Kenya: New energy regulations to open up electricity retail market

Kenya’s electricity retail market is on the brink of a major transformation with the recent gazetting of the Energy and Petroleum Regulatory Authority’s new Energy Regulations 2024. This move is expected to open up the market to additional players, providing consumers with more options and potentially leading to lower power prices. Martin Chomba, the Chairman of the Petroleum Outlets Association of Kenya, joined CNBC Africa to discuss the implications of these regulations and the potential outcomes for the energy sector in the country. Chomba highlighted the significance of breaking the monopoly that has long existed in the power transmission sector in Kenya. He emphasized that the call for opening up the market stems from the need to address high power prices that have previously driven industries and plants out of the country. The aim is to introduce more players into the energy sector to promote efficiency, reduce prices, and attract investors looking for energy opportunities in Kenya. By offering consumers a wider range of energy providers to choose from, the market is expected to become more competitive, resulting in improved service quality and lower tariffs for end users. Chomba pointed out that as Kenya continues to industrialize rapidly, the demand for energy is escalating, making it crucial to have a diversified and efficient energy supply chain in place. The regulations are seen as a step towards creating a stable and attractive environment for both local and foreign investors, ultimately benefiting the economy and consumers alike. However, questions have been raised regarding the implementation and policing of these regulations to ensure fair pricing and quality standards are maintained across the board. Chomba emphasized the role of the Energy and Petroleum Regulatory Authority in overseeing the energy market and ensuring that the new regulations align with the common goal of providing consistent and affordable power to all. Drawing parallels with the petroleum sector, where regulation has been effective in ensuring fairness and transparency, Chomba expressed confidence that similar success can be achieved in the power sector. With Kenya making strides in green energy and attracting significant investments in renewable power sources, the focus now is on ensuring that the benefits of these advancements translate into tangible advantages for consumers. The push for regulatory compliance and market competition is expected to propel Kenya further as a leading destination for energy investments, setting the stage for a more dynamic and cost-effective electricity retail market in the country.