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Completion of grid project opens way for renewables in Kenya

28th September 2018

By: John Muchira

Creamer Media Correspondent

     

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Kenya is set to connect about 310 MW of electricity generation capacity to the national grid, following the completion of a much-delayed transmission line project.

Following a delay of about two years, the East African nation has finally completed the Loiyangalani–Suswa transmission line, paving the way for Lake Turkana Wind Power (LTWP) to be connected to the grid.

The completion of the 428 km line, which was initially expected to cost $208-million, a figure that escalated to $300-million, comes at a time when Kenyans are becoming increasingly worried about increases in electricity tariffs on the back of a newly introduced 16% value-added tax on petroleum products. Only last month, government increased electricity tariffs by about 30%.

With the coming on stream of LTWP and the completion of the transmission line, government has assured that electricity tariffs will remain stable, as the wind power project will lead to the scaling down of electricity generation from thermal plants.

“Kenya has for a long time depended on thermal power generation, which is expensive. Renewable sources like geothermal, wind and solar are dependable and affordable,” said Energy Cabinet Secretary Charles Keter when he officiated at the precommissioning of the transmission line.

Delays in completing the line after the original contractor, Spain’s Isolux Ingeneria, went bust resulted in LTWP lying idle since January last year, exposing Kenyans to a lump-sum penalty of $54-million.

The contract between the Kenya government and LTWP had a clause that imposed the fine on government if the line was not ready when the wind plant was completed.

Government committed to compensating LTWP to enable the company to meet its financial obligations, including servicing loans used to build the wind farm, which is the largest in Africa.

Government, however, did not pay the penalty after negotiating with LTWP to postpone the start of commercial operations to the end of last month.

The completion of the line by Chinese firms NARI Group Corporation and Power China Guizhou Engineering Company and the connection of the plant to the national grid now mean Kenya will not pay the fine.

The wind farm is expected to boost Kenya’s pursuit of affordable power. LTWP signed a power purchase agreement that will see it sell electricity to Kenya Power at 8.5c/kWh. It will also help increase Kenya’s total installed electricity generation capacity from 2 370 MW to 2 680 MW and enable government to implement its plan to gradually phase out thermal plants.

Kenya has a total of 27 thermal plants, with an installed capacity of 712 MW, but is scaling up investments in renewables, with a view to completely doing away with the diesel-burning plants.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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