How State, agencies slept on the job as Kenya dipped into energy crisis

President William Ruto sparked a new debate after confirming that Kenya has been implementing load shedding due to insufficient electricity generation.

The President evoked memories of the late 1990s and 2000s, when industries and households had to grapple with power rationing, a crisis that gave rise to the privately operated, costly thermal power plants. 

But he also gave Kenyans a view into how the government and power sector agencies have, for more than a decade, slept on the job, whose failure in oversight and planning is now ushering Kenya into a crisis. 

“Between 5pm and 10 pm, we have to do load shedding. We have to shut off some areas to be able to power others because our energy is not enough,” Ruto said, when he spoke to Kenyans in Doha, Qatar. 

Opinions are divided as to whether there is load shedding in Kenya. On one side, sector players say what has been passed off as power rationing due to demand and supply dynamics are isolated instances, while the other side says there is already a crisis.

There is, however, consensus that Kenya needs more power production capacity and is ill-prepared with an empty power plant project pipeline.

A week ago, KenGen (Kenya Electricity Generating Company) reported that the country’s electricity demand had reached a record high, with a peak of 2,411.98 megawatts (MW) and the highest-ever daily energy consumption of 44,122.60MWh (megawatt hours) recorded on October 24, 2025.

Interestingly, the firm noted that no load shedding was reported in the period. “Notably, no load shedding was reported across the national grid during the record-breaking demand period, a testament to Kenya’s robust system management and investment in renewable capacity spearheaded by KenGen and supported by other sector players,” it said in a statement.

Isaac Ndereva, a billing expert and executive director Electricity Consumers Society of Kenya (Eclos), also noted that Kenya has not yet reached the point where it has started rationing power.   

“What has happened is that sometimes, due to maintenance, there are outages in some areas… power rationing affects a region. But when it is just a small area experiencing an outage, that is not rationing,” he said in an interview with a local radio station. 

“Rationing is scheduled, and you know when you will not have power… but what we see is intermittent loss of power. We have not reached that point.”

But then, the Energy and Petroleum Regulatory Authority (Epra) and Kenya Power have separately hinted at power rationing.  While Kenya has not yet experienced a full-blown crisis, there are telltale signs that power producers are struggling to keep up with demand.

These include increasing thermal power production and reinstating a thermal plant that had been retired.

The country is also relying heavily on imports from Ethiopia and Uganda to meet local demand, which power sector authorities have said saved Kenya from a full-blown power crisis.

Kenya’s installed power generation capacity stood at 3,192MW as of June 2025, according to the latest data from Epra. This is theoretically enough to meet the current peak demand of 2,411.98MW recorded a week ago. 

However, the system’s effective capacity – what can realistically be dispatched to the grid – is 3,082MW. Of the effective capacity, about 645MW is from variable renewable energy sources, such as wind and solar. The plants cannot always be relied on, especially during evening peak hours when the sun is setting and wind plants are not producing electricity at their optimal levels. 

This would mean that the power generating capacity that can be relied on at all times is at 2,547MW against the newly recorded peak demand of 2,411.98MW. 

“We are load shedding, that is the truth. We are not able to meet demand, especially during peak hours,” an industry source told Financial Standard.

Thermal plan

Switching off certain areas to cope with demand brings back memories of the 1990s and 2000s rationing.

Following a severe multiyear drought in the mid-1990s that resulted in significant drops in water levels at the hydropower dams, Kenya faced a power crisis and could not satisfy demand. 

It turned Independent Power Producers (IPPs) that were brought on board to set up thermal plants and help increase power production capacity and reduce reliance on hydro electricity.

The first thermal plant by Iberafrica was commissioned in 1997, followed by several other thermal plants in subsequent years. Power from these plants is expensive, but the government justified the high costs and contracts that span three decades, arguing that expensive electricity was better, even cheaper, than no electricity. 

The companies also signed lengthy power purchase agreements (PPAs), most of them 30 years, that also guaranteed the IPPs hefty payments even when they did not produce, as long as they had their power plants ready to dispatch to the grid. These clauses in the PPAs have been seen as skewed to IPPs and to the detriment of the consumer.

It was among the things that the moratorium on signing of new PPAs put in place in 2018 tried to cure.

  Following the drought and subsequent power rationing in the late 1990s and 2000s, the country intensified geothermal development. The increased exploration and drilling activities resulted in a geothermal boom between 2010.

Geothermal installed capacity grew from a meagre 58MW in 2003, when Kenya was deep in crisis, to 940MW in 2024. Some 331MW were added in 2014 

The Geothermal Development Company (GDC), set up in 2008 to derisk geothermal fields in the country, also drilled wells in Mengengai, Nakuru County, where one firm has already set up a 35MW plant and another two firms are nearing completion of two plants each with a capacity of 35MW. 

But the sector seemingly slackened off again after the stellar job in the early 2000s that yielded huge geothermal capacity. The fields that have been derisked by GDC moved at a slow pace, with the companies that had been competitively selected to set up plants at Menengai experiencing major delays.

The plants were expected to be operationalised in 2016, but nearly a decade later, only one power plant is operational. The project pipeline that has seen a consistent increase in new baseload capacity – power plants that can be relied on at any time to provide power – has now dried up. This is partly due to the seven-year moratorium, but also due to less intense exploration and development of geothermal fields.

Also, many of the power plants that have also started feeding the grid in recent years are largely solar and wind power, which are variable in nature, pointing to failure by the sector to ensure a diversified energy-generating mix. 

The combined installed capacity for solar and wind has grown from a negligible amount in 2019 to 645.8MW as of June this year. Due to their variable nature, these renewable sources tend to destabilise the grid.

Epra recently warned of the impact that solar and wind have on the grid despite having numerous advantages to the environment.

“VREs (Variable Renewable Energy Sources), while preferred for their renewable nature, increase the vulnerability of the interconnected network,” said Epra.  “The country’s electricity consumption patterns indicate high demand at peak (6pm to 9pm) and low demand during off-peak periods (10pm to 6am). This leads to load shedding at peak and curtailment during off-peak periods.”

Epra noted that Battery Energy Storage Systems (BESS) that store energy from solar and wind during off-peak hours for use at peak hours could partly solve the challenge. 

In its annual report to June 2024, Kenya Power noted that “the intermittent nature of solar and wind may hinder the system’s ability to meet peak demand, necessitating load management”. Following years of a lull in investments in power plants and the retirement of power plants whose contracts have lapsed, there has been a decline in Kenya’s installed power-generating capacity.

According to the 2025 KNBS Economic Survey, installed capacity decreased to 3,235.5 megawatts (MW) in December 2024 from 3,243.6 megawatts in 2023. Installed capacity had grown to 3,321.3MW in 2022. 

Commercial losses

The gap between installed capacity and peak demand is further narrowed by system losses. Out of every 100 units of electricity that Kenya Power buys from power producers, 21.21 units are lost due to transmission and commercial losses. 

The need for additional power supply to the national grid has been complicated by the lack of new power purchase agreements, stemming from a moratorium imposed by the Jubilee administration.

The freeze was aimed at giving the State time to put in place safeguards to protect consumers from inflated PPA costs that have been blamed for the high cost of electricity in the country.

The Kenya Kwanza administration had lifted the moratorium in early 2023, but the decision was overturned by the current Parliament, which reinstated the freeze in April 2023.

MPs cited concerns over inadequate safeguards to protect taxpayers from potential exploitation by private investors. The Energy Ministry has, over time, said it is in discussions to lift the freeze, stressing the urgency of expanding power sources to meet Kenya’s increasing energy needs.

As power production struggled to keep pace with demand, Kenya increased power imports from Ethiopia and Uganda.

According to Epra, in the year to June 2025, Kenya “obtained 10.60 per cent of its energy through electricity imports from Ethiopia, Uganda and Tanzania, up from 8.77 per cent in the previous financial year”. 

At 10.6 per cent, imports had the second largest share of the Kenyan market after Kengen, whose share stood at 58.97 per cent, while Lake Turkana Wind Power Plant had a share of 9.99 per cent.

Imports grew from one per cent in the year to June 2021 and have been taking market share from local producers, including KenGen, which had a share of 64 per cent and Lake Turkana Wind Power (LTWP), which had a share of 21 per cent at the time. 

Historically, Western Kenya has been plagued by frequent blackouts.

Other than high demand, the region has also suffered from poor transmission infrastructure, which has made it difficult to transport electricity from Olkaria or the Turkwell hydropower dam.