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Ease tough electricity use rules for factories – Business Daily

Ease tough electricity use rules for factories. PHOTO | POOL
The government should loosen its stance on the tough conditions set for electricity consumption levels by factories so that they can benefit from discounted night-time power tariffs.
The Kenya Association of Manufacturers argues that the rule requiring firms to exceed their average monthly power use over the past six months to qualify for off-peak tariffs has made it difficult for factories to benefit from cheaper night-time power charges.
Having a night power tariff will allow factories to operate 24 hours. Kenya’s high cost of power is too punitive compared with emerging industrial nations, pushing some manufacturers out of the country.
Some have opted to domicile their operations in China and India.
Easing electricity costs for Kenyan manufacturers will have long-term benefits that will accelerate economic growth.
A shift of power use away from the peak daytime periods also means the possibility of avoiding the costly option of using thermal-driven expensive independent power producers.
The sector is one of the highest energy consumers in Kenya, with over 50 per cent share of consumption.
By encouraging energy use at night, Kenya Power will cut some of the burden and costs, that include the oversupply on the power grid.
The move will also increase the contribution of the manufacturing sector to economic growth and will help the sector reinvent itself, especially after Covid-19.
But even as the government looks at lower night-time rates, manufacturers must start investing in green energy such as solar and wind.

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Author

Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.