The government of Kenya is seeking a whopping US $87m from tax payers to disconnect 3 thermal plants with combined capacity of 190MW from the national grid.
Energy Cabinet Secretary Charles Keter told the Senate that the three thermal power plants are not needed after Kenya increased its share of cheap wind power. However taxpayers need to raise the US $87m to pay off the owners to disconnect the plants from the national grid or allow them to run down their contracts set to expire within five years.
The use of thermal power has been blamed for Kenya’s expensive electricity relative to countries like Egypt where Kenya runs 23 diesel power plants that account for 25% or 700MW of the total installed capacity of 2,800MW.
The fuel cost charge on power bills, which is linked to the amount of thermal power in the grid, has remained unchanged at US $0.024 per kWh since August despite the injection of the cheaper wind electricity. Consumers expected lower electricity charges with supply of wind power from Lake Turkana which was switched on in October, and now injecting up to 240MW into the grid.
“Power system and energy balance analysis results demonstrated that technically they can safely be decommissioned without negative impacts to the quality and security of supply of electricity,” said Mr Keter.
Contracts from Iberafrica Power Plant’s 56MW, Tsavo Power’s (74MW) and Kipevu Diesel’s (60MW) are set to end in October, 2019, September 2021, and July 2023 respectively. A task force set up to review independent power producers and power purchase agreements (PPAs) noted that ending the contracts would help bring down electricity tariffs.
The Energy Cabinet Secretary gave an alternative of retiring the power plants in the medium term if the disconnection funds are not reached.