Electricity users could soon walk
into an authorised dealership and
acquire token meters, should a new
push to end Kenya Power’s monopoly in token meters tendering sail
through.
The move seeks to give users the choice to connect power without buying electricity meters from the state owned retailer.
According to Africa Smart Meter Association, Kenya Power’s monopoly has stifled the growth of local companies manufacturing the meters.
The industry players say that similar to the e-tims rollout, Kenya Power should set out the standards and authorise select dealers to reach the consumers.
While appearing before the Senate Energy Committee, the association said that currently, less than 10 per cent of the smart meters used in Kenya are manufactured locally.
“The prevailing scenario favours assembly plants, where parts are imported and kits are assembled locally. 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,” said the association secretary general James Ngomeli.
In the submissions, the local manufacturers said this trend has made in impossible for further investments in the sector because companies cannot set up and wait for Kenya Power tendering to conduct business.
They argue that assembling smart meters requires significant investment, and with high interest rates in the financial markets, local manufacturers struggle to compete.
“One major issue is the lack of approved manufacturing standards for smart meters by the Energy and Petroleum Regulatory Authority (EPRA), creating uncertainty for producers,” added Ngomeli.
Additionally, manufacturers are calling for long-term framework agreements with large off-takers like Kenya Power (KPLC) to guarantee consistent demand, as reliance on tenders is not seen as a sustainable investment driver.
Kenya Power currently acquires between 800,000 to 1 million meters annually to meet the growing demand for electricity connections and replacements.
These meters are primarily used for new customer connections, upgrades to pre-existing connections, and the expansion of the prepaid meter system.
“There is also a growing need for universities and research institutions to collaborate with companies like KPLC to promote the use of locally produced components, ensuring the industry’s sustainability,” said the Association chairman Charles Kaloki.
Nairobi Senator Edwin Sifuna sought to know why the local producers had failed to produce what Kenya power needed.
Kaloki said that the utility firm and EPRA are yet set localised standards customised for producers within the country.
“There is no reason why they can’t authorised dealers and open up the space for more players,” “By producing smart meters locally, governments and utility companies could reduce the reliance on imports, lowering costs associated with tariffs, shipping, and currency exchange rates by up to $100m (Sh12.9 billion), leading to more affordable smart meter deployment,” added Kaloki.
Currently, the are four assembly plants in operation, however, the market remains highly competitive and somewhat secretive, primarily due to the intense focus on securing Kenya Power tenders. Price wars dominate the landscape, and many players prefer to keep their developments under wraps to maintain a competitive edge.
“This secrecy is further heightened by the fact that Kenya Power is often the sole buyer, leading to cutthroat competition. Some of our members, understandably, prefer to remain anonymous given the sensitive nature of their business strategies,” the association said.
The result is an industry where
innovation is progressing, but largely
behind closed doors, making it difficult to foster open collaboration or
broader market participation.