Jim India

Jambo @kenyanpundit Here is a perspective from the energy sector. Kenya is largely a daytime economy with a relatively low load factor. Electricity demand rises sharply during business hours and in the evening but many industrial and commercial loads shut down at night. This means the power system experiences short periods of high demand separeted by long periods of relatively low consumption. Now in the case of (egg - hen who came first) let's see what industrialisation does When kenya industrializes evenly - let's say port loading and offloading in mombasa, steel in taita taveta, cement in nanyuki, mining in isiolo, data centres in nyahururu, cold rooms in wajir, plastic recycling in turkana, green house farms nakurur, egg incubators in kisumu, airports all over and even mama mboga all operating 24 hours, they increase the base load evenly. When base load increases the electricity demand remains relatively high throughout the 24 hour period. Since all these activities are going on throughout the day & night the system load factor is well utilised in both generation, transmission, distribution & consumption. Why is this important? Before kplc tell me and you the price of 1 "token" unit is 25 shillings, they have to pay someone else an amount. This someone else could be KenGen or Atwoli, but this is what happens. KPLC knows that in the next 1 month they will need 60 units to serve me and you, but when they call kengen they don't ask for 60, they ask for 100 units, why? Because 1. KenGen is in Sondu and I am in butere, if kengen releases 100 units, because physics happens (technical losses), only around 90 units will get to butere, but kengen has already forwarded kplc an invoice of 100 units, then Atwoli's cousin has a house next to mine in butere, and because he knows people he does not pay kplc for whatever he will consume, so KENGEN releases 100 units, 10 get lost along the journey, I consume 30 units, you consume 30 units, Atwoli's cousin consumes 30 units but kplc does not know where Atwoli's house is, neither do they have an account with him. So kplc sit down, look at kengen's invoice, look at my account, look at your's and say, these 2 will pay for 100 units, so the cost of my 30 units and your 30 units is raised to cover for 100 units. 2. When KPLC call Kengen and ask for 100 units, kengen has to pay engineer Odhis and his expensive mercedes to maintain the generators in sondu to be able to deliver 100 units at any given time. But it happens that this time, you travel to lesotho and I go visit my relatives Tororo so we won't consume our usual 30 units each, but Atwoli's cousin is not going anywhere, so he still consumes his 30 units, So kplc get nothing from me, nothing from you, but remember Engineer odhis has a mercedes that needs Vpower so Kengen will tell kplc, whether you sell this power or not, odhis needs to be paid to maintain the generators at a capacity that can generate 100 units so we will send you an invoice on monday as usual, it will not be a huge figure but it has to be paid. In these 2 basic scenarios, KPLC have 3 basic challenges, The first 1 is to ensure that there are many KENGENs allover so that when the nearest kengen releases 100 units in sondu, rather than loosing 10 to butere, they loose 3 or 4 to Kisumu. Then another Kengen in kakamega can release 100 units to butere and lower the units lost. The second is to ensure they find Atwoli's cousin house and give him an account so that at the end of every month after selling 90 units they have 3 accounts and now instead of me and you paying for what Atwoli's cousin consumed, we only pay for what we consumed plus the 3 or 4 that was lost. The third is to ensure that KPLC find a way of convincing me to employ someone to pump water to my farm, install an air conditioner in butere, talk to my sacco members in butere so that we can buy incubators to hatch eggs through out the year, what this does is that it compensates for the time when I'm off to Tororo, When these measures are implemented, the overall load factor improves, a higher load factor allows KPLC and kengen to recover fixed generation and transmission costs over a larger volume of electricity sales, leading to more efficient financial arrangements and potentially lower long-term electricity costs per unit, when the cost goes down, more industries either join the grid or the existing ones ramp up production and lower cost of product. When the cost of product is lowered, I can go to my sacco, pick day old chicks, travel to kakamega farmers agency and collect high quality feeds ata a lower cost, feed my birds to maturity, collect eggs, sell back to my sacco members, to eshishebu primary, shiatsala market and by doing so, lower the cost of eggs on a larger scale.