Kenya Power monopoly to end

According to the Energy and Petroleum Regulatory Authority, the rules would pave the way for generators like KenGen to sell electricity directly to significant customers like companies.
If the regulations are implemented, they will make the Energy Act of 2019’s requirements for the opening up of the energy distribution market operative.
The state-owned electricity distributor’s earnings are predicted to suffer from the sector’s openness, but it also aims to increase electricity dependability as more and more major users choose to alternative energy sources because of the national grid’s high costs and instability.
“The wheeling rules will soon be implemented. In the next three months, they will be made public and available for public input,” Epra director-general Daniel Kiptoo told Business Daily on Thursday.
“However, a balance must be struck in order to prevent leaving Kenya Power in the hands of the government.”
According to Section 136 of the Energy Act of 2019, Kenya Power is required to provide any licensed distributor with non-discriminatory access to its transmission system in exchange for payment of transmission or wheeling fees.
According to the Energy Act, “wheeling” refers to allowing a third party to use a transmission licensee’s or distribution licensee’s connected facilities, including its distribution system, for a pre-agreed fee.
In order to directly sell power, Kenya Power will charge generators who use its transmission line.
At least 60% of the electricity provided to Kenya Power each year comes from KenGen, which in 2020 announced plans to begin direct sales after the implementation of the Energy Act.
The State-owned power provider had stated that the major customers who generate more than half of Kenya Power’s energy sales income would be its initial targets.
If the wheeling regulations are enacted, KenGen and the independent electricity producers will require a distribution license from Epra.
Kenya aspires to be like countries that permit wheeling, like South Africa and advanced economies like the US and Germany.
The supply line needs to be strong, but electricity wheeling is considered as essential to ensure economical and dependable power supplies.
A deteriorating transmission line that needs billions of dollars to be upgraded is a problem for Kenya Power. The utility has stated that it will upgrade its network in the year beginning in July for Ksh10 billion.
Early this month, independent power producers petitioned Parliament to implement the Energy Act’s part allowing for competition in electricity distribution.
With nine million subscribers, Kenya Power has been looking to increase that number in the upcoming years, which would ultimately increase profits.