KENYA Law and Practice Contributed by: Mary Waithiegeni Chege, Mary Anne Wachira and Joy Odhiambo, EMSI & Asssociates
A key development is the introduction of open access and eligible consumers, allowing large users meeting specified thresholds to procure electricity directly from licensed generators while using national networks upon payment of wheeling charges. This framework promotes competition, particularly for energy-inten- sive industries such as manufacturing and data cen- tres. 2.2 Electricity Imports and Exports Imports and exports of electricity are permitted, sub- ject to licensing by EPRA. Electricity imports account for 6.4% of the energy mix under a 200 MW PPA with Ethiopian Electric Power (EEP) and bilateral energy exchange contracts with Uganda Electricity Transmission Company Limited (UETCL) and Tanzania Electric Supply Company Lim- ited (TANESCO). All tariffs and ancillary costs in PPAs require prior approval by EPRA. End user pricing is influenced by pass-through charges, which are implemented to cover additional expenses incurred in the provision of the generation, transmission and distribution of elec- tricity that are not included in the base tariff. These include the Fuel Energy Charge, Foreign Exchange Rate Fluctuations Adjustments (FERFA), the Water Resource Authority (WRA) levy, inflation adjustments, and taxes and levies. 2.3 Supply Mix of Electricity The installed generation capacity as of June 2025 was 3,840.8 MW, comprising interconnected capacity alongside 603.8 MW of captive capacity and 45.0 MW of off-grid capacity. Captive power accounts for 15.72% of total installed capacity and is dominated by solar PV (49.76%) and bioenergy (26.80%). The current capacity mix is already highly renewable, exceeding 80%, with geothermal (940 MW), hydro (839 MW), wind (435.5 MW) and solar (210.3 MW) forming the backbone, alongside 564.8 MW of ther- mal and 200 MW of imports. Total generation stood at 14,472 GWh, with geothermal as the leading source, followed by hydro and wind.
Under the Kenya National Energy Compact (2025– 2030), the country targets a transition to a near-100% renewable energy system by 2030. This includes scal- ing up solar and wind to significantly larger shares of the mix, maintaining geothermal as the primary base- load source, and progressively phasing out thermal generation to minimal back-up levels. Imports are also expected to decline as domestic renewable capacity expands. While the current mix demonstrates strong alignment with renewable ambitions, key gaps remain in solar deployment, storage integration and the full There are currently no concentration limits regarding the percentage of electricity supply that is controlled by one entity, but the majority of consumers in Kenya are currently supplied electricity by Kenya Power. The principal laws governing market concentration limits include the following. elimination of fossil-based capacity. 2.4 Market Concentration Limits • The Energy Act empowers EPRA to review the electricity market on a regular basis, with a view to enhancing competition, improving efficiency, increasing reliability and security of supply, and improving the quality of service by all licensees. • While the recent Energy (Electricity Market, Bulk Supply and Open Access) Regulations do not set explicit limits on market concentration, they pro- mote competition through structural mechanisms by clearly defining a competitive electricity market framework with multiple participants across the generation, transmission, distribution and retail segments. They require non-discriminatory open access to networks, allowing new entrants to compete and reducing barriers to entry; licensees may contract with multiple suppliers, preventing dominance by a single entity. Consumer choice of supplier, transparent market operations and system operator oversight further mitigate concentration risks and support fair competition in the electricity market. • The Competition Act (Cap. 504) establishes the Competition Authority, which is mandated to inves- tigate any economic sector it has reason to believe may feature one or more factors relating to unwar- ranted concentrations of economic power. The
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