The Cost of Energy

During my short stay in Nairobi, Kenya, I learned a bit about the electric power supply problems there.

The electricity price in Nairobi is five times as expensive as in Korea. One Korean living in Nairobi told me that they are charged more than $1,000 each month for the electricity. And it is not that they have lots of electric home appliances.

No wonder the hotels in Nairobi are so expensive. (The lowest rate at a decent downtown hotel is around $300 per night.)

When there isn’t sufficient rainfall in the region, the country cannot generate enough power from the hydro-power plant. Then they have to burn lots of diesel oil to run oil-based power plant, a very expensive alternative.

Also, for now only about 10% of the population has access to electric power. As their economy grows, more people would want to use electricity. Without enough supply, the growing demand for electricity will only keep the price stay in the high range.

In order to break out of this ordeal, Kenyan government is seeking more economical ways to generate sufficient electric power. Geothermal plant, coal-based plant, and nuclear plant are some of the alternatives they are looking into.

With that in mind, I am very grateful for the situation in Korea where most of the population has access to comparatively cheap electricity. But it shouldn’t mean that Koreans can use electric power in a wasteful manner. Koreans should come up with ideas to take advantage of this low-cost power supply situation to build stronger social infrastructure. The competitive advantage of having blessed with cheap electric energy might not continue very long.