Kenya has reduced expensive thermal power on the national grid to avoid burdening consumers with steep electricity prices even as fears deepen over Kenya Power’s ability to meet a fast-rising demand.
An analysis of electricity supply data shows Kenya Power tapped 646.46 million kilowatt-hours (kWh) of thermal power, an equivalent of 8.1 percent of the total electricity bought from producers in the six months ended June 2026. This was a drop compared to the 727.16 million kWh (10 percent) tapped in the same period last year.
The drop in the costly thermal power coincided with a jump in electricity imports to 973.8 million kWh, or 12.3 percent of the total electricity available to Kenya Power, up from 743.92 million kWh, or 10 percent in the six months to June 2025. Kenya Power has increasingly leaned on Ethiopia to avoid tapping more of the costly thermal power.
Reduced usage of thermal power has helped consumers avoid steep monthly electricity bills at a time when Kenya Power is struggling to meet a fast-rising demand.
Kenya Power recently revealed that it has been forced to ration power when demand peaks in the evening to ensure a balance in supply and demand and avert a collapse of the grid.
An increase in consumption has left Kenya Power with the twin headaches of meeting demand without hitting consumers with steep electricity bills.
Electricity prices marginally rose last month, underscoring the impact of the reduced use of thermal power despite a rise in two of the biggest variables used to determine power prices.
For example, the price of 200kWh of power slightly rose to Sh5,658.80 last month from Sh5,648.30 in July, while the cost of 50kWh marginally increased to Sh1,289.47 from Sh1,286.64 in the same period.
A rise in the fuel surcharge and forex adjustment— the two biggest variables in monthly power bills—triggered the marginal increase in electricity prices last month. The power bills could have been significantly higher last month had Kenya Power tapped more thermal power.
Fuel surcharge, technically called Fuel Cost Charge (FCC), and forex adjustment are the two biggest fluctuating components in the monthly prices of electricity. The biggest component is the base tariff, which is reviewed every three years and varies across different consumption bands.
FCC covers the cost of using heavy fuel oil and diesel to generate electricity by thermal power plants, while forex covers power purchase agreements and loans denominated in hard currencies like US dollars.
Thermal power is the costliest source of electricity in Kenya, with a kWh costing $0.27 (Sh35.09) on average last year compared to $0.07 for a unit of imported hydropower and $0.025 for a kWh of locally-produced hydropower.
Increased imports from Ethiopia were integral in increasing the amount of electricity supplied to Kenya Power by eight percent to 7.88 billion kWh in the six months to June this year.
High usage of thermal power coupled with costly fuel can significantly hit consumers with steep monthly power bills, a scenario that the government is keen to avoid and contain public outcry over costly living ahead of next year’s General Elections.
Kenya Power has since opted to tap more hydropower from Ethiopia and plug the gap that could have otherwise been filled by the expensive thermal power, especially in the evening when demand peaks.
The utility has a 25-year Power Purchase Agreement with the Ethiopia Electric Power to import 200Megawatts (MW) at peak and 65MW during off-peak, which will rise to 400MW and 150MW from December this year.
Additionally, Kenya Power has an electricity exchange deal with Uganda Electricity Generation Company and Tanzania Electric Supply Company Limited, where the net-importing utility pays the other.
