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Kenya plans 50% of geothermal electricity by 2018

Kenya plans 50% of geothermal electricity by 2018 KenGen Olkaria II plant, Kenya (source: constructionkenya.com)
Alexander Richter 24 Nov 2010

Kenya plans to have nearly half of the national power output to come from geothermal energy by 2018, that needs strong development and support, such as the planned risk mitigation fund.

“The Kenyan government plans to have nearly half of the national power output sourced from geothermal by 2018 as a strategic shift from hydro-power, which has become unreliable because of erratic rainfall.”, so recent news from Kenya.

“The government has the tough task of financing geothermal, with skittish investors demanding to be cushioned from losses should they hit dry wells. Treasury has declined to offer such guarantees to private investors.

Energy minister Kiraitu Murungi however says the government is considering setting up a risk mitigation fund for this purpose.

“Beneficiaries will be required to pay 40 per cent of the cost of any dry well sunk. Under this arrangement, Kenya will accelerate geothermal drilling and power plants development,” the minister said last week while appealing to Germany Development Bank (KfW) for assistance.

Kenya is among few countries with huge untapped geothermal power, with 14 sites in the Rift Valley that have estimated potential of 7000MW to 10000MW. The country is behind top geothermal power producers like America at 2,544MW, Pillippines 1931, Indonesia 799MW and Italy 790MW.

Currently only 265MW are sourced from geothermal sources.

KenGen Managing Director Eddy Njoroge says production of 1,260MW from geothermal in the next seven years will require $4.5 billion (Sh360 billion). Olkaria fields are expected to contribute 700MW and Menengai 560MW.

This will reduce over-reliance on hydro-power, which presently contributes 54 per cent. By 2018, hydro is expected to contribute 28 per cent in the power mix, while thermal will provide 18 per cent.

The effective hydro-power capacity is 728MW of the total 1,342MW, which players in the sector say does not augur well for supply security due to increased frequency of droughts.

During dry periods, hydro-power is cut by half to 300MW, which has often forced the government to resort to expensive thermal production and imports.

“Upfront capital investment is very expensive but the long term benefits are cheaper power rates,” Mr Njoroge said.

KenGen expects to earn carbon credits from use of geothermal, which is clean and the first well will be registered in December. Geothermal Development Company is expected to facilitate the shift to geothermal power production with two rigs which will be hired out to private companies.

Mr Njoroge said the projected geothermal expansion in seven years is in line with the success of other developing countries like Philippines, which has tapped 724MW in four years, Indonesia 480MW in three years and Mexico 200MW also in three years. Peak demand is 1,200MW against an effective generation capacity of 1,342MW.

“The challenge is to meet the peak demand which is already suppressed and remains at above 15 per cent and above,” said Mr Njoroge.”

Source: All Africa