Energy boss must wake up Kenya Power
That Kenya Power is haemorrhaging is no secret. Since January this year, every headline in the local newspapers about the company has tended to present a different expressive word of a slowly collapsing giant. Its failure will certainly undermine the country’s competitiveness.
As a result, industrialists are quietly relocating to neighbouring countries and exporting their products into Kenya under regional trade agreements, a large chunk of which tend to favour importation. Manufacturing, one of the key Agenda 4 items that was supposed to increase to 15 percent by 2022 (currently at 9.2 percent), create jobs, increase foreign direct investment and improve ease of doing business, is now on the wrong trajectory.
The Business Daily of August 24 attributes Kenya Power’s fast-declining fortunes to electricity theft facilitated by its own employees as well as their legacy infrastructure. Instead of sealing the loopholes to effectively deal with problem and bring the company back to profitability, Kenyans are being forced to pay more to this giant monopoly. Yet, energy is a key consideration for investors coming to the country.
A recent World Economic Forum (WEF) report, Energy as a Competitive Advantage, says the level of investment in energy infrastructure, as well as the comprehensiveness and efficiency of energy policy, also contribute significantly to a nation’s competitiveness.
Indeed, the Kenya National Energy Policy states “the overall objective of the energy policy is to ensure affordable, competitive, sustainable and reliable supply of energy to meet national and county development needs at least cost, while protecting and conserving the environment.”
With such a clear policy statement, one would think that the energy sector, especially the Energy and Petroleum Regulatory Authority (Epra), would protect consumers from paying for inefficiency. Instead, Epra allowed Kenya Power to punish consumers with additional charges resulting from theft, corruption and general failures.
The best course of action for a regulator is to compel the company to deal with its problems and encourage innovation to create a more competitive environment.
Monopolies generally tend to be inefficient since they fix prices without fear that someone will bring a substitute product. It is through either policy or regulatory mechanisms that then become efficient.
By now Epra should be encouraging new innovative projects aimed at solving the energy problem as well as waking up Kenya Power to the emerging realities that customers can do without them.
The WEF report noted that technological advances that lower energy costs or increase efficiency are continuously expanding reserves, not only for green investment policy but especially in hydrocarbons such as natural gas fracking.
As we seek alternative energy sources, Kenya Power must make investments in technology (smart grid systems) to curb electricity theft. It has invested in an extensive fibre optic infrastructure over the power lines. This infrastructure is key to developing a smart grid (installing smart meters) as well as a source of new revenue if properly used to supplement fibre to homes.
The meters will be fitted with devices to enable machine-to-machine communication over either wired or wireless channels. The technology will lower operational costs while at the same time monitor production, consumption and distribution of electricity to detect theft when and where it occurs.
Some countries that invested in smart grids have seen the growth of micro grids (decentralised approach to electricity sources) managed by communities that over time have managed to reduce blackouts.
With abundant solar energy in Kenya, we should be decentralising energy and empowering communities to innovate for energy resilience.
Electricity is crucial to the country’s competitiveness that must be dealt with urgently in order to meet the goal of affordability at “least cost” as the energy policy states.
Source : businessdailyafrica
