Manufacturers call for review of electricity incentives

Written By: Caroline Njenga
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Manufacturers call for review of electricity incentives
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Manufacturers say they are not benefitting from the half price electricity tariff introduced last December targeting large businesses and manufacturers who operate through the night due to a precondition that beneficiaries scale up production.

Kenya Association of Manufacturer’s vice chair Mucai Kunyiha says most manufacturers are operating at 100 percent hence there is no room to increase capacity to benefit from the electricity incentive.

The manufacturers are calling for a review of the incentives to benefit all whose operations are done through the night without any precondition.

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Kenya’s annual power demand is increasing at a rate of 13.5 percent fueled by growing customers and an expanding economy.

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At the moment Kenya’s installed capacity stands at 2,341 megawatts and out of that, about 70 percent of that generation is from renewables such as geothermal and wind.

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Energy Principal Secretary Joseph Njoroge says with the injection of more electricity from the Lake Turkana Wind Power Project next month, the cost of power will go down as it will replace a bit of thermal in the energy mix.

He noted that his ministry has signed PPAs with over 20 independent power producers to harness renewable energy of more than 1,740MW in the next three years.

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He noted that works on the 400KV Ethiopia-Kenya interconnection transmission line is progressing well and upon completion will integrate Kenyan, Ethiopian and Tanzanian grids.

Kenya Manufacturer Association, KAM, called for a structural review of the industrialist power incentives as most large businesses are not benefiting from off-peak power cost tariff.

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