Electricity losses by Kenya Power rose marginally to 23.47 percent in June 2024, up from 23.19percent, highlighting the utility’s struggles to seal leaks on the national grid..
System losses refer to the difference between the electricity bought from producers and the amount that exits the distribution grid for consumption. The losses are expressed as a percentage of the net units of electricity generated.
“Total system losses, comprising both technical and commercial, accounted for 23.47 percent of the energy purchased, an average that exceeds the 18.5 percent benchmark set by the authority (Epra) in the financial year 2023/24,” the Energy and Petroleum Regulatory Authority (Epra) said in a performance update.
Kenya Power has been grappling with mounting system losses in the form of electricity theft via illegal connections and the power is lost through dissipation along the firm’s aging transmission network.
The inability to lower the system losses weighs heavily on Kenya Power’s books given that the firm is not allowed to pass the hit to customers.
This (high system losses) comes despite Kenya Power’s pronouncements to cut the losses and ease the financial impact on its books.
Kenya Power, whose quality of electricity supply and customer satisfaction has significantly waned over the years had last year targeted to cut the losses to 20.93 percent.
The financial impact of the high system losses will be reflected in the company’s books when it releases its annual report for the 2023/24 financial year later this year.
Kenya Power posted a net profit of Sh319 million in the six months that ended December last year, a lift from the net loss of Sh1.1 billion posted in the same period of 2022.
A significant reduction in the system losses is key to protecting gains made from increased electricity sales. Kenya Power had 9.66 million customers as at June this year, a five percent rise from 9.2 million customers a year earlier.
But this rise in connections is mainly attributed to homes whose electricity consumption is not as big as that of industries. Struggles to cut system losses underline the twin headache of an aging network and illegal power connections.
The electricity transmission network is dilapidated and in need of a revamp to effectively serve the growing customer customers.
Kenya Power is also struggling to curb the runaway theft of electricity via illegal connections.
The firm holds the unwanted tag of having the highest system losses among all electricity suppliers in East Africa.
The power supplier in Tanzania has the lowest system losses at 14.56 percent followed by Rwanda at 16.9 percent.
Burundi comes third at 18.3 percent while Uganda is fourth at 20.6 percent.
However, Kenya has the longest grid coverage in terms of customers, a scenario that leaves it a higher chance of incurring bigger system losses on account of the longer transmission network.
Kenya has since turned to the private sector to help revamp the transmission network in which is key to cutting system losses.
Last week, Kenya inked a Sh95.68 billion ($736 million) deal with India’s Adani Group to build and operate four transmission lines and two substations for 30 years under a Public Private Partnership (PPP) deal.
A similar deal with Africa50 to build two transmission lines is also in an advanced stage.
There are also other lines lined up under the PPP model as Kenya races to revamp the grid without relying on a choked Exchequer.
