COST OF ELECTRICITY IN KENYA

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Kenya has historically relied on hydropower for the bulk of its electricity generation. During drought seasons, when hydropower drops in supply, it has had to use costly emergency diesel-fired plants. Heavy fuel oil plants offer a viable and lower cost alternative than diesel-fired plants to address the short term energy deficit.

The price of electricity in Kenya is sh223 per kWh for households and sh183 for businesses inclusive of all components of the electricity bill such as the cost of power, distribution, and taxes. We calculate several data points at various levels of electricity consumption for both households and businesses.

Electricity cost is calculated as cost : power consumed*energy price. It is currently at 3 cents per kWh . On January 10, through the Kenya Gazette, the energy and petroleum regulatory body announced that it had increased fuel cost charge.

Notice was given that all prices for electrical energy will be liable to a fuel energy cost charge f plus 250 cents per kWh, a foreign exchange fluctuation adjustment of plus 0.82 cents per kWh for all meter readings. This increase may have been triggered by an increase in fuel prices over the years. Kenya plans to reduce the cost of electricity by 47 percent in the next three years amid increased power generations from cheaper sources wind and solar. Large power consumers should anticipate a 40% reduction in power bills over the same period with unit prices expected to drop significantly from an average of sh1500 to sh900.

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