The government has unveiled sweeping new regulations for the electricity sector covering areas like market operations, competition and consumer choice.
The Energy (Electricity Market, Bulk Supply and Open Access) Regulations 2024 were published in a government gazette notice on Friday, as part of implementation of Kenya’s Energy Act 2019. They aim to “promote competition, efficiency and reliability” said the notice.
“The regulations provide for non-discriminatory open access to transmission or distribution system so as to enhance competition,” it added. Experts say the reforms could lead to lower prices and improved services, but benefits may take time to emerge.
Open access system
A key focus is opening up electricity networks owned by state utility Kenya Power and other operators. “A licensee shall provide non-discriminatory open access to its transmission or distribution system…for use by any licensee or eligible consumer,” the rules state.
This allows consumers to purchase electricity directly from other licensed generators and retailers, rather than only from their local utility. Increased competition between electricity suppliers and generators could put downward pressure on prices.
Market structure
The regulations also empower energy regulator EPRA to issue guidelines on Kenya’s electricity market structure and transition arrangements.
“The electricity market shall consist of a wholesale market and a retail market,” according to the gazette notice. It said EPRA will designate an operator for the wholesale market which involves trading between generators and retailers.
New rules of play
In addition, the rules spell out roles and responsibilities for different electricity market players like generators, transmitters and distributors.
They cover key aspects including market balancing, pricing, governance and dispute resolution.
Bulk supply norms
Norms for bulk supply of electricity between license holders are also prescribed. This includes minimum requirements to be indicated by applicants.
As per the notice, “No consumer shall access bulk energy for resale. A consumer accessing bulk supply and who wishes to resell shall apply for a retail license.”
Boost for renewables
The rules also point to provisions like feed-in-tariffs that can encourage renewable energy. “This could increase Kenya’s energy sustainability.”
“Grid stability challenges arising from intermittent renewable energy sources need to be managed carefully.”
Clearer dispute resolution
In a major departure from the past, the new regulations also provide for disputes in the sector to be referred to energy regulator EPRA instead of the energy ministry.
