NEXUS BETWEEN SYSTEM LOSSES AND COST OF POWER IN KENYA: A COMPARATIVE ANALYSIS OF KENYA, UGANDA AND TANZANIA
Abstract
Background of the study: Power generation in Kenya has rapidly grown in the past decade. In 2021, generation capacity stood at 2,984MW, with a peak demand of 1,993MW compared to installed capacity of 1,473MW in 2010 and a peak demand of 1,068MW. Vision 2030 aspires to universal access to electricity by 2030, but in 2013 the government revised the target year to 2022 to accelerate the achievement of this goal. Renewable energy generation has shown significant improvement in the total generation mix. The cost of energy determines the competitiveness of goods manufactured domestically to those of imports. High energy costs impede domestic wealth creation, creation of employment and balance of trade.
Problem statement: In Kenya economic activity is crippled by shortages in energy supply alongside the inherent disruptions. Despite the immense geothermal prominent role in reducing the cost of power, the whole effort remains a pipe dream. The impact of increase in power production, transmission and distribution is yet to be felt as the cost of power is still high. The pricing of electricity is affected by various factors with tariffs calculation being pegged on the fuel and non-fuel components. The cost of electricity is also affected by fuel costs which vary with time resulting in high power tariffs. Much of the attention has been on the tariff and weather variations and how they affect the cost of power. However, little focus has been directed on the system losses as an actor to high cost of power. It is against this backdrop that this paper is premised upon. The paper has critiqued on previous articles done by scholars and employed desk statistics from annual reports.
Conclusion and Recommendations: The paper recommends that there is need for converting urban clientele that currently use LPG to power electric stoves by offering ultra-low time-of-use tariffs for cooking in order to increase on consumer bandwidth and revenue generation. The paper also recommends on the government promoting the uptake of electric vehicles as it has the potential to increase demand of power and increase on the revenue. There is also need for load balancing measures to ensure that each of the three phases of the distribution feeder are equally loaded in order to curb the technical system losses. Installations of specific equipment, sensors, and grid structures is encouraged for efficient detection of NTLs. Intelligent management principles could also contribute effectively to a decrease in technical losses. Technical teams to supervise the meters should be implemented and policies formulated on dealing with cases of power theft. This should be accompanied by installation of tamper-proof meters, reduction of the average number of consumers per transformer and by upgrading of electricity meters to use Smart card technology.
Key Words: System Losses, Technical Losses, Non-Technical Losses, Cost of Powe
References
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Gaur, V., & Gupta, E. (2016). The determinants of electricity theft: An empirical analysis of Indian states. Energy Policy, 93, 127-136.
Ghosh, R., & Kathuria, V. (2014). The transaction costs driving captive power generation: Evidence from India. Energy policy, 75, 179-188.
Grainger, C. A., & Zhang, F. (2017). The impact of electricity shortages on firm productivity: Evidence from Pakistan. World Bank Policy Research Working Paper, (8130).
Inan, H., Batson, J., & Scheibe, M. (2014). Systems loss reduction. TechAdvantage, March.
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Moyo, B. (2012). Do power cuts affect productivity? A case study of Nigerian manufacturing firms. International Business & Economics Research Journal (IBER), 11(10), 1163-1174.
Nagi, J., Yap, K. S., Tiong, S. K., Ahmed, S. K., & Mohamad, M. (2009). Nontechnical loss detection for metered customers in power utility using support vector machines. IEEE transactions on Power Delivery, 25(2), 1162-1171.
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Nyanzu, F., & Adarkwah, J. (2016). Effect of Power Supply on the performance of Small and Medium Size Enterprises: A comparative analysis between SMEs in Tema and the Northern part of Ghana. MPRA Paper 74196, University Library of Munich, Germany.
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Office of Gas and Electricity Markets (Ofgem). 2009. Electricity Distribution System Losses. Non-Technical Overview. Paper
Oseni, M. O., & Pollitt, M. G. (2015). A firm-level analysis of outage loss differentials and self-generation: Evidence from African business enterprises. Energy Economics, 52, 277-286.
Owusu, P. A., & Asumadu-Sarkodie, S. (2016). A review of renewable energy sources, sustainability issues and climate change mitigation. Cogent Engineering, 3(1), 1167990.
Oyinlola, M. A., Adedeji, A. A., Bolarinwa, M. O., & Olabisi, N. (2020). Governance, domestic resource mobilization, and inclusive growth in sub-Saharan Africa. Economic Analysis and Policy, 65, 68-88.
Park, D. W., Kim, Y. H., Song, H. G., Ahn, J. M., Kim, W. J., Lee, J. Y., ... & Park, S. J. (2012). Outcomes after unrestricted use of everolimus-eluting and sirolimus-eluting stents in routine clinical practice: a multicenter, prospective cohort study. Circulation: Cardiovascular Interventions, 5(3), 365-371.
Parmar, J. (2013). Total Losses in Power Distribution and Transmission Lines. Retrieved from https://electrical-engineering-portal.com/total-losses-in-power-distribution-and-transmission-lines-1
Pasha, H. A., Ghaus, A., & Malik, S. (1989). The economic cost of power outages in the industrial sector of Pakistan. Energy Economics, 11(4), 301-318.
Queiroz, L. M., Roselli, M. A., Cavellucci, C., & Lyra, C. (2012). Energy losses estimation in power distribution systems. IEEE Transactions on Power Systems, 27(4), 1879-1887.
Raminfard, A., Shahrtash, S. M., Herizchi, T., & Khoshkhoo, H. (2012). Long-term load balancing program in LV distribution networks. In 2012 IEEE International Power Engineering and Optimization Conference Melaka, Malaysia (pp. 220-224). IEEE.
Schneider, K. P., Fuller, J. C., Tuffner, F. K., & Singh, R. (2010). Evaluation of conservation voltage reduction (CVR) on a national level (No. PNNL-19596). Pacific Northwest National Lab.(PNNL), Richland, WA (United States).
Scott, A., Darko, E., Lemma, A., & Rud, J. P. (2014). How does electricity insecurity affect businesses in low and middle income countries. Shaping policy for development, 1-80.
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Published
2022-10-17
How to Cite
Mudany, J. O., Owuori, P. J., Mudany, M. A., & Ogutu, M. (2022). NEXUS BETWEEN SYSTEM LOSSES AND COST OF POWER IN KENYA: A COMPARATIVE ANALYSIS OF KENYA, UGANDA AND TANZANIA. African Journal of Emerging Issues, 4(10), 25 - 45. Retrieved from https://ajoeijournals.org/sys/index.php/ajoei/article/view/335
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