State-owned Kenya Electricity Generating Company’s #ticker:KENGEN (KenGen) position as the dominant power producer in the country is likely to be clawed back in the near future by new private players who are making multibillion-shilling investments, the Energy and Petroleum Regulatory Authority has said.
In a new report, the regulator says the dominance of KenGen, which had a 1,796.4 megawatt (MW) annual capacity and supplies three quarters of Kenya’s electricity, is being chipped away by new private firms, who are mainly active in the field of renewable and green energy.
“This dominance is mainly attributed to the previous power structure that was vertically integrated but with increased unbundling and open access coupled with increased private sector participation, it is unlikely that this will remain the case in the near future,” said Epra in its inaugural annual report for 2019 that captures trends in the Kenyan energy sector.
Even so, Epra noted that the structure and share of power generation still remains hugely in favour of KenGen which continues to make huge investments.
KenGen plans to more than double its electricity generating capacity to 4,270 MW by 2025.
It had a 76 percent market share in 2018, while independent power producers (IPPs) accounted for 24 percent.
KenGen mainly generates hydro and geothermal power, while independent producers are mainly working in the thermal, wind and solar space.
Lake Turkana Wind Power, a 310 megawatt installation that was officially commissioned in July last year, is the biggest private power producer.
The Rural Electrification and Renewable Energy Corporation, owned 54.6MW solar power plant in Garissa was also commissioned last year. The plant is the largest solar power installation in East and Central Africa.
Previously, independent power producers were mainly to be found in thermal or diesel production, but the country has been looking to cut back on this source due to high cost that has led to Kenya’s electricity process being uncompetitive from an industrial production point of view.