Washington Akumu
6 October 2008
interview
Nairobi — A three-day National Energy Conference starts on Tuesday against the backdrop of runaway petroleum and electricity prices.
Daily Nation business editor WASHINGTON AKUMU sought out Energy minister Kiraitu Murungi for his views. Here are the excerpts.
Q The conference coincides with a number of challenges in the energy sector. What will it achieve?
A. The conference was planned long before the manifestation of the challenges.
We want to talk to each other on the best policy options and business models for increasing the share of contribution of renewable sources in the energy portfolio, securing petroleum and coal supply options and strengthening power generation, transmission and distribution.
Q. Pricing has become a major issue in the sector, especially for electricity. What are some of the options the ministry is considering to reduce the burden?
A. The ministry is addressing current energy challenges through the expansion of generation capacity, reinforcement of the power transmission and distribution network and extension of the national grid to rural areas and the establishment of isolated power stations in areas which are uneconomical for grid extension.
It is also providing solar power in public institutions in the arid and semi-arid areas. We have also identified geothermal as one resource with the potential to reduce power costs substantially.
Q. You have been strident in demanding that oil vendors reduce their prices in tandem with the fall in the price of international crude. Beyond the exhortations, do you have a plan?
A. We do not believe that these prices reflect the actual costs of importation. Despite recent falls in international crude prices, consumers in Kenya continue to pay pump prices for kerosene, diesel and petrol which reflect crude oil prices of more than $120 per barrel.
This excessive profiteering by oil companies is totally unacceptable, as their argument that retail pump prices will come down as soon as they exhaust high cost stocks is not sustainable.
I have asked the Energy Regulatory Commission to investigate the feasibility of introducing an element of price control into the local market.
Q. What about plans to import oil from Sudan?
A. The plans are at advanced stage. A government delegation visited the country recently. The finer details are being worked and will be shared with the public once we finalise.
Q. With environmental degradation and our paucity of big rivers, our dependence on hydro-power is no longer tenable. What next?
A. You are right; the reliance on hydro-power is not the way of the future. Alive to this fact, the ministry is exploring other sources of energy.
New sources will be found through exploitation of geothermal power, coal, renewable energy sources, and connecting Kenya to energy-surplus countries in the region.
Q. There has been a proposal to have a separate unit for distribution of electricity so that KPLC is freed to concentrate on customer service. What is the timetable for this?
A. Under Vision 2030, the government plans to separate power generation from distribution. In line with these several studies are being undertaken.
But as we await for the outcome of the study, a comprehensive corporate recovery programme to bring KPLC back to sound operational efficiency is ongoing.
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