KenGen and GDC looking at geothermal expansion beyond Olkaria and Menengai

Geothermal well at Menengai, Kenya (source: flickr/ ScientificDrilling)
Alexander Richter 7 Jul 2017

Kenya's geothermal players KenGen and GDC are looking to expand its geothermal exploration and development activities beyond their current key areas of Olkaria and Menengai, e.g. at Baringo-Silali, Suswa, Eburru and Lake Magadi.

As reported today from Kenya, the country’s key geothermal players Kenya Electricity Generating company (KenGen) and Geothermal Development Company (GDC) are to expand their geothermal exploration and development beyond the key focus areas up to now, Olkaria and Menengai.

Both companies are currently evaluating the possibilities to expand in an overall bid to increase geothermal energy production. The country continues to face dry weather, which negatively effects the output of the once predominant hydro based power generation.

KenGen and GDC are both reporting being at an advanced stage to start geothermal exploration and development outside the two traditional areas.
KenGen, majority owned by the Government, has largely restricted its geothermal development works in Olkaria where it has built four power plants generating a combined 533 megawatts and is in plans to put up another four plants. It is however looking outside the area and said it has applied for a licence to explore and develop geothermal power in Eburru, also in Naivasha, as well as in Lake Magadi.

“We have made an application to the Ministry of Energy to start exploration and development of more geothermal fields in the Rift Valley. At the moment we want to move to Eburru and have made an application for Lake Magadi,” said Peketsa Mangi resource development manager at KenGen’s Olkaria project.

“There are 20 geothermal prospects in Kenya with a capacity to produce over 10 000MW and we are trying to identify where we can prospect for next and make an application to the Ministry of Energy.”

State-owned GDC is eyeing development at Suswa, away from its flagship fields of Menengai, having broken ground on the Baringo-Silali geothermal exploration and development, as we reported yesterday. Drilling will start there in early 2018.

So far, GDC has been drilling in Menengai where three Independent Power Producers (IPPs) are expected to build power plants and use the steam to generate a combined 105MW.

Quantam Power East Africa, Orpower Twenty Two and Sosian Energy will each develop a geothermal plant with a capacity of 35MW.  It has also drilled in Olkaria, where it supplies steam from its well to KenGen, which use it to generate electricity at its Olkaria IV power plant. The sale of steam is the critical revenue stream for GDC, earning it Sh3 billion per year.

The entity is trying to wean itself from Government funding. Other than the partnerships for the generation of power where IPPs will pay for the steam supplied, the firm is also looking at putting up industrial parks within it project areas. The parks are expected to help absorb excess capacity that will be produced with more plants coming online. Currently the country has capacity to generate 2,300MW from the different source but demand stands at around 1,700MW.

“One of the areas that we are looking at is the establishment of industrial parks. While we are currently meeting demand, we can use the excess power through establishment of industries around the geothermal projects and that will absorb the power and also drive the economy. Geothermal is the cheapest power, reliable and you can be able to project its price over its lifetime. It is also not affected by weather or factors such as international price of oil,” said Ngugi.

Source: The Standard