Kenya Power & Lighting Company Plc · NSEKE:KPLC
Kenya Power & Lighting — KPLC Stakeholders Conference on the 5 Year Corporate Strategic Plan 2011/12 to 2015/16
44 slides from Kenya Power & Lighting's conference presentation, Apr 13, 2011
Slide 1: Presentation to KPLC Stakeholders Conference on the 5 Year Corporate Strategic Plan
PRESENTATION TO KPLC STAKEHOLDERS CONFERENCE ON THE 5 YEAR CORPORATE STRATEGIC PLAN 2011/12 TO 2015/16 By Eng. Joseph K. Njoroge, MBS Managing Director & CEO Kenya Power & Lighting Co. Ltd. 13th April 2011 1
Slide 2: Contents
Contents Introduction Vision Mission Values and Objectives Pillars of the New Vision and Mission Measures of Success Electricity Sub‐Sector Structure Regulatory Environment Lessons from the Past 5 Years SWOT Analysis Contribution to the Vision 2030 Economic Plan Key Power System
Slide 3: Introduction
Introduction The Kenya Power and Lighting Company Ltd is a key player in the electricity sub sector with the mandate to purchase bulk electricity supply, generate in off off‐grid grid areas, transmit, distribute and retail electricity to end use customers throughout Kenya. The 5 Year Corporate S
Slide 4: Electricity Sub-Sector Structure
ELECTRICITY SUB-SECTOR STRUCTURE — Energy Ministry of Energy Regulatory FPRPZEwU=-7AA <OmMZM Commission R E KenGen < GDC +— ¢ KETRACO uU | PP and Bulk Tait Approval. LP Imports & Exports UETCL / REA A TANESCO T I Retail fe) Customers N
Slide 5: Electricity Sub-Sector Players
Electricity Sub‐Sector Players Ministry of Energy (MOE) – sectoral policy, supervision and interventions Energy Regulatory Commission (ERC) – Enforcing regulations, licensing power companies, customer protection, approving Power Purchase Agreements and Tariff Reviews Energy Tribunal – Resoluti
Slide 6: Electricity Sub-Sector Players contd.
Electricityy Sub‐Sector Players y contd. Geothermal Development Company – established in 2009 to develop geothermal steam fields for subsequent use in geothermal electricity generation by generation companies Cross Border Electricity Trade ¾ Uganda Electricity Transmission Company Ltd (UETCL) –
Slide 7: Vision, Mission & Strategic Pillars
Vision, Mission & Strategic Pillars Vision : to provide world class power that delights our customers People Innovation Financial Corporate Social Diversification Responsibility & Governance Customer Service Robust Network & Marketing Sources of Power Mission : Powering people for better lives Core
Slide 8: Corporate Objectives
Corporate Objectives i. To improve p deliveryy of customer services. ii. To achieve financial stability and sustainability. iii. To give reasonable return to shareholders for their investment. iv iv. To improve transmission and distribution efficiency. efficiency v. To improve electricity supply qua
Slide 9: Key Measures of Success
Key Measures of Success 2010/11 Key Focus 2009/10 Jestimated|2011/12 |2015/16 |Benefits to Area Indicator Actual factual Target |Target Stakeholders SUPPLY Customer QUALITY Average _ IMPROVEMENT [Interruption 4.4 46| 3.5 2.5| Shortened electricity Duration Index interruption time (hours) LV Breakdow
Slide 10: Key Measures of Success Contd.
Key Measures of Success Contd. Note: This includes: 1. 60MW Emergency Power in 2009/10 and 2010/11 2 Current Peak Demand is 1178 MW recorded in January 2011 2. 3. 26MW Mumias Generation is non‐firm power 4. Demand is suppressed by about 112MW 10 5. Hydro generation is dependent on hydrology
Slide 11: Key Measures of Success Contd.
Key Measures of Success Contd. 11
Slide 12: The Regulatory Environment
The Regulatory Environment State Corporations Act Companies Act (Cap 486) The New Constitution of Kenya Nairobi Stock Exchange Rules g Listingg KPLC C Regulations ERC egu at o s Capital C it l Energy Act Markets 2006 Authority Act Public Environment Grid Code Procurement & Management & Disposal Act
Slide 13: Lessons From Past 5 Years
Lessons From Past 5 Years Sales GWh Profit before Tax Total Assets T t l Number Total N b Customer C t A Accounts t 13 Compounded Annual Growth Rate (CAGR) computed upto 30 June 2010.
Slide 14: Lessons From Past 5 Years Continued
Lessons From Past 5 Years Continued Distribution Efficiencyy Effective Eff ti C Capacity it VVs. Constrained Peak Demand Sales as % of Power Purchase 2,500.00 85% 2,000.00 Projected 84% Actual 83% MW 1,500.00 82% 1,000.00 81% 500.00 80% 79% - 78% Interconnected Effective Capacity Peak Demand Average
Slide 15: Major New Developments In the Electricity Sub-Sector
Major New Developments In the Electricity Sub‐Sector Creation of Ketraco, REA and GDC Energy Scale Up Program targeting 1million new households in the next 5 yrs at cost of KShs. 84 billion Planned Regional g Interconnection pprojects j e.g. g Connection to Southern Africa Power Pool, Ethiopia
Slide 16: SWOT Analysis
SWOT Analysis • Providingg an essential service • High demand • Ability to readily adapt to a changing and modernising Strengths operating environment • Company p yp presence in all counties • Well trained and skilled manpower • Periodic inadequate bulk supply to fully meet electricity market demand
Slide 17: Contribution to Vision 2030 Economic Plan
Contribution to Vision 2030 Economic Plan The Economic Pillar of the Vision 2030 Economic Plan envisages major infrastructural development to facilitate economic growth. The company’s p y contribution are in the followingg aspects: p Planning and implementation of distribution reinforcement and up
Slide 18: Strategic Priorities Consistent with Vision 2030 Medium Term Plan
Strategic Priorities Consistent with Vision 2030 Medium ed u Term e Plan a To ensure that the KPLC 5 Year Corporate Strategic Plan will effectively contribute to the Vision 2030 Medium Term Plan and thus h facilitate f ili electricity l i i d demandd growth, h the h following f ll i actions i will i
Slide 19: Strategic Priorities Consistent with Vision 2030 Medium Term Plan contd.
Strategic Priorities Consistent with Vision 2030 Medium Term Plan contd. contd Regional interconnection with Ethiopia as a major source of imported electricity to minimise future risk of generation capacity shortfall Emphasis on green energy sources in the least cost power development plan, in par
Slide 20: Key Statistics
Key Statistics Installed capacity MW (March 2011) 1,576 Effective Generation Capacity MW (March 2011) 1,306 System Peak Demand MW to date** ((Jan 19thh, 2011)) 1,178 Forecasted unconstrained demand MW 1,290 Reserve Margin % (March 2011) * 1.23% Energy Purchased 2009/10 (GWh) 6,692 Total Sales 2009/1
Slide 21: Supply and Demand Situation
Supply and Demand Situation March Indicator 2007/08 2008/09 2009/10 2011 Peak Demand MW * 1,036 1,072 1,107 1,178 I Installed ll d Capacity C i MW ** 1,310 1,345 1,473 1,576 Effective Capacity MW ** 1 267 1,267 1 280 1,280 1 416 1,416 1 306 1,306 Reserve Capacity Margin % 12% 9% 15% 1.23% Note: * Cu
Slide 22: Demand and Generation Outlook
Demand and Generation Outlook Peak demand, now 1,178MW in 2010/11 grew at an average of 5 5.1% 1% over the past 5 years, years with the reserve generation capacity margin progressively declining to 2.2% in 2009/10 and currently 1.23%, during drought, from 27% in 2003/04. This compares to a required
Slide 23: New Generation Plants (5 year period)
New Generation Plants (5 year period) Project Energy Capacity Expected Date Source (MW) Tana Redevelopment Hydro 20 Jan 2011 Olkaria well head Geothermal 70 Jun 2011 Kipevu MSD Thermal 120 Jan 2011 Triumph Power Athi River Thermal 81 Apr 2012 Gulf Power Athi River Thermal 84 Apr 2012 Melec Powergen
Slide 24: New Generation Plants (5 year period)
New Generation Plants (5 year period) Capacity Project Energy Source (MW) Expected Date Athi River Mining Coal Coal 19.5 Dec 2013 Olkaria IV Geothermal 140 Dec 2013 Orpower Additional Geothermal 52 Dec 2013 Mombasa Coal Plant Coal 300 Dec 2014 Ethiopia Import Import 200 Dec 2014 TOTAL MEGAWATTS 1,74
Slide 25: Energy Purchase by Source
Energy Purchase by Source Power Purchased by Source as at 28th February 2011 REP Thermal KenGen 0% Aggreko Thermal 9% 4% KenGen Hydro 43% IPP Thermal 25% OrPower 4‐ KenGen Geothermal Geothermal 5% 14% KenGen is the largest electricity bulk supplier providing 66% of energy in 2010/11 to date. IPP’s s
Slide 26: Generation by Source 2009/10
GENERATION BY SOURCE GWh 2009/10 Imports Geothermal 38 1,339 20% 1% Hydro 2,170 Wind 32% 16 0% Thermal Cogeneration 3,030 99 45% 2% Geotherm 37% PLANNED GENERATION BY SOURCE 2015/16 Coal 2% Hydro 28% Imports 10% Cogeneration 1% Thermal 3% Wind 19% 26
Slide 27: Committed Transmission Projects (By KETRACO)
Committed Transmission Projects (By KETRACO) Est Cost. Commissioning Transmission Line Length (USD$mil.) Date Reactive Compensation Phase 1 ‐ 1 Nairobi Transmission system * 17 2011 Kilimambogo ‐ Thika ‐ Githambo ‐ 2 Kiganjo 132kV single circuit 135 10.8 2011 3 Mumias – Rangala 132kV single circuit
Slide 28: Committed Transmission Projects (By KETRACO)
Committed Transmission Projects (By KETRACO) Transmission Line Length Est Cost. Commissioning (USD$mil ) (USD$mil.) Date 12 Olkaria – Lessos ‐ Kisumu 300 60 2014 13 Olkaria ‐ Narok 68 10 5 10.5 2013 14 Sotik ‐ Bomet 33 6 2013 15 Lessos – Kabarnet and Nanyuki 144 26 2013 ‐ Nyahururu 16 Kyeni ‐ Ishiar
Slide 29: Electricity Network Existing & Proposed HV & MV Network
Electricity Network Existing & Proposed HV & MV Network Voltage (kV) Length Projected (km) Lengths (km) 2016 2010 500 0 1,200 Proposed Ethiopia – Kenya 400 0 1,250 Interconnector 220 1 331 1,331 2 269 2,269 132 2,211 3,119 66 655 1,311 33 13,812 20,177 11 25,514 40,365 Total 43,523 69,690 Proposed N
Slide 30: Distribution Plans: Energy Sector Recovery Project
DISTRIBUTION PLANS Energy Sector Recovery Project On going establishment of new Substations and Upgrading to cater for load Value Ksh growth and improve supply reliability and quality. Million IDA Financed Contract I ‐ Syokimau, Gigiri, Donholm, Airport, Muthurwa, 2,042.42 Limuru Thika, Limuru, Thik
Slide 31: Additional IDA Credit for ESRP
Additional IDA Credit for ESRP Establishment of new Substations and Upgrading 2010/11 to 2013/14 Value Million Ksh 1. Contract VI ‐ Lot 1; Ridgeways ( Kiambu Rd) , Saika ( Komorock) and 1,018.70 Ruai – ongoing. 2 Contract VI ‐ Lot 2; Langata, 2. Langata laving ton and Ngong Town – ongoing. ongoing 9
Slide 32: Distribution Projects Funded from Rights Issue and Loss Reduction
Distribution Projects Being Implemented with Funding from KPLC Rights Issue Establishment of new Substations and Upgrading Value Million Ksh 1. Establish substations Likoni Road, Cityy square, q Eastleigh, g Kasarani, 3,899 Dagoretti, Embu East, Bahati and Turkwell and construct and reconductoring –
Slide 33: Distribution Strategic Initiatives
Distribution Strategic Initiatives To address critical electricity supply quality challenges facing the company the following projects are being implemented: Project Objective Implementation period 1. Under grounding To reduce electricity line break downs in 2010/11 to of electricity lines urban cen
Slide 34: Customer Services Strategic Initiatives
Customer Services Strategic Initiatives Effectively collect revenue while providing efficient and high quality customer handling services. KPLC has developed a core competence of consistently achieving over 98% revenue collection as percent of billing Action Time Frame i. Automatic Meter Reading (AM
Slide 35: Customer Service Standards
Customer Service Standards KPLC launched its Service Delivery Standards (STIMAFLOW) in April 2010. This sets standards that customers should expect. It covers the following issues: Actual Average St d d Ti Standard Time Ti Time Disconnection for Non Payment Reconnection time after payment Within 24
Slide 36: Customer Service Standards Continued
Customer Service Standards Continued Average Standard Standard Actual Connection Time After Application For Quotation Construction Quotation Average actual Supply Time Time Time construction time Requiring q g a meter onlyy 7 3 49.7% of all LV and Requiring Low Voltage Extension MV applicants Metere
Slide 37: Service Delivery Innovations
Service Delivery Innovations Accelerated customer connection – Umeme Pamoja ‐ for groups, groups people settlements and maximization of transformer usage New customer connection financing in partnership with commercial banks and KPLC Revolving Fund –Stimaloan Expanded payment of electricity bi
Slide 38: Organisation Culture Change and Rebranding
Organisation Culture Change and Rebranding The Company has embarked on an organisation culture change and corporate rebranding project to transform our organization culture and staff attitudes. This is intended to greatly enhance service delivery, corporate performance and image image. Developme
Slide 39: KPLC Diversification Strategy
KPLC Diversification Strategy KPLC h has di diversified ifi d its it business b i as a way off lleveraging i ththe assets t and d resources and increasing shareholder value. Leveraging the SCADA infrastructure ¾ KPLC has installed 1200 km of a 24 pair fibre optic cable on its transmission infras
Slide 40: Map not to Scale
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Slide 41: Financial Plan
Financial Plan To meet sub‐sectoral operational improvement and system growth targets during the 5 Year Strategic Plan period while sustaining profitability. The following financial strategies are to be pursued: Operational efficiency improvement by keeping growth in T&D costs lower than growt
Slide 42: Minimising the End User Cost of Electricity
Minimisingg the End User Cost of Electricityy The end user average tariff is now Kshs 11.3 per kWh (US cents 14 /kWh) as at February 2011. The primary contributor to end user tariff increase above the basic tariff of Ksh 7.52 is fuel cost adjustment. This reached Kshs 3.59 (32% of end tariff), w
Slide 43: Conclusions
Conclusions Momentum of improvement over past 5 years to be maintained Support from lenders already in place for network infrastructural investment programme Funding from World Bank for additional works under the ESRP and KEEP projects Due to current low penetration electricity demand is in
Slide 44: Thank you
The Kenya Power & Lighting Co. Ltd.