Licenses are an essential part of a strong and resilient energy sector

By Daniel Kiptoo Bargoria, MBS,OGW

Kenya’s pursuit of a bright and sustainable energy future is well underway, with ambitious infrastructure projects lighting the path forward. However, an often-overlooked component in this journey is licensing, which plays a vital role in ensuring the safety and reliability of the energy sector.

Some might ask, “Why is a license necessary when professionals already have academic qualifications?” The answer lies in the critical need to prevent untrained or unethical practices in an industry that deals with hazardous materials, high-voltage equipment, and complex machinery. Licensing is not just a formality; it is essential for fostering sustainable growth within the energy sector.

Access to sustainable and affordable energy is a cornerstone of Kenya’s Bottom-Up Transformative Agenda. As a signatory to the Sustainable Development Goals (SDGs), Kenya is guided by SDG 7, which aims to ensure access to clean and affordable energy for all. But how does the country achieve this? The concept of energy transition, which involves shifting from conventional fossil fuels to renewable energy and promoting efficient energy use, has been fully embraced. Achieving the goals of this transition requires a focus on safety, affordability, energy security, and sustainability.

This is where the Energy and Petroleum Regulatory Authority (EPRA) plays a critical role. Through the issuance of licenses, approvals, and registration certificates, EPRA ensures that utility companies, individuals, and contractors meet the necessary standards to support a just energy transition.

Energy affordability is a top concern for consumers, and the Authority is tasked with ensuring fair pricing through tariff approvals. In setting these tariffs, a careful balance is required between the utility’s revenue needs with the reasonable returns for investors. This includes covering employee salaries, purchasing power from generators, and investing in projects that strengthen the grid. This regulatory process is crucial, as it prevents price exploitation while ensuring that utilities remain financially stable and able to provide services.

If a utility operates at a loss due to low tariffs, it risks shutting down, potentially plunging the country into an energy crisis. Conversely, if energy prices are too high, making it unaffordable for consumers, the market could fail. The Authority’s role is to maintain this delicate balance, achieving what economists call Pareto Optimality—where the market functions efficiently, benefiting all parties.

However, affordability alone isn’t enough. Licensed utilities must also provide safe, reliable, and high-quality services to meet the needs of all consumers.

Generation, transmission and distribution licenses issued to utilities have conditions for safety. These conditions are drawn from Kenyan and international standards. A good case in point is during power line construction where the utility should maintain a minimum clearance of the line from the ground. Imagine a situation where an overhead power line touches your head as you cross the road. This would lead to death. It is therefore necessary to have licensing conditions that ensure the utility builds the line in such a way that it does not endanger lives. The same applies to voltage, frequency and harmonics of the power system. It might be essential to know that the same conditions apply to oil pipeline construction and operations. Safe energy services are good, but they must also be reliable.

Licenses not only ensure safety but also require that services are reliable for customers. Reliability means delivering the expected quality and quantity of services, minimizing issues like blackouts. To achieve this, reliability targets are set and monitored for licensed utilities, using indices such as System Average Interruption Frequency Index (SAIFI), System Average Interruption Duration Index (SAIDI), and Customer Average Interruption Duration Index (CAIDI), which track the frequency and duration of service interruptions. Because of this monitoring, a significant improvement has been noted regarding the quality of services by utilities, with the goal being a consistent and high-quality power supply. Licensing and monitoring alone, however, are not enough. Technicians and contractors also play a crucial role in ensuring the safety and reliability of the energy supplied.

Contractors install power systems at the consumer end. A well-organized utility cannot function well if the installations at the demand side are problematic and that is why the licensing of firms and individuals who do engineering works for consumers is important. Emphasis is laid on the workability –power must flow- and the safety of the system. For this category, licensees are required to perform comprehensive electrical safety checks such as continuity tests, earth loop tests, earth resistance tests and insulation tests. Without these, the consumer would be at risk of electrocution. The Authority other hand conducts technical and surveillance audits to ensure that the electricians and contractors work according to standards. Does this ensure sustainability though? No. The energy transition is needed to complete the cycle.

The Authority issues licenses for practitioners in solar PV systems and energy auditing, and certificates for energy efficient appliances. The licenses for solar PV systems are a mimicry of those for electricians. The difference is that the licensees design and install solar PV systems, alongside the wiring and testing process. Energy efficiency, on the other hand, is associated with bringing down the cost of energy. The appliance registration certificate ensures that only energy efficient appliances are imported into the country. Energy auditing licensees help designated facilities –these are selected energy consumption entities- in reducing their energy use, without compromising the quality and quantity output. All the licensees, it should be noted, must meet certain qualification thresholds.

These conditions vary as depicted by regulations, depending on the nature of the license. For example, utilities must prove to have both financial, legal and technical capabilities to undertake the project whose license they apply for. Contractors should have the requisite tools and personnel to obtain the licenses. Individuals undergo competency tests for license issuance. The processes are transparent, efficient and nondiscriminatory.            

With all these, the citizen is served by utilities, contractors, electricians and technicians who adhere to the concepts of accessibility, affordability and sustainability in the energy sector. The citizen, although not licensed, plays a critical role by ensuring that they only engage licensed individuals while doing their work. All these are important even as we try to meet the BETA agenda goals and the SDG number seven.    

The writer is the Director General at the Energy and Petroleum Regulatory Authority