Page 17 - AfrElec Week 22 2021

AfrElec MINIGRIDS AfrElec

Kenya to adjust minigrids regulations

to boost private investment

KENYA KENYA’S Energy and Petroleum Regulatory “The Authority shall consider the application,
Authority (EPRA) is considering proposals to and if the proposed retail tariff is higher than the
allow private companies to buy electricity from approved tariff of the Distribution Licensee, the
state-owned Kenya Power and then sell it on in Applicant shall be required to submit the pro-
what could be a major boost for the country’s posed margin that would be added to the bulk
minigrid sector. supply tariff in order to ensure efficient distribu-
The government wants the new rules to stim- tion operations,” say the regulations.
ulate investment in the off-grid sector, the Nation The new regulations seek to streamline the
reported. operation of minigrids with capacities of up to
The draft Energy (minigrid) Regulations 1 MW.
2021 would guarantee investors in minigrids the Such small, local grids are a key part of the
right to continue their operations even when the government’s efforts to bring power to 34,700
national grid reaches their areas sometime in the new households.
future. The government had committed to providing
They would be allowed to buy grid electricity universal access to electricity by 2022.
from Kenya Power and then be able to continue There are currently 106 minigrids in Kenya,
selling this electricity to their customers. with 14 owned and operated by private enti-
The new rules come as more of the country’s ties, while Rural Electrification and Renewable
minigrids use solar and wind energy, rather than Energy Corp. (REREC) owns 46, Kenya Power
the traditional diesel. (28) and communities (18).
Renewables energy has made minigrids Meanwhile, there are 180 new minigrids that
cheaper to run and less vulnerable to the high are being developed by private companies and
operational costs of fossil fuels. are currently in various stages of development,
The government wants to continue to pro- while the government is also planning 158 min-
mote investment in green minigrids. igrids under the Kenya Off-Grid Solar Access
“A minigrid operator operating under a Project (KOSAP) to be built and operated by
minigrid licence who has built a distribution REREC or Kenya Power.
system… may apply to the Authority for mod- The new minigrids developed by REREC are
ification of their licence to operate as a power built using funds generated from the Rural Elec-
distributor that purchases power in bulk from trification Levy, which makes up about 5% of the
the Distribution Licensee and resells that elec- total electricity charge.
tricity to the Consumers under an Energy Supply Kenya Power in February floated a tender for
Agreement,” the regulations read. retrofitting of its 21 diesel-powered minigrids in
“A minigrid operator may in the event of a Northern and North-Eastern Kenya to hybrid
main grid arriving at the minigrid area…apply solar and wind technologies to cut operational
to the Authority for modification of their licence costs.
to operate as a power producer selling to the Dis- The company bought 60 GWh of electricity
tribution Licensee,” say the regulations. from off-grid power stations in 2020, a mar-
In the new proposals, EPRA will also allow ginal increase from the 50 GWh it purchased in
applications by companies to charge more for 2019.™
electricity than what on-grid customers pay,
which will allow investors to turn a profit.

Week 22 03•June•2021 www. NEWSBASE .com P17