Electricity consumers in Kenya may soon have the opportunity to acquire token meters from authorized dealers, potentially disrupting Kenya Power’s existing market monopoly.
This initiative seeks to enhance consumer flexibility in connecting to the power grid, allowing them to purchase meters independently of the state-owned utility.
The Africa Smart Meter Association has expressed concerns that Kenya Power’s dominance in the token meter tendering process has stifled the development of local manufacturers.
Industry stakeholders contend that, similar to the diversification achieved through the e-Tims rollout, Kenya Power should set standards and authorize specific dealers to facilitate better access for consumers.
During a recent meeting of the Senate energy committee, Secretary General James Ngomeli of the association disclosed that currently, fewer than 10 percent of the smart meters utilized in Kenya are produced domestically.
He emphasized that this scenario benefits assembly plants that import components rather than promoting local manufacturing.
“However, we are confident that this figure could increase to 60 per cent if a compelling business case is established, similar to what has been achieved with laptop assembly plants,” he said.
Local manufacturers said that the current conditions render it exceedingly difficult to make additional investments in the sector.
“There is a major issue with the lack of approved manufacturing standards for smart meters by the Energy and Petroleum Regulatory Authority (EPRA), creating uncertainty for producers,” he said.
Ngomeli highlighted the necessity for substantial investments in the assembly of smart meters, noting that elevated interest rates pose significant challenges to competition.
A critical issue identified is the lack of approved manufacturing standards for smart meters from the Energy and Petroleum Regulatory Authority (EPRA), which generates uncertainty for potential market entrants.
Manufacturers are calling for long-term framework agreements with key off-takers such as Kenya Power to secure consistent demand for domestically produced smart meters.
Presently, Kenya Power procures between 800,000 and 1 million meters each year to meet the increasing demand for new customer connections and to expand the prepaid meter system.
Charles Kaloki, the association’s chairman, emphasized the necessity of collaboration among universities, research institutions, and companies like Kenya Power to foster the utilization of locally manufactured components, which could significantly enhance the industry’s sustainability.
“There is no reason why they can’t authorise dealers and open up the space for more players,” he argued.
Kaloki observed that enhancing the local manufacturing of smart meters would enable the government and utility companies to considerably diminish their dependence on imports.
This strategy has the potential to decrease expenses related to tariffs, shipping, and currency fluctuations by as much as Ksh 12.9 billion, thereby rendering the deployment of smart meters more economically viable.
