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Electricity Users in Kenya May Soon Have the Option to Purchase Token Meters From Authorised Dealerships
Electricity Users in Kenya May Soon Have the Option to Purchase Token Meters From Authorised Dealerships
Oct 23, 2024 pm 03:24 PM
The move aims to provide consumers with greater flexibility in connecting to the power grid without being limited to purchasing meters from the state-owned utility.
Electricity users in Kenya may soon be able to purchase token meters from authorised dealerships, breaking Kenya Power's monopoly on the market.
The move is expected to give consumers more options when connecting to the power grid, as they will no longer be limited to purchasing meters from the state-owned utility.
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The Africa Smart Meter Association has raised concerns that Kenya Power's control over token meter tendering has stifled the growth of local manufacturers.
Industry representatives argue that just as the e-Tims rollout has diversified the market, Kenya Power should set standards and authorise select dealers to improve access for consumers.
During a Senate energy committee meeting on Tuesday, the association's Secretary General James Ngomeli said that currently, less than 10 per cent of the smart meters used in Kenya are locally manufactured.
He said the situation favours assembly plants that import parts rather than encouraging local manufacturing.
"However, we are optimistic that this figure can be increased to 60 per cent if a strong business case is created, like what has been achieved with laptop assembly plants," Ngomeli added.
Local manufacturers said the current environment makes it almost impossible for them to invest further in the sector.
"There is a big problem with the lack of approved smart meter manufacturing standards by the Energy and Petroleum Regulatory Authority (EPRA), which creates uncertainty for producers," Ngomeli added.
He said assembling smart meters requires huge investments, yet high interest rates make it hard to compete.
Another major concern raised was the absence of approved manufacturing standards for smart meters from the Energy and Petroleum Regulatory Authority (EPRA). This lack of clarity creates uncertainty for producers looking to enter the market.
Long-term agreements
Manufacturers are now pushing for long-term framework agreements with bulk off-takers such as Kenya Power to ensure a steady demand for locally produced smart meters.
Currently, Kenya Power procures between 800,000 and 1 million meters annually to cater for the growing demand for new customer connections and the expansion of the prepay metering system.
The association's chairman Charles Kaloki said there is a need for collaboration between universities, research institutions and companies like Kenya Power to promote the use of locally produced components, which will ensure the sustainability of the industry.
Nairobi Senator Edwin Sifuna asked about the challenges local producers face in meeting Kenya Power's demand.
In response, Kaloki said both the utility firm and EPRA are yet to create localised standards tailored for local manufacturers.
"There is no reason why they cannot accredit dealers and open up the space for more players," he said.
Kaloki noted that by increasing local production of smart meters, the government and utility companies can drastically reduce reliance on imports.
This could lower costs associated with tariffs, shipping and currency exchange rates by up to $100 million (about Sh12.9 billion), making smart meter deployment more affordable.
While there are currently four assembly plants operating in the country, the market remains competitive and to some extent secretive.
The intense competition for Kenya Power tenders leads many players to keep their business strategies confidential, stifling collaboration and broader participation in the industry.
Despite these challenges, the association is hopeful that opening up the market will lead to innovation and better opportunities for local manufacturers.
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