The Energy regulator plans to cut costly electricity tariffs that small power generators charge homes that are not connected to the Kenya Power grid.
The Energy Regulatory Commission (ERC) said that fresh regulations, expected before year-end, are expected to lower the retail tariffs of the smaller electricity distributors whose costs are up to 12 times what Kenya Power levies.
The mini-power generators will have the option of buying bulk electricity from Kenya Power for onward selling to businesses and homes through their mini-grids, an option that Tatu City real estate is eyeing.
The new regulations will also provide a framework for Kenya Power to buy out mini-grids from private developers and supply customers at lower uniform national tariffs.
The third alternative would be for private investors to set up the small grids, often powered by solar sources, and let Kenya Power retail electricity to customers on their behalf, ensuring lower costs for developers.
ERC renewable energy manager Caroline Kimathi said “We want to ensure there is some level of equity in power costs, regardless of the mode of distribution. It’s not right for homes in remote villages to access power at higher rates than what the rich are paying,”
The proposals will, however, only strengthen Kenya Power’s monopoly despite the Energy Bill providing for the licensing of other electricity distributors and retailers — in a move that aims to increase competition and improve service delivery.
Interest in off-grid projects has been on the rise after the government signaled adoption of micro-grid technology to enhance energy access, especially in remote off-grid areas.