Written By: Faith Jemosop
Kenya is set to double its electricity imports from Ethiopia by 2026. This initiative aims to address the country’s growing energy demands and mitigate the risks associated with domestic power generation shortfalls.
Rising Energy Demands and Domestic Shortfalls
Kenya’s electricity demand has been on an upward trajectory, with peak demand reaching 2,282 megawatts (MW) in October 2024, up from 2,242MW in September of the same year. However, the country’s local generation capacity has struggled to keep pace, leading to a shrinking reserve margin that has dipped below the recommended 20-35% range, exposing the nation to potential blackouts during maintenance or unexpected outages.
The situation has been exacerbated by a decline in output from thermal plants, notably the removal of KenGen’s 60MW Muhoroni Gas Turbine from the grid.
A ban on new Power Purchase Agreements (PPAs) since 2021 has stalled the onboarding of new generation plants, further constraining local capacity.
Ethiopia: A Reliable Energy Partner
To bridge the supply gap, Kenya initiated electricity imports from Ethiopia in December 2022, starting with 200MW under a 25-year Power Purchase Agreement (PPA). This agreement is set to double to 400MW by 2026, leveraging the 1,045km Sodo Moyale Suswa High Voltage Direct Current (HVDC) transmission line that connects the two countries.
Ethiopia’s surplus hydroelectric power, primarily from the Grand Ethiopian Renaissance Dam (GERD), offers a cost-effective alternative, with Kenya purchasing electricity at 6.5 US cents per kilowatt-hour. This rate is significantly lower than the tariffs charged by Independent Power Producers (IPPs) in Kenya, some of which reach up to $1.60 per kilowatt-hour.
Impact on Kenya’s Energy Landscape
The increased imports have already made a notable impact. In 2023, Kenya imported 668.07 million kilowatt-hours (kWh) of power from Ethiopia, up from just 12.61 million kWh in 2022. This surge positioned Ethiopia as Kenya’s largest external electricity supplier, accounting for nearly three-fourths of the 917.8 million kWh imported that year.
Also read: Kenya’s Renewable Revolution with Toshiba ESS Geothermal Energy
The imports have also contributed to a reduction in the cost of electricity supply in Kenya, with the Energy and Petroleum Regulatory Authority (EPRA) reporting a decrease in the average bulk purchase cost. Furthermore, the integration of Ethiopian power has provided a buffer against domestic generation shortfalls, helping to maintain grid stability and avoid load shedding.
Challenges and Considerations
Despite the benefits, the increased reliance on imported power has led to some challenges. EPRA reported that geothermal power producers were compelled to curtail their output by 511.72 GWh in the six months to December 2024 to accommodate the higher imports. This curtailment, more than double the 236.21 GWh in the same period of 2023, underscores the need for careful balancing of domestic and imported energy sources.
While the current PPA with Ethiopia offers favourable rates, the agreement includes a clause allowing for tariff renegotiation after five years, starting in 2027. This provision introduces an element of uncertainty regarding future electricity costs.
Regional Energy Integration
Kenya’s collaboration with Ethiopia is part of a broader strategy to enhance regional energy integration. The Sodo Moyale Suswa HVDC line not only facilitates imports from Ethiopia but also positions Kenya as a potential energy transit hub. Plans are underway to connect with Tanzania through the Isinya Singida High Voltage Power Line, further strengthening the East African Power Pool and promoting cross-border electricity trade.
Also read: Ghana Positions Itself as Africa’s Energy Supply Hub
As Kenya continues to navigate its energy challenges, the increased imports from Ethiopia offer a viable solution to meet immediate demand and stabilize the grid. However, long-term energy security will require a balanced approach that includes investments in domestic generation capacity, diversification of energy sources, and strategic regional partnerships.
The government’s commitment to expanding renewable energy projects, such as geothermal and wind, alongside the integration of imported power, will be crucial in ensuring a sustainable and reliable energy future for Kenya.
