The Johannesburg Securities Exchange (JSE)-listed AEP Energy will convert the two diesel-fired Nairobi power plants it’s acquiring from Iberafrica to gas-fired generators whose electricity is cleaner and cheaper, the company said.
The South African giant is buying out Spanish company Naturgy Energy Group, which held 100 per cent shareholding in the Iberafrica diesel plants located in Nairobi South.
The deal will present AEP with an opportunity to convert the currently diesel-fired engines of NSPP1 and NSPP2 to run on LNG (natural gas), thereby enhancing long-term value proposition to Kenya Power, AEP Energy Africa says in a statement.
Iberafrica, like other power producers in the country including KenGen, sells electricity in bulk to Kenya Power which in turn retails to homes and businesses.
The diesel-to-gas engine conversion plan comes as Kenya places priority on low-cost green electricity while cutting reliance on expensive diesel generated power.
As a reminder, the diesel/kerosene plants, due to their flexibility in being switched on and off and being ramped up and down, play a crucial role of matching demand spikes and drops in the National Grid.
Due to their expensive power, tied to the cost of global fuel prices, diesel generators are only switched on after the rest of cheaper sources have been injected into the grid and there’s need for more power.
Diesel plants emit greenhouse gases, making them environmentallyunfriendly. The conversion of the two plants is seen as a big step towards clean and cheap energy.