The raging debate on why more Kenyans are embracing alternative energy sources to escape the Kenya Power Limited high tariffs is a timely discourse on the future of an important sector. Energy is a key ingredient for development. Besides lighting homes and freeing from darkness more hours to income-generating activities, energy is also an enabler of manufacturing and other industrial processes. For Kenya with its stated ambitions of industrial take-off and middle-income nation status, availability, access and affordability of energy are critical.
With an electricity penetration of over 70 per cent, the country has made impressive strides in the right direction. The World Bank regards the pace of Kenya’s electrification as among the fastest in the Sub-Saharan region. The Last Mile Connectivity that targeted nationwide connectivity is a good example of a purposed drive to make energy a truly basic amenity.
But at what cost? A significant number of connections under the Last Mile Connectivity are today in limbo because targeted beneficiaries are unable or unwilling to foot consumption costs. This is especially the case in rural setups where, strictly speaking, electricity is not the cheapest, most available form of energy.
For consumers seeking connectivity independent of government-sponsored subsidies, the applying fees can be daunting. A single-phase connection to a grid that is only a few metres away can be as high as Ksh 200, 000! The price rises absurdly for three-phase connections.
Clients often have to contend with inordinate delays in processing applications. Deliberate frustrations designed to nudge clients towards parting with bribes to shorten the delay are not uncommon.
Regionally, Kenya has the highest energy cost per unit besides Rwanda. At Ksh17 and Ksh20 per kWh for industrial and domestic consumption respectively, the country’s prices compare unfavourably with the equivalent of Ksh1, Ksh10 and Ksh18 for Ethiopia, Tanzania and Uganda respectively. The cost is also uncompetitive against prevailing prices in Egypt (Ksh4), South Africa (Ksh13), India (Ksh8), China (Ksh8) and Turkey (Ksh 9).
This comparison is especially important for bulk industrial consumers. Energy is, after all, a major cost of production. For Kenyan-based manufacturers eyeing local, regional or global markets, it portends a serious disadvantage in the competitiveness of market-bound products against similar goods from rival countries.
Tied to the factor of cost is energy stability. The diversification of energy sources away from traditional hydro-based supply has significantly boosted electricity stability in Kenya. This means that there are fewer outages and blackouts. Still, the […]