Kenya Power UPDEA me..

3/1/2012
Kenya Power’s Experiences and
Challenges as a single off-taker
in the Power Sector
Presentation to the UPDEA
Scientific Committee Meeting
By
Eng. Joseph K. Njoroge, MBS,
Managing Director & CEO
Kenya Power & Lighting Co. Ltd.
OUTLINE
Kenya Power’s Vision, Mission and Strategic
Pillars
Role of Kenya Power in the Economic Vision
Power Sub-Sector Reforms
Key Statistics
Major Developments in the Power Sub Sector
Transforming Distribution Infrastructure and
Customer Service Delivery
Major Sub-Sector Challenges and Responses
Future Outlook
4 th July 2011
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Kenya Power’s Vision, Mission
& Strategic Pillars
People
Diversification
Robust Network
Vision : to provide world
class power that delights our
customers
Financial
Customer
Service &
Marketing
Innovation
Corporate Social
Responsibility &
Governance
Sources of
Power
Mission : Powering people for better lives
Core values: Customer First; One Team; Passion; Integrity,
Excellence
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Role of Kenya Power in the Economic Vision
In the new constitution consumers have a right to goods & services
provided by public and private entities
Planning and development of electricity infrastructure will be executed
in liaison with national and county governments
Vision 2030 envisages major infrastructural development to facilitate
economic growth. Kenya Power’s contribution is:
Increasing population access to electricity from the current 29% to 40% by
2020
Planning and implementation of distribution reinforcement and upgrade
projects
Procurement of adequate power generation capacity from diverse sources;
and maintaining a minimum reserve margin of 15% (and preferably 30%)
Promotion of green energy investments by undertaking the procurement
process
Improving power supply quality, reliability and customer service 4
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3/1/2012
Reformed Electricity Sub-sector Structure
Reformed Electricity Regulatory Environment
Companies Act (Cap 486)
Nairobi Stock
Exchange Listing
Rules
State Corporations Act
KPLC
The New
Constitution of
Kenya
ERC Regulations
Cities
& Counties
Capital
Markets
Authority Act
Public
Procurement &
Disposal Act
Environment Grid Code
Management &
Coordination Act
Energy Act
2006
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Key Statistics
Installed capacity MW (May 2011) 1,599.9
Available Generation Capacity MW (May2011) 1,359.2
System Peak Demand MW to date* (10 th May 2011) 1,191.03
Forecasted unconstrained demand MW 1,290
Reserve Margin % (May 2011) * 5.1%
Energy Purchased 2009/10 (GWh) 6,692
Total Sales 2009/10 (GWh) 5,624
Sales % of Energy Purchased 2009/10 84.0%
Losses as % of Energy Purchased 2009/10 16.0%
Transmission and Distribution Lines, Circuit Length in
Kilometers (11kV to 220kV) 47,347
Number of Customers (May 2011) 1,720,868
Population Electricity Access 29%
Note: Reserve margin is thin at 5.1% as compared to the ideal of 15%. About
112MW of demand is not being met due to insufficient generation capacity,
currently occasioned by poor hydrology 7
Major Developments Underway in the Power
Subsector
Recent creation of REA, Ketraco and GDC
New Energy Scale Up Program targeting 1million new households
over 5 yrs at cost of KShs. 84 billion
Planned East African Regional Interconnection projects e.g.
Connection to Tanzania , Ethiopia and 2 nd Uganda line totaling 1,780
kms at an estimated cost of US$ 876 million
38 committed transmission projects totaling 3,697 kms and 2,421
MVA of substation capacity being developed within the country
between 2011 and 2015 at an estimated US$ 482 million,
Public private partnership framework to facilitate procurement of
new projects that augment capacity e.g. geothermal, thermal, wind
Green energy investments through Feed-in-Tariff
A total of 1,789.6MW of new generation capacity is being developed
between 2011 and 2015 out of which 857MW will be green energy
(hydro, geothermal and wind), 732MW of new thermal plant (MS
Diesel and coal) and 200MW of imports.
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3/1/2012
20 000
18 000
16 000
14 000
12 000
10 000
8 000
PROJECTED NATIONAL SUPPLY AND DEMAND
– 2011 to 2030
In 2020 Kenya must have at
least 40% population access to
electricity to reach the Vision
2030 target
Total Capacity (MW)
Peak Demand (MW)
8 226
Vision 2030
demand
Forecast of 8-10 %
17 764
12 141
10 097
15 066
Significant generation
potential
Geothermal(~ 7,000MW);
Hydro (~1,500MW);
Wind (~4,400 MW); and
TRANSFORMING DISTRIBUTION
INFRASTRUCTURE AND CUSTOMER SERVICE
DELIVERY
6 000
4 000
2 000
0
1,229
1,107
2010
2011
2012
2009/10
3 141
2 038
2014/15
4 659
3 474
6 768
2018/19 2023/24 2026/27 2029/30
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Potentially Coal and Gas.
• 15% Reserve Margin
Vision 2030 ~
Projected Demand
15,000MW
Source: Update of Kenya’s Least Cost Power Development Plan 2010-2030 9
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Distribution Expansion Plan Under
Implementation 2010/11 to 2014/15
To connect over 1 million new customers spread
countrywide every 5 years.
Construction of an additional approximately :
16,000 kms of Medium Voltage distribution lines,
1,000 MVA of distribution substations,
50,000 kms of LV distribution lines,
30,000 (3,000 MVA) of distribution transformers and
1 million service lines connections
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Distribution Infrastructure Investment Funding
Since 2005 to date, a total of US$ 480 Million (Kshs 38.4 billion) has been mobilised to
improve distribution infrastructure as follows:
PROJECT FINANCIER AMOUNT PROJECT COMPONENTS OBJECTIVES
Energy Sector Recovery Project
(2005 to 2012)
•IDA–US$111.5m
•EIB–Euro51m
•AFD–Euro25m
•NDF–Euro10m
•KPLC–US$34m
Kenya Electricity Expansion
Project (2010 to 2015) (IDA US
$102.2 mill , KPLC US$ 29.8mill)
Rights Issue Funding (2011 to
2013) (KPLC)
US$ 233
million
US$ 132
million
KShs. 9.2
billion
•Completed 25 substations,
1,250 kms of fibre optic, 540
kms of 66,33 & 11 kV
distribution lines, procured
406,000 static energy meters,
and installed Mt. Kenya Radio
System.
•Works ongoing at 26
substations, 465 kms of lines
and SCADA/EMS system.
To date, US $ 102 million has
been disbursed.
Procuring 26 substations, 1400
kms MV lines and prepaid
meters
Procuring 17 Distribution
substations, 4 transmission
substations, 300,000 prepaid
meters
•Enhanced access to
electricity
•Capacity
enhancement
•Supply reliability &
power quality
improvement
•Revenue
enhancement &
protection
•Enhanced customer
satisfaction
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3/1/2012
3 500 000
3 000 000
2 500 000
2 000 000
1 500 000
1 000 000
500 000
-
Total Number of Customers
Projected
2 000 000
1 720 868
3 000 000
In order to address critical electricity supply quality service challenges facing the
company the following new projects are being implemented in the period 2010/11 to
2015/16:
Project Objective Status
1. Distribution Master Plan Plan for comprehensive improvement Tendered
to the entire distribution network
2. Under grounding of electricity To reduce electricity line break downs In progress
lines
in urban centres as well as to enhance
public safety
3. Automation Extension of new technologies such as Pilot projects in
smart grid, so as to improve Nairobi and
performance of the electricity network Mombasa in
progress
4. Auto changeovers Installation of more efficient load
switching equipment
In progress
5. Dry Type Transformers and
Intruder Alarms
6. Joint Venture Transformer
Factory
Distribution Strategic Initiatives
Change from oil type to dry type
transformers that are less prone to
vandalism
Initiate manufacturing of transformers
locally in a joint venture arrangement.
Alarms being
installed
Tendered
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Project Objective Status
7. Reactive
Power
Compensation
8.Aerial Bundled
Conductors
To improve voltages and
harmonics through installation of
capacitors and other equipment.
Use of Aerial Bundled Conductors
in urban areas or where there is
heavy vegetation, as they require
much less maintenance work
In progress
Tendered and expected to cost
about Shs 3 billion
9. Concrete Poles Increased use of concrete poles in 26,300 concrete poles received
power line construction leading to from the supplier to date out of
fewer faults and less maintenance which 16,104 have been used
10. Change to
Smart Grid
System
Distribution Strategic Initiatives contd.
To realize a grid which has
communication linkages between
customers and system operators.
To improve service delivery,
efficiency and effectiveness in
operations. Will facilitate
leveraging of assets.
Prepaid metering being done with
adaptable meters, fibre optic
installation being done in some
parts of the system
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Customer Service Strategic Initiatives
Effectively collect revenue while providing efficient and high quality
customer handling services. KPLC has developed a core competence of
consistently achieving over 98% revenue collection as percent of billing
Action
Time Frame
i. Automatic Meter Reading (AMR) project Pilot 2008/9
Roll-out 2009/10 to
2014/15
ii. Prepaid Meters Pilot Rollout project to retrofit Pilot 2009/10
250,000 per year small to medium customers.
Install 200,000 meters per year for new Roll-out 2010/11 to
customers
2014/15
iii. Smart metering for 100,000 domestic and Roll-out 2010/11 to
small commercial customer
2014/15
iv. Use feeder metering and transformer ring Roll-out 2009/10 to
fencing to guide and monitor loss campaigns 2014/15
v. Improve supply to people settlements Roll-out 2010/11 to
2014/15
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3/1/2012
Threat
1. Electricity theft & vandalism of
infrastructure
2. Sufficiency of Generation Capacity
(delays due to protracted negotiations
and lack of guarantees).
3. Vagaries of weather including drought
and floods.
4. Affordability of power (new
connections, tariffs, fuel costs)
5. Right of Way for power infrastructure
(levies, encroachment, etc.)
MAJOR SUB-SECTORAL SECTORAL CHALLENGES
Mitigation
• Dry type transformers, intruder alarms,
relocation of transformers, etc .
• Community policing, public education
• Lobbying for stiff penalties for infrastructure
vandals
• Emergency generation
• Raising reserve margin
• Fast tracking some projects
• Projects under Feed In Tariffs policy
• Diversify generation sources
• Regional Interconnection
• Least Cost Generation Planning
• Promoting green energy sources
• Credit facilities to customers for connection
costs
• Public Education
• Engaging local authorities
6. Uncoordinated urban planning. • Engaging local authorities, Government urban
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planners and other infrastructural developers
FUTURE OUTLOOK
Strategies for meeting demand going forward are in place.
Support from development partners for network
infrastructural investment program in place – Kenya Power’s
contribution also in place.
Favorable operating environment is expected from a vibrant
economy.
Accelerated economic activity is expected from large scale
expansion of infrastructure.
Revised legislation to implement the new constitution will lead
to :
Better streamlining of stakeholder interests in power
supply
Clearer investment boundaries for players in the electricity
subsector
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THANK YOU
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