Bamburi Cement is diversifying its energy source and now has its eyes set on solar to cut reliance on Kenya Power.
It has signed a Power Purchase Agreement with MOMNAI Energy Limited to set up two solar plants adjacent to its Mombasa plant and Nairobi grinding plant.
The firm is the second biggest consumer of electricity in Kenya after Kenya Pipeline Company.
MOMNAI Energy has been established by Frontier Energy, a renewable energy independent power producer in Africa.
The solar project aims at saving on power costs while contributing to net zero carbon emissions by switching to renewable energy.
It will deploy solar power systems with a total capacity of 14.5MW and 5MW for the Bamburi plants in Mombasa and Nairobi respectively.
This will account for approximately 40 per cent of Bamburi’s total power use, management said in a statement yesterday, a move likely to hurt Kenya Power’s revenues from electricity sales.
“We are elated to be making this step towards switching to more affordable and clean energy that will not only lead to a significant reduction in power costs but also bring us closer to our goal of achieving Net Zero carbon emissions,” strategy and business development director, Miriam Ngolo, said.
The firm spends an average Sh2.4 billion annually on electricity to run its two major plants.
Over the past 10 years, Bamburi has substituted heavy fuels with use of alternative fuels like biomass including rice husks and other waste material such as waste tyres and waste oil in its operations.
Construction of the solar power plants is scheduled to begin at the end of 2022, after requisite regulatory approvals with expected completion within a year.
MOMNAI Energy will be responsible for financing all costs related to the project, including developing, managing, operating and maintaining the solar photovoltaic plants’ infrastructure.
Bamburi’s Mombasa and Nairobi sites have land available to set up and generate solar energy, which is expected to achieve significant recurrent savings annually, while simultaneously improving reliability of supply and improving Bamburi’s environmental footprint.
Bamburi’s Group Managing Director, Seddiq Hassani said: “ Shifting to renewable solar energy will help us meet key objectives under our sustainability agenda which include reducing the carbon footprint of our operations, saving on costs, and upholding Holcim’s Net Zero Pledge with Science- Based Targets initiative (SBTi).”
It will also position the company to deliver its commitments to the UN COP21 Climate Change Agreement, Hassani added.
A number of large electricity consumers and households have in recent years turned to solar as they seek cheaper supply, a move that has sent Kenya Power to the drawing board.
In 2020, Total Kenya announced its over 100 stations had switched to solar energy.
Devki Group which is in the manufacturing steel products, roofing sheets and cement is also planning to switch to own power in the next two years in a bid to cut on high production cost, founder Narendra Raval told the Star last September.
More industries and warehouses are embracing solar energy amid the the conversation on global warming which has increased use of renewable energy sources and the re-engineering of business processes with the intention of reducing the carbon footprint.
In its financial results for the year ended June 2021, Kenya Power notes the conversation on global warming has increased use of renewable energy sources and the re-engineering of business processes with the intention of reducing the carbon footprint.
"The resultant outcome is rising grid defections aided by the decreasing cost of renewable energy sources and delayed/ lack of access to the national grid. Overtime, may eat into the company’s market-share and the mission to be the energy solutions provider of choice,” it said.
The firm is keen to enter the solar business to protect revenue, with the government’s move to reduce electricity costs by 30 per cent expected slowdown the shift.
Kenya Power revenue from electricity sales increased by Sh9.7 billion to Sh125.925 billion in the year ended June 30,an increase of 8.4 per cent.
The increase in electricity revenue was mainly attributable to a growth in unit sales by 400 GWh from 8,171 GWh the previous year to 8,571 GWh.
Non-fuel power purchase costs however increased by 2.1 per cent from Shs74.445 billion the previous year to Sh76.037 billion, due to an increase in units purchased from 9,853 GWh the previous year to 10,399 GWh as a result of higher electricity demand.
Fuel power purchase costs on the other hand remained relatively unchanged at Sh11.184 billion compared to Sh11.061 billion the previous year.
"The company is currently focusing on its financial recovery strategy as it seeks to reposition itself in the dynamic energy market in the face of emerging alternative energy sources, customer grid defections, changing laws and regulations as well as the changing customer needs and preferences,”management told shareholders in December.