Energy Cabinet Secretary (CS) Charles Keter has revealed that the government is putting in place measures that will tame the soaring cost of electricity.
According to Nation, the proposed strategy will see a gradual reduction in the number of diesel-run power plants to scale down the operating costs.
Besides, the government is planning to build massive power lines and about 40 power stations to aid transmission of electricity from green sources and improve the quality of electricity over the next one year.
"We are in very good discussions with Treasury to have the 16 percent VAT on fuel cost charge removed because it amounts to double taxation," the CS revealed.
The Ministry of Energy is considering forging private partnerships in the construction and maintenance of major power lines to reduce government footing the lengthy and expensive financing and construction processes of the critical infrastructure.
For instance, in certain areas, the ability to evacuate wind or solar-generated power will make them less reliant on expensive thermal power plants and allow the government to naturally terminate them when their contracts end.
Although phasing out diesel plants is preferable due to economic efficiency and positive environmental impact, the production plants supplement the grid supply during peak hours.
Equally, the government is keen not to discourage investors in the power generation sector by forcing several terminations of the diesel plants or by asking for very low prices. The diesel component is reflected as the fuel cost charge and varies with the cost of diesel and is a key component of the electricity tariff.
"We are considering how to work around them (diesel plants), either because the electricity demand is still low as not to justify the building of a power line or when we establish that the existence of the plant throughout the agreed period is more costly than terminating it legally," CS Keter indicated.
One example of the phase-out process is the 400KV Suswa-Isinya-Rabai line in Mombasa that saw the city reduce its reliance on diesel-intensive sources from 300MW to 100MW.
The regular reliance on the diesel generator at Muhoroni to supply Western Kenya with power will be reduced with the construction of the Olkaria-Lessos-Kisumu line.
Regardless of the consumers' locality, the overall bill paid by everyone is affected by the costs in regions supplied by the diesel-heavy sources.
