New rigs to cut by half cost of drilling geothermal power

Increasing direct involvement, including acquiring more drilling rigs, is part of a strategy the country is employing to cut the costs of exploiting its geothermal power potential.

Kenya, through the State-owned Geothermal Development Company (GDC), has already acquired two rigs that are expected to lower the costs by almost half.

The two are expected to start working at the Menengai Crater in a week’s time.

President Kibaki is expected to commission the drilling process at the site by the end of February.

“With the new technology that we have in place, the cost of drilling will significantly drop and this can only be achieved by increased funding for the company over the next three years,” Mr Silas Simiyu, the GDC managing director, told three parliamentary committees on Monday.

The current cost of sinking a steam well is estimated at Sh520 million but is set to come down to Sh250 million with the acquisition of the drills.

GDC intends to acquire 12 deep drilling rigs within the three years and continue hiring three others for use at Olkaria.

The rigs currently in use at Menengai, though designed in the US, were acquired from China.

According to the company, Menengai has the potential of over 1,000 megawatts of geothermal power that can be fed to the national grid.

The parliamentary committees included that of energy, agriculture and budget on a two-day tour of the plants and sites planned for geothermal production.

The country depends largely on hydro-electricity from the Seven Forks power stations in Tana River and independent power producers who rely on fossil fuels for generation.

Kenya’s current power demand stands at 1,070 megawatts against an installed capacity of 1,160 megawatts.

During the 2010/2011 financial year, Treasury allocated Sh6.7 billion to GDC. Mr Simiyu, however, says the amount does not fully cater for its needs.

The firm is pushing for an increased allocation of up to Sh15 billion annually over the next three years to achieve its mandate.

“We have seen what they have done and are satisfied with their work. We shall now go back and make appropriated recommendations on the way forward,” said Mr James Rege, chairman of the Parliamentary Committee on Energy and Communication.

Additionally, the company has received commitment from a number of donors for support in geothermal power generations.

They include Sh7.3 billion in pledges by, among others, the Bank of China Exchange.

'The government must now demonstrate commitment on its part by putting in more funding to the company just as the donors have pledged,” said Mr Simiyu.