Kenya to be leader in geothermal production

November 7, 2011
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Eddy Njoroge and Junzo Shimizu from Toyota Tshusho
NAIROBI, Kenya, Nov 7 – Kenya is poised to be Africa’s leading geothermal producer, with the construction of a 280 megawatt (MW) plant by 2014.

The Kenya Electricity Generating Company (KenGen) on Monday signed a deal with a consortium of Japanese and South Korean entities, for a contract worth Sh97.5 billion.

KenGen Managing Director Eddy Njoroge said the extension of the Olkaria I plant and construction of the Olkaria IV plant is expected to boost the country’s geothermal power to 5000MW by 2030.

“About 4679MW will come out of geothermal in the next 18 years. In terms of cost we’re talking about $17 billion (Sh1.6 billion),” he said.

The project that will add to the capacity of the two existing geothermal plants in Olkaria that cumulatively produce 150 MW, will be facilitated by Toyota Tsusho Corporation and Hyundai Engineering & Construction among other financiers.

The Kenyan government has set aside Sh31.7 billion ($328 million) of the total cost to cover drilling expenses.

KenGen’s goal of generating 5000MW in geothermal power over the next 18 years, could rival other global producers such the United States that churns out 3000MW and the Philippines with 2000MW annually.

Benefits anticipated from the project include maintaining a reserve margin of between 15 and 30 percent.

Today, only a fraction of Kenya’s geothermal potential is being exploited, with 200MW of the energy resource actually drilled out of an estimated 7000MW.

Though the initial investment in geothermal energy has been considered expensive, KenGen assures the resource will be a better energy choice, as it provides the lowest cost generation in the long-term.

“The project will be the largest single geothermal plant in the world. To put its size in perspective it will cost approximately Sh137 billion, which is three times the cost of the Nairobi-Thika superhighway,” KenGen Chairman Titus Mbathi said.

With Kenya’s peak power demand expected to reach 15,000MW by 2030, KenGen is looking to increase the energy capacity to 17,000MW by that time.

In the short term, however, KenGen plans to inject an extra 202MW into the national grid as early as next year through an energy mix of thermal and hydro power and renewable energy.

While in the next six years the company plans to modify the current energy mix that is heavily hydro-based, to offering 49 percent geothermal power generation by 2018.

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