24 hour businesses set to boom as cheaper power at night becomes a reality

Business premises operating 24 hours in Kenya are set to boom after cheaper power at night is set to become a reality.

Large businesses and manufacturers who shift their operations to late night hours will from next month benefit from cheaper power by up a third.

The Energy Regulatory Commission (ERC) said it would from December 1 offer discounted tariffs for commercial and industrial power users who operate from 11pm to 5am, a window within which demand is low.

“The introduction of the night tariffs will help promote commercial and industrial growth in Kenya while maximising on the surplus energy available at off-peak hours,” said ERC acting director-general Pavel Oimeke.

ERC hopes to maximize power distribution since the country consumes less than half the peak power demand (currently 1,727 megawatts) between midnight and 5am.

Commercial consumers whose bills are metered at above 11 kilovolts (kV) by Kenya Power will decrease by a third to Sh5 per kilowatt hour (kWh) from Sh7.50 per unit.

Similarly, commercial users who are metered at between 450 volts to 11 kilovolts will pay Sh7 per unit instead of Sh9.20.

The plan, which has been on the pipeline for a decade, was arrived at on Monday after ministry officials met Kenya Association of Manufacturers and Kenya Private Sector Alliance.

It comes at a time when the country is moving to add 300 megawatts from the Lake Turkana wind power project, which is complete but due to delays in constructing a transmission line connecting it to the national grid the country is yet to enjoy cheaper power from the national project which cost taxpayer’s Sh70 billion.

The ERC, however, said the discount offered to manufacturers ought not to eat into the margins of Kenya Power, hence the pilot launch to determine its viability.

The shift by manufacturers to night-time production is expected to ease demand pressure during peak hours, which often force Kenya Power to switch on the expensive diesel generators to stabilise the supply pushing up prices of electricity..

The energy regulator hopes the low cost of power at night will translate to cheaper commodities which will benefit Kenyans,.