In Kenya, the energy transition arrives on a phone screen as a 20-digit number. That number is what a growing number of households see when they buy prepaid electricity. And as the country moves toward another election in August 2027, that number could become a more powerful measure of the government’s energy record than any statistic about renewable power.
Kenya gets more than 90 percent of its electricity from renewable sources, led by geothermal, hydro and wind. It is one of the world’s cleaner electricity systems. But clean does not necessarily mean cheap. For the consumer, the question is much simpler: How many units did their money buy, and how long did they last? That is where Kenya’s energy success story becomes more complicated.
The price of a prepaid token reflects far more than the cost of generating electricity. It also carries the costs of moving that electricity across the country, financing the system and absorbing economic shocks. Some of those charges can change even when electricity consumption does not.
Variable adjustments and fuel costs are one part of the equation. The Fuel Cost Charge (FCC) reflects the cost of thermal generation used to provide backup when renewable sources are insufficient. The Foreign Exchange Rate Fluctuation Adjustment (Forex) reflects movements in the shilling against foreign currencies. Inflation adjustments account for changes in the cost of operating parts of the power system.
Government levies and taxes also apply. A portion of what consumers pay goes toward statutory charges, including the Rural Electrification Programme levy and the Water Resource Management Authority levy, as well as VAT.
The Energy and Petroleum Regulatory Authority regulates these charges through the energy sector framework. So when a consumer buys tokens, they are not simply buying electricity; the money helps finance an entire system, from generation and power contracts to transmission, distribution, taxes, and economy-linked adjustments.
The cost of bad decisions in the power sector eventually reaches the household. Poorly negotiated independent power purchase agreements, investment decisions that fail to match supply with demand, high government taxes and levies, and global economic shocks may seem like distant policy or market issues. But they converge in one very immediate place: your household, through the phone screen, when you buy that token.
That distinction matters because Kenya’s problem is increasingly less about whether it can generate clean electricity and more about how efficiently it delivers and pays for it. System losses are a glaring example. More than 20 percent of electricity can be lost through technical failures, theft and other inefficiencies, compared with roughly up to 10 percent in better-performing systems. Consumers ultimately feel the cost.
Kenya also carries what might be called an African premium, where electricity projects are expensive to finance because investors demand higher returns to compensate for perceived risks. Those costs can eventually be passed on to electricity prices.
Long-term power purchase agreements through Independent Power Producers add another layer. They helped Kenya attract private generation when the country desperately needed more electricity, but contracts may require payment for power even if not all of it is ultimately consumed. That creates an uncomfortable contradiction. Kenya can have periods of excess generation while consumers continue paying relatively high prices.
Manufacturers are particularly exposed. Industry groups have described Kenya’s electricity as among the most expensive in the region, with industrial users paying substantially more per kilowatt-hour than competitors in countries such as Egypt, South Africa, Morocco and Ethiopia. That affects the price of everything from manufactured goods to food processing and can make Kenya less attractive to investors.
This is why Parliament’s recent push for a policy to guide renegotiating electricity agreements with major power producers matters. Lower wholesale prices could give Kenya Power more room to reduce consumer bills without undermining the utility’s finances. But renegotiating contracts alone will not solve the problem.
Kenya needs to attack the costs buried deeper in the system. It needs to modernise the grid, reduce losses, improve metering, expand storage, strengthen competition and make it easier for large consumers to buy electricity directly from generators through open-access and wheeling arrangements.
Most importantly, consumers deserve to understand what they are paying for. Imagine if every token came with a simple breakdown of how much went to generation, how much to Kenya Power’s distribution system, how much was lost, how much went to taxes and levies, and how much reflected fuel, foreign-exchange and inflation adjustments. That would turn an opaque electricity bill into a tool for public accountability.
Kenya’s energy transition should ultimately be judged not only by how green the grid becomes, but by whether ordinary Kenyans can afford to use it. As the election approaches, voters may not be thinking about geothermal capacity, renewable energy targets, or power purchase agreements.
They will be thinking about something much more immediate: how long their tokens last. That is the political currency of Kenya’s energy transition.