Government to contract more firms in harnessing Kenya’s geothermal stocks

What you need to know:

  • Energy Cabinet secretary Davis Chirchir told the World Geothermal Conference held in Manilla, Philippines, that Geothermal Development Associates, Quantum Power and Ormat Technologies, are “coming soon”.

Three new private investors are set to be awarded licences to tap into the vast geothermal resources in Kenya’s Rift Valley.

Energy Cabinet secretary Davis Chirchir told the World Geothermal Conference held in Manilla, Philippines, that Geothermal Development Associates, Quantum Power and Ormat Technologies, are “coming soon”.

Mr Chirchir said two other corporations Schlumberger and Baker Hughes have already set up shop and are providing technical support to fast-track geothermal development.

Mr Chirchir is leading a government bid for Kenya to host the 2020 World Geothermal Congress. The other competitors are Chile, Iceland, Netherlands, Germany, Philippines and USA.

The investors will join Orpower IV, Oserian Development Company and Africa Geothermal International Limited, Marine Power Inc, the existing private prospectors, alongside the state-owned KenGen and the Geothermal Development Company, which are exploiting the resources, at Olkaria and Menengai fields.

Quantum Power of Finland is among bidders that have been short listed in the country to build coal and Liquefied Natural Gas plants as energy policy makers move to attract investment in the country’s extensive geothermal resources.

Ormat Technologies, a US firm, designs, builds, owns and operates geothermal power plants in the United States, Nicaragua, Kenya and Guatemala. As of February 2011, the company had installed a generation capacity of 553 megawatts.

Government is committing a substantial amount of resources into building up its geothermal infrastructure, with investors expected to partner with GDC in upcoming projects at Menengai and Olkaria that are being implemented through Public Private Partnerships. GDC is developing the steam resource at four primary areas Menengai, Bogoria, Silali and Suswa).

The government is also planning on partnering with Independent Power Producers to sell geothermal steam/brine at the plant, for use by the IPPs to convert the resource to energy, through a power conversion contract.

GDC is also evaluating potential joint development agreements with private developers to help develop the new steam fields. The Government is encouraging private development of additional resource areas through concession agreements with private IPPs.

“Investments in geothermal energy guarantees investors significant returns,” said Chirchir, adding that the alternative energy is expected to play a key role in the Government initiative to provide an additional 5,000 MW by December 2016.

Kenya has an installed capacity of 267MW from geothermal sources but seeks to increase its generation capacity.

Largest in the world

At the Olkaria Geothermal Project, a 280MW power plant is under construction and will be commissioned in June this year. This is so far the largest single geothermal development in the world.

“If awarded to Kenya, this will be the first time the congress will be held in Africa; it will positively impact Africa’s geothermal sector. This bid has been endorsed by Government of Kenya and supported by United Nations Environment Programme and the African Union Commission ,” the CS told the conference.

Last month, KenGen tested one of the biggest geothermal wells in Olkaria. The 30MW well, the largest of its kind in Africa. “This discovery underlines the role renewable energy will play in powering Kenya’s development,” said Mr Chirchir.