Kenya Power Muscles Solar Market With New Regulations

New draft regulations published by the Energy and Petroleum Regulatory Authority (EPRA) have shed light on Kenya Power’s plan to exercise control over the fast-growing solar market and protect its own revenues in the process. The rising uptake of solar by industrial power consumers, who are KPLC’s biggest customers by revenue, and homes has been a source of concern at Stima Plaza.

The proposed regulations offer guidelines for Net Metering, a mechanism that allows electricity consumers generating their own power to supply the grid in times of over-production and to be compensated for or make use of the credited energy during other times – such as at night when output is low. As the (sole) licensed power distributor in Kenya, Kenya Power will be tasked with determining net metering applications from solar energy producers.

The solar producers will not receive monetary compensation as their power generation plants are primarily intended for self-consumption. Instead, if a solar energy user sells more power to the grid than they have imported, Kenya Power will offer them a credit of 50% for each unit they exported – reducing their power bill.

The draft regulations cap the total installed capacity of solar plants that can be injected into the grid in the country in phase one –  the first three years of the programme – at 100MW. This is seen as protecting Kenya Power’s earnings from the threat of high solar uptake. In the last few years, several industrial and commercial operations have unveiled new solar grids in a bid to cut costs while reducing reliance on Kenya Power – associated with blackouts and other inconveniences.

The draft regulations apply to ‘a Consumer who owns a Renewable Energy generator of a capacity not exceeding one megawatt (1 MW) (1000kW) installed primarily for self-consumption and intends to enter into a Net-Metering System Agreement with a distribution licensee (Kenya Power) or retailer’. The new regulations also cap generation capacity limits for applicants at the maximum load demand in kW of the 12 months preceding application for net
metering.

Examples of Commercial and industrial operations in Kenya which have gone big on solar include include Williamson Tea, which unveiled a 1MW solar farm in Changoi, stating it would slash its energy bills by a third. Kenya Breweries Limited expects to generate 9.3 Megawatts at its Ruaraka plant in Nairobi and 2.4 Megawatts from a solar plant in Kisumu while East African Maltings, on the other hand, plans to generate 2.2 Megawatts of electricity from a KVA generator at its Kampala Road plant. Others are Unilever Tea, Garden City Mall, Africa Logistics Properties (ALP) and London Distillers Ltd.

The  regulations would hand KPLC the power to determine which solar power producers are able to sell their excess power out to the national grid and get supplies from the grid when their output is low.

“The licensee (Kenya Power) shall examine all applications in Regulation 7 within sixty (60) days and on a non-discriminatory basis,” the regulations state.

Notably, all Renewable Energy technologies are eligible for net metering – including solar, biomass, geothermal, small hydropower, solar, wind, solid urban waste and biogas.