Revenue from fees that the Kenya Electricity Transmission Company (Ketraco) charges for power carried on its transmission grid nearly doubled to Sh5.21 billion in the year ended June 30, 2024, buoyed by newly commissioned lines and substations.
Company disclosures show the revenue from wheeling services grew 75.6 percent, from Sh2.97 billion the previous year, helping the firm to post a net profit of Sh2.95 billion in the year to June 2024, from a net loss of Sh3.8 billion the previous year.
Wheeling charges are fees paid to a utility company or transmission system operator for the use of their electricity grid to transport power from a generator to a consumer. Ketraco bills Kenya Power for using its grid to transmit electricity to consumers.
Ketraco completed and commissioned the 132 kilovolts (kV) Isinya (Kajiado)-Namanga transmission line and the 220kV Turkwel-Ortum line and Ortum Substation and the 220/66kV Kimuka substation.
“The tariff increased due to additional commissioned transmission infrastructure projects,” John Mativo, the managing director of Ketraco said.
The wheeling tariff is approved by the Energy and Petroleum Regulatory Authority (Epra), just like other tariffs in the energy sector.
An increase in transmission lines and substations means more electricity being evacuated either on primary lines or alternative ones, translating to increased earnings for Ketraco.
The net profit for the year ended June 2024 was Ketraco’s first in three years, underscoring the impact of increased revenues from wheeling charges and other income sources.
The increase in the transmission network is meant to enhance reliability of power supply, reduce transmission losses, address cases of low voltage and enhance regional power trade.
Revenues from wheeling charges are set to jump further given that Ketraco will earn an estimated Sh800 million from evacuating 100Megawatts of electricity from Ethiopia to Tanzania.
Tanzania and Ethiopia signed a deal where Tanzania Electric Supply Company (Tanesco) will import up to 100MW of hydro power from the Ethiopian Electric Power (EEP).
The length of the import deal between Tanesco and EEP remains undisclosed, but will last for at least three years, giving Ketraco an estimated Sh2.4 billion in revenues from wheeling charges.
Ketraco is also set to commission at least nine lines and substations that are under construction in the current financial year, in what is further expected to drive its earnings from wheeling charges.
These include the 65 kilometre (km) Lessos-Kabarnet, 79km Nanyuki-Rumuruti, and 66km Kitui-Wote single circuit lines, the 400/220kV Mariakani substation, and the 69km 132kV Sondu–Ndhiwa (Homa Bay/Ndhiwa).
The projects are set to be commissioned by the end of this year. They are intended to further ease the load on existing lines besides connecting new ones and help reduce the possibility of outages linked to overloaded lines. They will also reduce the amount of electricity lost along the transmission network (system losses).
