Kenya’s geothermal guarantee

As part of its Vision 2030 national development strategy, Kenya has set an ambitious target of increasing geothermal power capacity from 660MW, the capacity in 2017, to 5,000MW by 2030.

According to Kenya’s Energy Regulatory Commission (ERP) this would represent about a quarter of Kenya’s total installed power capacity, which is projected to grow to 19,200MW by 2030.

Geothermal power development is centred around Kenya’s Rift Valley area, with the Olkaria plants, located in Hell’s Gate National Park, taking the lead. Smaller geothermal power plants dot the Rift Valley – all the way from the Ethiopia border in the North to Tanzania border in the South. Already, a new additional Olkaria VI geothermal plant is under construction and, when fully delivered, is expected to add 86MW. “Upon completion, the Olkaria VI will be the largest single geothermal plant in the world,” observed Cyrus Karingithi, a geologist and manager with the Kenya Electricity Generating Company (Kengen), a government owned firm behind the project and most of the Olkaria plants.

For over 70 years, KenGen has drilled more than 310 wells around Olkaria, 125 of them still in operation today. Two bigger power plants became operational in the 2014-15 period. With its wide experience in managing geothermal plants, Kengen has also secured US$5.8mn contract to drill 12 geothermal wells in neighbouring Ethiopia as well as a US$6.6mn contract to drill wells in Djibouti.

Last year, Kenya commissioned two geothermal power plants in Olkaria namely, the 165MW Olkaria V Units 1 & 2 and 83.3MW Olkaria I Additional Unit 6. The two plants were financed by the Japanese Government through the Japan International Cooperation Agency.

Two firms, Toyota Tsusho of Japan and Hyundai Engineering Co., Ltd. of Korea have jointly been part of the Olkaria geothermal project supplying equipment to the site.

In collaboration with Toshiba Corporation, the two firms have been involved in the construction of the steam turbine generators in the Olkaria power plants.

Another government firm, the Geothermal Development Company (GDC), is involved in drilling wells in the Menengai geothermal field, just outside Nakuru City for its private partners. Among these partners is Sosian Menengai Geothermal Power, an Independent Power Producer (IPP). GDC has also been involved in appraisal drilling in Baring-Silali geothermal site, further north of the Rift Valley.

On the world stage

Kenya is the eighth largest producer of geothermal energy in the world, behind nations such as the United States, the Philippines, Indonesia, Turkey and New Zealand.

A study by the African Development Bank (AfDB) indicates that for Kenya to attain its geothermal development targets, private investment is critical in exploration and field development. Experts say the country has some 10,000MW of untapped geothermal power resources, and are calling for future expansion and investment. Already, global firms have increasingly shown interest in exploiting geothermal development in Kenya.

Among the recent entrants is Globeleq, a British-owned private power firm that recently signed a US$72mn debt financing agreement with AfDB for the development of 35MW Menengai geothermal project in Nakuru County.

Globeleq, which is owned 70% by British International Investment and 30% by Norfund, is providing equity, project development, and construction management experience.

“Our focus is on quality investments which utilise renewable energy sources to create clean, reliable and cost-effective energy for the country and be an active part of the solution to the climate crisis. We are very excited to collaborate with our partner GDC in bringing this important project to fruition and look forward to further developing the Menengai geothermal complex,” observed Mike Scholey, Globeleq chief executive officer.

The Climate Investment Funds and the African Development Bank has provided resources to support the first phase of the Menengai project.

“AfDB has provided US$29.5mn as senior debt and mobilised US$22.4mn co-financing, having earlier invested US$145mn to develop the Menengai steam field,” observed Kevin Kariuki, vicepresident, power, energy, climate and green growth at AfDB commenting on the Globeleq deal.

Kenya’s new President, William Ruto, emphasised the need to continue on this path to 100% renewables during his inaugural address a few months ago. Together with wind, hydro, and solar, the country was able to produce around 90% of electricity last year through renewables and the continued development of geothermal will ensure this rate remains as high and get closer to the 100% objective. ■