The Kenyan government is considering the removal of the monthly limit that electric vehicle (EV) battery-charging companies have on the quantity of cheaper electricity they can draw as it seeks to boost the plugging in of more vehicles. The changes are meant to spur the already increasing demand for EVs so far and, on the other hand, support the change to electric mobility.
Current E-Mobility Tariff
The e-mobility tariff, introduced last April, currently caps the cheaper power use of EV battery charging companies at 15,000 kilowatt-hours (kWh) per month. Beyond the set 15,000 monthly units, such companies are charged the normal power tariffs. The e-mobility tariff allows EV firms to pay KSh 16 per unit, while on-peak, and KSh 8 per unit, while off-peak—costs far less than the KSh 20 per unit paid by small commercial customers.
Government Response to Increasing Demand
The lobbying by EV firms to do away with the 15,000 kWh tariff cap has been victorious, courtesy of the increased demand for EV charging that has seen most companies surpass the threshold. But Epra Director-General Daniel Kiptoo said the initial limit was set to protect Kenya Power from further revenue losses because of the cheaper tariffs.
“We need to have a conversation with the utility (Kenya Power) and the stakeholders so that we can decide on increasing the limit to a higher threshold,” he said. He added the cap may altogether be removed by the end of the current tariff control period in June 2026, after collecting relevant data on the uptake of the cars in Kenya.
Balancing Sector Revenue and Incentivizing E-Mobility
The CS further stressed the issue of ensuring that the removal of the cap balances between the revenues of the sector, financial sustainability by Kenya Power, and continuing to incentivize the adoption of e-mobility. The government has indicated a consideration to have the cap removed in an effort to spur the uptake of electric vehicles through an extensive campaign to create awareness about the safety and affordability of EVs.
“This is a matter of balance of ensuring that the sector’s revenues are met, the utility is financially sustainable but also we continue to incentivise the uptake of e-mobility” Kiptoo explained.
Rising EV Registrations
This push to lift the electricity cap comes at a time when EV registrations in Kenya have particularly surged. Last year, EVs registered jumped over five times to 2,694, bringing to the fore the growing interest and uptake of electric vehicles in the country.