only paid for electricity they supply to the national grid, a\ndeparture from the current practice where they\u2019re paid whether or not they\ngenerate power.<\/p>\n\n\n\n
In the last financial year, fuel\ncost slipped 22.5 percent to Sh18.3 billion ($180 million) due to \u201cimproved\nenergy mix following less utilisation of expensive thermal plants during the\nyear.\u201d<\/p>\n\n\n\n
\u201cUnits generated from thermal plants decreased by 904 GWh (gigawatt hours) from 2,202 GWh the previous year to 1,298 GWh,\u201d Kenya Power said.<\/p>\n\n\n\n
Read also:<\/strong> Why Kenya\u2019s Solar and Wind Farms Easily Hit Grid Parity<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Kenya\u2019s low power consumption amid excess supply pushed up payments for idling green plants by $180 million (Sh18 billion) last year, hurting the bottom-line of retailer Kenya Power. Kenya Power…<\/p>\n","protected":false},"author":3,"featured_media":8332,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","pagelayer_contact_templates":[],"_pagelayer_content":"","_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[89],"tags":[474,670,910,944],"class_list":["post-8331","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-responsibility","tag-deemed-energy","tag-garissa-solar","tag-kenya-power","tag-lake-turkana-wind-power-plant"],"_links":{"self":[{"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/posts\/8331","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/comments?post=8331"}],"version-history":[{"count":0,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/posts\/8331\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/media\/8332"}],"wp:attachment":[{"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/media?parent=8331"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/categories?post=8331"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/tags?post=8331"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}