Before April comes to an end, allow me to quickly talk about the Electricity Sector Association of Kenya (ESAK) Commercial and Industrial (C&I) Conference and exhibition 2025.  This year’s conference themed ‘driving reliability through C&I’ and held on 16^th and 17^th April was a build up to last year’s conference theme on ‘Accelerating C&I installations.  Being the 2^nd edition, the organizers targeted to bring together at least 400 policy makers, technology innovators, power sector utilities, C&I customers, among other participants in a 2-day discussion to chart the way forward on the future of C&I in Kenya.

If you have been following local news closely or is abreast of power sector developments, you maybe aware that as of 30^th March, Kenya’s electricity reserve margin had shrunk to just 4 MW against operations best practise of at least 10% of the peak demand which was reportedly at the time around 2,316 MW. During the conference opening remarks, Kenya’s Energy and Petroleum Regulatory Authority (EPRA) lauded the role C&I have played in responding to the security of energy in supply in the country amidst shrinking generation capacity following a Parliamentary freeze on national utility Kenya Power’s signing of new Power Purchase Agreements (PPAs) since 2018. This ideally means new generation plants without PPAs could not come online over the period and consequently may be interpreted to imply no incentive for investments in generation capacities especially by Independ Power Producers whereas electricity demand has been growing. But going beyond captive power generation which is where C&I support came in thanks to their installations which are estimated to have grown to at least 600 MW according to the EPRA Biannual 2024/2025 statistics report, this year’s conference was organized to recognize the important role that captive power plants can play towards making the grid reliable and stable while also looking at potential opportunities that will result from wheeling services (beyond self-supply).

Captive generation refers to generation of electricity for self-consumption. In Kenya, industries or SMEs typically invest in own solar systems to power their production or operations mainly to reduce on electricity bills but also to achieve reliable electricity supply which is a key driver of their processes. Captive wheeling is where such self-consumption plants use existing power transmission and/or distribution networks at a fee in other words Open Access of the grid network. In Kenya, there currently exist draft Energy (Electricity Market,  Bulk Supply and Open Access) Regulations which are yet to be gazetted. In more advanced electricity markets such as the US where Open Access took force in the mid-1990s, this is cited as having created opportunities for improvement of the electricity markets by respective independent system operators across the states. B-2-B opportunities is one of the foreseen opportunities in Kenya where industries or large commercial customers might be able to directly purchase electricity in bulk from generators and have it wheeled across the existing grid networks to their premises at an overall cost which might be cheaper than buying electricity from the utility for which additional charges e.g. fuel levy charges are often passed down to electricity customers. It is worth noting that Kenya currently has one of the highest electricity tariffs in the region with cases of manufacturers shifting their operations to other jurisdictions where electricity cost is relatively cheaper. It is also worth noting that the quality of the electricity supplied is also rather unreliable with Kenya ranking second after Nigeria when it comes to back-up diesel generators usage. These and more are part of why we must address the core issues of affordability, reliability and stability of electricity supply as a country. Hence the 2025 C&I conference was an important forum to first reach common understanding of what needs to be done by relevant stakeholders and exchange on best practises.

Some of the key take-aways from the 2025 conference deliberations:

1. The preparation of implementation framework with minimum conditions required to address the technical challenges likely to be caused by open access in readiness for gazetting of Energy (Electricity Market, Bulk Supply and Open Access) Regulations is necessary now more than ever before. Since open access presents opportunity for B2B trading, clear guidelines on wheeling tariffs must be set.
2. There needs to be clear compensation frameworks for network support services such as reactive power, frequency and voltage control, operation spinning reserves that might be provided through C&I.
3. Regulatory incentives e.g. through Net Metering and Time of Use tariffs must be well structured, and performance evaluated in relation to intended policy objective. Incentive restructures should be done where expected outcome is not being realized in this case helping to address the curtailment of geothermal or wind resources in the night while also generating revenue for the utility given the existing nature of PPAs is take or pay – the cost of which is ultimately passed down to electricity customers, while at the same time incentivizing industries to have additional production after 10 pm to 6 am in the morning at half the price of electricity during normal hours.
4. There is potential for C&I to contribute to regional power trading e.g. the Eastern African Power Pool for which wholesale day ahead markets set to be launched in May this year. Currently, most electricity trading happens via bilateral agreements between utilities with Kenya currently trading with Ethiopia, Tanzania and Uganda thanks to the three interconnectors running between the three countries. To achieve a full regional power trading pool, there is first need for harmonisation of regulations, geopolitical architecture in relation to power systems and standardization of grid technical requirements across pool participants to enable smooth transitioning from bilateral power trading into a fully functional regional power market.
5. Collaboration between public and private actors is key to enhance reliability. Innovation, modernisation, digitalisation and safety of grid assets offer avenues for collaborating. In relation to C&I captive generators, the issue of safety must be looked at even more closely since generation is now closer to the consumers who sometimes may not be as technically equipped to operate electrical generation infrastructure.
6. Customer awareness is often under looked yet critical when engaging C&I on energy efficiency or electrification of industrial processes.
7. The Energy (Energy Management) Regulations of 2025 offer opportunity for establishment of Efficiency Trading Schemes and Energy Efficiency Energy Service Companies (ESCOs), among other incentives.

Curious to know what 2026 C&I conference might look like? The organizers hinted taking it regional which I think is the way to go now that we are looking more and more to opportunities in regional power trading.

For comprehensive conference proceedings, check out ESAK website and social handles.

***Part of this post originally written by author on Linked-In on 18th April 2025.