Kenya’s 22% power loss exposes costly grid problems for businesses

Kenya's electricity network is experiencing a 22 percent average loss of power, resulting in unreliable service and hindering the country's business competitiveness, industrial development, and investor confidence. A new policy brief from the Kenya Institute for Public Policy Research and Analysis (KIPPRA) highlights that aging infrastructure, insufficient maintenance, and financing issues contribute to the power quality issues.

According to KIPPRA's report, "Exploring Kenya’s Power Quality Landscape," Kenya ranked second in power system losses among 17 selected countries, trailing only Ghana. These power losses, which exceeded the recommended 10 percent limit from 2019 to 2023, could impact the reliability needed by businesses to maintain production, control costs, and expand their operations.

The report attributes higher power losses to the age and condition of electricity lines, asserting that older infrastructure is more prone to causing greater power losses than newer systems. Furthermore, the study underscores that Kenya's average annual power system losses consistently remained above the threshold between 2019 and 2023, fluctuating between 15 and 25 percent.

The report also notes that Kenya's power interruptions averaged three hours and 40 minutes during the same period, surpassing the EPRA's target of 3.5 hours. For industries that rely on stable electricity, these challenges highlight the critical need for updated networks and stronger infrastructure to accommodate rising electricity demand.

While the report does not quantify the total financial impact of power outages on Kenyan businesses, it underscores the detrimental effects of frequent interruptions on production, delivery delays, and potential reliance on alternative power sources. KIPPRA recommends prioritizing infrastructure maintenance, modernizing electricity systems, and increasing investments in the energy sector.

Implementing smart-grid technologies for better monitoring and fault detection, alongside financing through budgetary allocations and energy sector expenditure, are suggested solutions. The report also emphasizes the importance of climate-resilient infrastructure, energy-efficient technologies, and demand-management measures to reduce the strain on the grid.

Despite achieving 79 percent electricity access in 2023, Kenya must focus on improving the reliability and efficiency of its electricity network to support businesses, industrial growth, and its broader economic objectives.