The Government of Kenya recently appointed a task force to look into the contracts of Independent Power Producers (IPPs). This followed a public outcry that the IPPs who run thermal power plants were unnecessarily contributing to the high cost of power.
A look at the cost of electricity from different sources in Kenya shows that thermal power plants are expensive. Data from the Energy and Petroleum Regulatory Authority (EPRA) shows that a single unit of electricity from hydropower costs KShs 3.2, while that from thermal power plants costs KShs 18.
While they are being demonized, thermal power plants are an important part of Kenya’s electricity supply.
Uneven power consumption habits
A look at the electricity demand over a 24hr period in Kenya reveals a consumption problem. The lowest consumption is about 1100 MW at around 2 am, while the highest consumption is less than 2000 MW, for about three hours. On average, the demand is 1500 MW.
To meet this demand, Kenya would need a generation capacity of 2000 MW to meet this demand. If you include system losses of about 23.5 % experienced by Kenya Power, the actual capacity should be 2600 MW.
Since you cannot expect 100% output from all the generators, this would need to be more than 2600 MW. According to EPRA, Kenya has an installed capacity of 2757 MW, which is sufficient to meet our peak demand without resulting to load shedding as it happened in the year 2000.
Unfortunately, the average demand is only 1500 MW while the required capacity is more than 2600 MW. This means that about 900 MW capacity of generation is idle at any given time. This is an economic problem because an idle plant means a resource that is not being utilized.
It is also not prudent to set up a very expensive power plant that will only run for a short period of the day. The best way around it is to have a cheaper power plant, and that is what thermal generators offer.
"In the long term, Kenya would need to diversify this fragile generation mix if it is to do away with the expensive thermal plants. This might involve exploring nuclear power." - Jacob Mugendi (Tweet this | Share this via WhatsApp)
Thermal generators are cheap to set but very expensive to run. On the other hand, hydro, geothermal, solar wind, and such are very expensive to install but cheaper to operate. Their ‘raw materials' are free, unlike thermal generators that need petroleum products.
It, therefore, makes sense to have a thermal generator that runs for two hours a day, then a geothermal plant that runs for only two hours every day. This is one gap that thermal power plants help to plug. Thermal plants will keep playing this role for some time until we can afford to set up more plants.
Fragile generation mix and remote locations
The other problem that IPPs solve is bringing some balance to Kenya’s fragile generation sector. Kenya has been highly dependent on hydropower plants that offer affordable electricity. However, they are also very prone to disruption by weather. One prolonged dry season would result in no electricity. Wind can also disappear at any given time.
To guard against this, Kenya would need to have a more diverse source of power than there is currently. In September 2020, Geothermal accounted for 44% of all power consumed, Hydro 37%, Wind 11%, Thermal 6%, and 1% from imports. The proportion of thermal is very low, but a very key resource to guard against unforeseen circumstances.
In the long term, Kenya would need to diversify this mix if it is to do away with the expensive thermal plants. This might involve exploring nuclear power, which the Nuclear Power and Energy Agency is exploring.
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