Kenya provides US$ 71 million for geothermal exploration
The Kenyan government will increase its financial provision for geothermal power generation in the next budget as it attempts to cope the with increased demand for power. In this year’s budget Sh4.5 billion (US$ 71 million) has been provided for steam production drilling.
As reported by Kenyan Sunday Nation, “The government will increase its financial provision for geothermal power generation in the next budget as it attempts to cope the with increased demand for power. Vice-President, Kalonzo Musyoka, who was the chief guest during the inauguration of the Olkaria 3 geothermal plant (Orpower) said the State intended to accelerate geothermal power generation in the country.
“The government recognises development of geothermal energy as critical to addressing the power needs in the country and has set substantial funds for it. In this year’s budget Sh4.5 billion (US$ 71 million) has been provided for steam production drilling and is expected to be enhanced in the next financial year.”
Orpower, developed by an American company, Ormat International, is the single largest private investment in the sector, and will inject an additional 48 megawatts (MW) to the national grid.
Ormat has invested US$150 million (Sh12 billion) in geothermal power generation since 1996, with the new plant taking up US$100 million (Sh8 billion). Mr Musyoka said the government had formed the Geothermal Development Company (GDC) to harness the alternative power potential in the country. He urged the company to enhance the production capacity to 100 MW.
Energy minister, Kiraitu Murungi, said he had already set up a transitional committee composed of officials from GDC, the Energy ministry and KenGen. However, he did not state when the process of setting up of structures for the new company would be completed.
He said GDC would take up upstream activities which have huge upfront investment to spur the growth of the sector. Initial cost has discouraged private sector investment but geothermal power is cheaper in the long term compared to fossil fuels.
“We have no doubt that the establishment of the company will enable the country to attract more investments in geothermal production,” said Mr Murungi.
GDC is a special purpose company that will focus on upstream geothermal activities of exploration, field development, drilling and upstream supply. “Once the steam is ready, it will be offered to KenGen by the independent power producers (IPPs) at nominal rates for conversion to electricity,” Mr Murungi said.
The potential for geothermal power in the country is estimated at 7,000 megawatts. However, KenGen will continue with exploration in the Olkaria domes, Eburru and Menengai areas, while the new company will commence exploration in new areas.
Mr Murungi said the two companies would not conflict in their roles, with GDC relying on KenGen until it sets up its operational structure.
Kenya has been diversifying its sources of energy to counter the volatile international crude oil prices which have partly been blamed for the high inflation rates. Orpower chief executive officer, Mrs Yehudit Bronicki, said the plant will save the country 120,000 tonnes of imported oil every year.”
Source: Saturday Nation