Energy Audits Mandated for Large Power Users as Industrial Demand Nears Half of Grid Consumption
By Chemtai Kirui | Nairobi | March 5, 2026
NAIROBI — Industrial electricity demand has climbed to nearly half of grid consumption, prompting regulators to impose mandatory energy efficiency audits on large power users under new rules aimed at easing pressure on the national grid.
Data from the Energy and Petroleum Regulatory Authority shows industrial consumers used 2,924.48 gigawatt hours between June and December 2025, a 4.18% increase from a year earlier, accounting for 49.25% of total electricity demand.
Under the 2025 framework, the compliance threshold is set at an annual consumption of 180,000 kilowatt-hours (kWh). Crucially, the regulations adopt a holistic approach, calculating this limit based on a facility’s total energy footprint, including both electrical and thermal energy from sources such as fuel and steam.
Energy management regulations were first introduced in 2012, requiring large consumers to conduct periodic energy audits. In practice, however, compliance largely stopped at reporting, with limited follow-through on recommended savings.
The 2025 update, published under Legal Notice No. 18, shifts the framework toward mandatory implementation. Facilities must now realise at least 50% of the projected savings within three years of submitting an Energy Implementation Plan (EIP).
Companies will also be required to appoint licensed energy managers and establish internal energy management committees to oversee compliance.
To incentivize these improvements, the law officially introduces Energy Saving Credits—market-based instruments often referred to as “white certificates.”
These credits allow firms that exceed their efficiency targets to trade verified savings as financial assets. The system effectively creates a secondary market where high-performing companies can sell credits to firms struggling to meet the three-year savings mandate, creating a market-based incentive similar to carbon credit systems.
EPRA Director General Daniel Kiptoo said the measures are intended to strengthen corporate governance while improving industrial competitiveness.
“Among other things, the Regulations require that facilities conduct comprehensive energy audits once every four years, implement the recommendations and realise at least 50% of the projected savings,” he said during a meeting with industry executives in Nairobi.
The policy shift comes as manufacturers continue to cite high electricity costs as a constraint to expansion and regional competitiveness.
Industrial users currently pay an estimated $0.18 to $0.22 per kilowatt-hour — significantly higher than several regional peers. Ethiopia, which exports surplus electricity, offers tariffs as low as $0.01 to $0.03 per kWh, while Tanzania’s rates average about $0.09 per kWh, according to regional energy data.
The cost gap has intensified pressure on policymakers to contain power expenses while improving efficiency across the industrial sector.
Energy Principal Secretary Alex Wachira said improved efficiency could effectively unlock additional supply without building new generation capacity.
“By so doing, industries will free up power, creating what is referred to as virtual power plants,” Wachira said. “That power can then be distributed to more factories, homes and commercial centres without having to invest in new power plants.”
Analysts say the regulations could lower operating costs over time if firms achieve efficiency gains, although compliance may require upfront investment in audits, retrofits and monitoring systems.
In parallel, EPRA has introduced new appliance efficiency standards under the Energy (Appliances’ Energy Performance and Labelling) Regulations to ensure that imported and locally manufactured equipment meets Minimum Energy Performance Standards (MEPS).
The rules cover refrigerators, air conditioners, lighting systems and electric motors — key components in industrial and commercial energy use.
The regulator did not immediately disclose enforcement penalties for non-compliance, but the framework formalises oversight obligations for large power users as industrial demand continues to rise.
Analysts say the regulations could reduce industrial energy costs if companies implement efficiency measures successfully, though firms may face significant upfront investment in audits and equipment upgrades.
With industry now accounting for nearly half of grid consumption, regulators say improving efficiency among large consumers will be critical to managing electricity demand without adding new generation capacity.
