Kenya Goes Clean And Green - African Business Magazine
Kenya Goes Clean And Green

Kenya Goes Clean And Green

Some 90km and 180km northwest of Nairobi, at Olkaria and Menengai, respectively, lies Kenya’s answers to clean energy sources. Here, in the volcanic calderas, are to be found geothermal wells providing low carbon energy and boosting a resource-efficient green economy.

The Olkaria Geothermal Power Plant, commissioned in 1981, supplies 200MW to the national grid. More geothermal generation will come on stream in coming years.

Apart from several Independent Power Producers (IPPs), Kenya has four major inter-related power companies involved in the energy business. These are: Kenya Electricity Generation Company (KenGen), responsible for publicly funded power generation projects; Kenya Electricity Transmission Company (KETRACO), tasked with accelerating “the development of transmission infrastructure”; Kenya Power, which “transmits, distributes and retails electricity”; and lately the Geothermal Development Company (GDC), mandated to “develop steam fields to promote geothermal energy and reduce over-dependence on hydro power.” Both KETRACO and GDC were incorporated by the government in 2008.

With the global challenge posed by climate change, Kenyan has been reaching out to its traditional development partners and the private sector to boost its renewable energy sector while pursuing a clean energy policy.

The country’s principal geothermal energy agency, the GDC, was created with the aim of fast-tracking green energy. Since 2009, it has conducted surveys seeking to tap steam energy benefits and widening Kenya’s energy resource base. GDC’s sole responsibility is to drill, tap and harness steam, after which KenGen or IPPs are invited to put up conventional geothermal power plants and generate the power.

In 2010, GDC shipped in two drilling rigs from China Petroleum Technology and Development Corporation and within a year had found enough steam to warrant an installation of a major power plant.

Kenya’s demand for power has been rising at 8% yearly thanks to its growing economy. KenGen, the country’s electricity generating company, says about 800MW of power is needed annually to meet demand. At present Kenya has 1,600MW of installed power capacity, with projections that by 2018 demand will have shot to 15,000MW. The country is hoping to generate 4,700MW from geothermal wells in Kenya’s Rift Valley, which is said to have an overall potential of producing between 7,000MW and 10,000MW of power.

Kenya hopes to spend some $1.4bn to construct a new 280MW geothermal power complex in Olkaria, Naivasha. The project will consist of two power plants, each expected to generate 140MW by 2014 to increase the current geothermal capacity from 200MW to 400MW. Of Kenya’s 17,000MW needed to realise its ambitious development paradigm Vision 2030, geothermal energy has been identified as a sustainable and clean energy source which is expected to contribute 4,000MW and reduce carbon emissions by 2m tons annually.

In November 2011, Toyota Tsusho Corporation of Japan and Hyundai of South Korea were awarded a $383m contract to expand Olkaria 1 and a new installation at Olkaria4. The turnkey deal involves the delivery of a full set of geothermal power plant facilities including associated civil engineering works. Tsusho will oversee the overall implementation of the project while Hyundai will supply the steam generators. This development will increase the country’s electricity reserves by 30% and give Kenyan consumers reprieve in terms of monthly power bills. This project is expected to be up and running by February 2014 when the Japanese and South Korean contractors complete the engineering works.

“We are shifting into alternative sources of energy that will provide cheaper electricity,” KenGen’s managing director Eddy Njoroge says. “Geothermal energy has high initial investment but provides cheaper electricity in the long run. We need 4000MW from geothermal by 2030.”

Geothermal is the answer    

The African Development Bank (AfDB) approved a $124m loan in December 2011 and a further $25m grant to support the Menengai Geothermal Project in the Rift Valley, estimated to have a geothermal capacity of generating 1,600MW. GDC has its sights on drilling 120 wells within the Menengai project zone. “As a nation we are inching closer to an era of affordable, reliable and clean energy.” Dr Silas Simiyu, GDC CEO, says. “It’s the geothermal energy portfolio that will drive the country towards the Vision 2030.”

AfDB funds will go into a $503m pool from the European Investment Bank (EIB), Agence Française de Développement (AFD) and the Kenyan government to develop the first phase of Menengai to generate some 400MW. The Menengai Geothermal Project is the first ever project under the Climate Investment Funds (CIF) dedicated to a low-income African country to be approved by the bank. It will provide clean energy to 500,000 households, 300,000 micro-enterprises and 1000GWh to industry.

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Written by African Business Magazine

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