Kenya to cut electricity cost by 30 percent

21 Sep, 2014 - 09:09 0 Views

The Sunday Mail

THE cost of electricity will fall by at least 30 per cent at the end of this month after the introduction of 70MW of geothermal power into the national grid, Kenya Energy Cabinet secretary Davis Chirchir announced last week.

He said cheaper geothermal power will displace “a very significant” portion of diesel generated power thereby cutting fuel cost charge on the consumer bill.

The latest addition now brings to the total geothermal power added to the national grid in the last three months to 210MW.

According to the Energy ministry, the use of geothermal power will reduce cost of power from 21 US cents per kilowatt hour to 7 US cents.

“It will translate to a saving to economy of up to Sh21 billion a year,” said Chirchir. Another 70MW will be assimilated into the national grid next month, the government announced, translating to further reduction in power bills raising the savings to the economy to Sh28 billion, the CS said.

By December, it is estimated that fuel charge, which has been the driver of costs in power bills will have reduced by 73 per cent.

Failed rains in April and May caused a surge in electricity bills between July and September, causing a lot of public outcry.

Chirchir said the ministry will also meet with millers to discuss their plans to reduce cost of their end products to consumers following the cut in power costs. He said the move primarily targets to bring down the cost of basic items as soon as possible, noting that industries could further be given subsidised rates for off peak times to realise more gains.

The CS said the target is to have the price of maize meal flour reduce to less than Sh100 for a two-kilogram packet.

It currently retails at between Sh105 and Sh144 depending on the brand.

Meanwhile, the government has also announced an agreement between itself and Essar for the buyout of its stake in Kenya Petroleum Refineries Limited. Essar had quoted a price of $5 million for its stake, but, according to Chirchir, the terms have been renegotiated and a “common position reached”.

Under the agreed terms, Essar will now be paid $1,2 million by the Kenyan government for its stake after it failed to upgrade the refinery which was one of the agreements it signed up for when buying into KPRL. — The Star

Share This:

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds