Kenya to Investigate Potential of Geothermal Power

Kenya, plagued by electricity shortages like many of its East African neighbors, has awarded Japan’s Toyota Tsusho Corp. and South Korea’s Hyundai Engineering Co. contracts to build $420 million in new geothermal plants. The contracts for the Olkaria I and Olkaria IV geothermal power plants represent Kenya's largest ever geothermal plant project and are Toshiba's first African contracts for supplying geothermal power equipment.

The contracts further strengthen Japan's role in developing Kenya's geothermal power generation capacity. Toshiba was selected by Hyundai Engineering to supply the turbines and generators for the project.

The two Asian nations will build a new 140 megawatt geothermal plant and expand the capacity of existing facility to 185 megawatts from 45 megawatts.

During a contract signing ceremony in Nairobi Kenyan Prime Minister Raila Odinga said, "These projects mark the beginning of Kenya's journey to transform its energy sector and put the country on the path to green economic growth."

Toyota Tsusho Corp. and Hyundai Engineering Co. succeeded against four other bids that included Japanese Mitsubishi Corp., which had earlier been involved in a geothermal project in Olkaria.

Nyoike said that the country’s increased interest in geothermal power was in line with the government’s efforts to shift the country’s power generation mix towards being predominantly geothermal from its current reliance on electricity generated by hydroelectric power, which is prone to erratic weather.

The Olkaria I and Olkaria IV geothermal power plants are to be built in the Rift Valley, 65 miles northwest of Nairobi. When complete, the geothermal power plants will be the largest power generation complex in Kenya, increasing the share of geothermal power in Kenya's supply mix to approximately 25 percent. Eddy Njoroge, managing director of Kenya Electricity, told reporters, “We are hoping that by February 2014 we will have the first unit generating and by May 2014 we will have the second unit.” Njoroge added that next year the Kenyan national electrical grid would gain an additional 202 megawatts from a mix of geothermal power, renewable energy and rehabilitation of an existing hydropower dam.

Kenya is Africa’s first nation to drill for geothermal power and is seeking to tap the Rift Valley’s vast steam reserves.

Kenya, East Africa’s biggest economy, intends to spend up to $50 billion over the next two decades to meet the country’s rising electricity demands, which government officials estimate is rising at 13.5 percent per annum. Four months ago Kenya’s Energy Regulatory Commission said that it hopes to generate about 27 percent of the country’s electrical power from geothermal sources by 2031. Kenya's Rift Valley, in the western part of the country bordering Uganda, is currently estimated to contain a projected 7-10 gigawatts of geothermal power potential. The use of geothermal power worldwide has grown steadily over the last several decades, in 2010 reaching 10.7 gigawatts of global installed capacity.

Not resting on their laurels, Kenyan officials are in Tunisia to negotiate for additional funding to speed up the country’s geothermal energy projects. Kenyan Energy Permanent Secretary Patrick Nyoike recently led a team of Energy Ministry and state-owned Geothermal Development Company officials on a visit to Tunis to solicit interest and funds for new geothermal sites in the Menengai area of Nakuru. Nyoike said “Our strategy is to focus in Menengai in order to sustain investor interest. We have some $187 million for steam development for Menengai from the World Bank.”

The French Development Bank has also pledged $120 million to the Geothermal Development Company which will arrive in January, with the Geothermal Development Company using the funds to drill 200 wells in the Baringo, Bogoria, Paka, Chepchuk, Korosi and Silale areas, along with another nine wells to be dug in the Olkaria fields. The cost of drilling a single geothermal well is estimated at $6.5 million, with supporting infrastructure costing an additional $8.5 million.

While not technically a "renewable" energy source in that its reserves might be depleted if not managed effectively, geothermal resources present a very clean, reliable and abundant source of energy. And if the earth’s core cools, Nairobi will probably have other more pressing issues to worry about.

By. John C.K. Daly of Oilprice.com