Utility firm seeks ways to stem outage of power, save billions in revenue
What you need to know:
The team comprises five managers who will work with existing departments to implement the company’s five-year power loss reduction strategy adopted early this year.
The strategy targets to reduce electricity losses to 3.5 per cent for transmission losses, 4 per cent for distribution losses and nil for commercial losses.
Power losses basically refer to the difference between the amount of electricity generated and that which is sold at a specific period.
Kenya Power has created a special unit to deal with power losses as the company seeks to save billions of shillings in revenue.
The team comprises five managers who will work with existing departments to implement the company’s five-year power loss reduction strategy adopted early this year. Establishment of the unit was approved by the board two weeks ago.
The strategy targets to reduce electricity losses to 3.5 per cent for transmission losses, 4 per cent for distribution losses and nil for commercial losses.
The country’s annual power losses stood at 17.4 per cent by the close of the last financial year on June 30. The losses were 24 per cent eight years ago with industry estimates showing that one per cent loss translates into Sh1.3 billion in lost revenue.
“We have set aside Sh10 billion in the current financial year that will be used in various programmes to strengthen our distribution system. The strategy team will work alongside other existing programmes such as the Boresha Stima project to deal with the losses,” Mr Peter Mungai, Kenya Power’s general manager for business strategy, told Smart Company.
WHAT IS POWER LOSS?
Power losses basically refer to the difference between the amount of electricity generated and that which is sold at a specific period.
The losses occur at three levels: During transmission from the generating plants to substations through the high voltage lines; during distribution from substations to customers’ premises via low voltage lines; and as a result of vandalism and non-payment of bills which leads to commercial losses.
Kenya Power’s records show commercial losses are currently leading at 6.9 per cent followed by distribution losses and transmission losses at 6.5 per cent and 4.5 per cent respectively.
The energy regulatory commission (ERC) allows a certain level of losses that occur due to technical problems on transmission and distribution lines to be recovered through bills. This means a surge in losses contributes to additional burden to consumers.
“Inevitably power transmission involves some technical losses. We allow a particular level of losses per year at the point of setting the tariff which is applied in a period of three years. This is the portion of the losses that is recovered through the bills,” said ERC’s director general Joseph Ng’ang’a in a telephone interview. He did not disclose the amount of the recoverable loss.
KNBS DATA
The latest data from the Kenya National Bureau of Statistics shows that in July, 182 million units of electricity were lost, increasing for the third consecutive month from May and June when 101 and 145 million units respectively were lost.
The KNBS data shows that total electricity generation increased to 810 million units in July from 788 million units in June.
However, domestic consumption of electricity dropped from 642 million units to 627 million units during the same period.
Kenya Power blames the current transmission losses on delays in construction of transmission lines that has been brought about by failure by the Kenya Electricity Transmission Company (Ketraco) to acquire wayleaves for the lines on time due to protests by community members in some of the affected areas.
The company admitted liability for the distribution losses that result from faults on the low voltage lines with majority of the distribution network said to be ageing. Installation of the low current lines is the mandate of Kenya Power and the Rural Electrification Authority.
CONSTRUCTION DELAYS
“There is a mismatch between generation and transmission partly because completion of some of the projects to install new transmission lines have delayed. Ketraco is facing wayleaves problems hence the delay,” said Mr Mungai.
Last year, construction of a 132kV transmission line between Kindaruma and Garissa by Ketraco was delayed by a year, leaving the northern area outside the national grid and currently relying on diesel driven generators for power supply.
The government’s plan to increase the installed electricity generation capacity by 5,000 megawatts by the end of next year further puts pressure on the need to refurbish the existing power distribution system and its expansion to avoid overloading the network which could lead to more losses.
