Audit Picture

6 Steps to become compliant with Energy Regulations 2012

When you are in Kenya, you either pay the bill for the all drinks you have had with friends or all your drinks get paid for with one of your more moneyed friends. That is pretty much the culture here. So a few weeks ago, when a friend from Britain invited me for a drink at Sankara Hotel to discuss to discuss Kenya’s energy regulations 2012, I was shocked when he left and only paid for his two drinks. Luckily I had “backup” to pay for my bill though it pretty much left my pocket dented.

From our discussion, my British friend was more amazed as to how stringent the energy regulations were in Kenya. In fact to him, Kenya’s regulations were the most stringent he has ever seen and also offered the most opportunity for the energy industry. He left me pondering on why exactly he felt so and so the last two weeks I have looked deeply into the regulations and attended a few meetings on the same.

Earlier this week I was invited for a stakeholder’s meeting by ERC on the energy regulations. The main agenda was to look at how we can develop an energy curriculum to ensure that we license more energy auditors. Currently, we only have 16 licensed energy auditors. The country would need at least 300 energy auditors to audit the more than 3000 facilities that have comply with the energy regulations.  Most facilities affected with this regulations are currently not aware of these yet they are required to comply with the regulations before 2015. If a facility consumes more than 180,000 kWh of both Electrical and Thermal Energy, they it must be compliant with the energy regulations.

To be compliant you have to follow the following six simple steps;

  1. Conduct an Energy Audit once in 3 years. You must submit the report at least six months before the end of your financial year.
  2. Set up an energy management committee and designate an energy officer.
  3. Develop an energy policy that must be submitted to ERC for approval
  4. Develop an Energy Investment Plan after the energy audit. This should also be submitted  at least six months before the end of the financial year
  5. Submit Annual Implementation Report to show your level of implementation of the energy audit recommendations
  6. Record your monthly electricity, water and Fuel bills for a period of at least 5yrs

Compliance basically starts with an energy audit. The energy audit must be done by a licensed ERC energy auditor who will also help in developing the energy management strategy and energy investment plan.

My British friend was more amazed by the penalties involved. Failure to comply with the regulation will attract the following penalties

  1. One year imprisonment for the facility head
  2. One million Kenya Shillings fine
  3. Thirty Thousand shilling per day for delay in submission of the implementation report

This regulations are a carrot and stick approach to compliance. The carrot being that the facility will save energy and reduce its cost while the stick being the penalties. Our energy regulator, ERC, is currently working hard to ensure compliance with these regulations.

Comments
  1. Looking at the big picture the energy audits should be viewed from a value adding perspective since energy contributes to one of the biggest cost centers in terms of the running of firms.
    Kenya’s total energy mix is 1,708 megawatts, with hydro making up half or 808 megawatts. Diesel-fired plants, which account for a third of Kenya’s power basket or 542 megawatts, deliver energy at a cost of between Sh22.60 and Sh31.30 (US cents 26-36), pushing up the price of power.
    Make no mistake that the above consumption rises up as lifestyles improve and the domestic demand goes up because people tend to buy all sorts of electronic stuff from washing machines,fridges,microwaves and air conditioners.
    On my recent visit to Johannesbug i noticed the energy demand was also on an upward trend and on one of the evenings a message on the TV set requested residents to switch off any unnecessary utilities because the peak load was high.
    This clearly states that Kenya is in the right direction in ensuring areas of energy wastes is controlled and the sooner we do it the better for us in the long run.

    • Very True Charles. Its is estimated that with Energy Efficiency, the country can save about 550MW of electricity demand. This means energy efficiency is an alternative power generating source. ERC is working hard together with other stakeholders to ensure this regulations are followed and benefits achieved.

  2. Patrick

    Am sure many Kenyan companies, who consume this amount of energy, are not aware of these regulations and ERC is squarely to blame. Though the regulations are in the long run meant to ensure responsible power consumption and alignment of future power generation to consumption, ERC needs to come out and ensure all the affected are aware.
    BTW, when were these regulations effected and are there companies that have affected?

    • Its true Patrick. I otherwise believe that ERC can only do as much. ERC has been sending out letters to the 3000 energy consumers who should comply with the regulations. I feel its up to us the enlightened ones to create the awareness. Sooner or later, facilities will have to comply or face penalties.

      The regulations took effect last year in 2012. It is only this year in September when the categorization was done as to who should comply. Now everything is in place and before the end of next year, companies must have complied.

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