KPLC Recorded Historic System Losses in 2021

Kenya Power and Lighting Company (KPLC) has accumulated losses that were attributed to increased power transmission, distribution and power theft. According to the economic survey that was released by a government bureau the Kenya National Bureau of Statistics (KNBS), transmission and distribution losses hit 2,831 gigawatt-hours. The figure is a 1.4 percent increase from 2790 GWh last year.

Kenya Power has been recording system losses that occur when electricity produced by the Kenya Generation Company (KENGEN) is sold to its consumers. When power produced by the state power provider and Independent Power Producers (IPPs) is not utilized, the system losses are passed on to the consumers through an increased price of electricity.

Energy and Petroleum Regulatory Authority (EPRA), a state-owned energy regulator, allows Kenya Power to push the system losses to a limit of 19 percent. The estimates by Kenya Power show that for every one percent system loss, the company incurs a loss of 800 million. In a year, the power company can accumulate losses of about 3.5 billion. This puts financial pressure on the state power distributor and its consumers.

Kenya Power has also recorded an 8.7 percent increase in the demand for electricity which was attributed to the recovery from the pandemic where businesses and manufacturers were resuming operations gradually. The energy provider has over time implemented reforms to reduce system losses such as the installation of smart meters and the rollout of regional, county and transformer metering.

There were also ongoing talks of renegotiating terms with the independent power producers who had signed 20-year power purchase agreements with the state. The cost of the independent power producers has been considered to be high based on the capacity charge which is in the contract. Capacity charge also called the demand charge, is the amount of electrical power being purchased by the government.

It had been noted that some power plants owned by the IPPs fall short of producing sufficient power. The government is mandated to fulfill the agreements of the contracts.