Saturday, July 21, 2012

Kibaki to launch construction of Sh82bn geothermal plant

By PAUL WAFULA pwafula@ke.nationmedia.com

President Kibaki will on Monday preside over the groundbreaking ceremony for a Sh82.5 billion geothermal power project, officially kicking off the construction of Kenya’s single largest green energy generation plant.

The 280MW Olkaria geothermal project (artist’s version right) will encompass two plants, each having two units and generating a total of 140MW of electricity from geothermal sources.

The project will be based in the Olkaria complex where two other geothermal plants – Olkaria I and Olkaria II – are located and is expected to cost $981 million, or Sh 82.5 billion.

The country’s main power generator Kenya Electricity Generating Company (KenGen) reckons the project will be its greatest asset to move the country away from over-reliance on expensive hydro-generation, which is unpredictable given that it relies on the weather conditions.

“This project is the most significant power project ever undertaken in our country’s history. It will raise our total capacity by 25 per cent at a go, pumping in 280MW of power in 2014,” KenGen managing director Eddy Njoroge said in an interview ahead of the groundbreaking ceremony.

The plant will be the second- biggest infrastructure project after the multi-billion-shilling Lamu Port and the Lamu-South Sudan-Ethiopia Transport (LAPSSET) corridor inaugurated by President Kibaki this year.

KenGen says the contractors are already on site and have laid the groundwork for the construction expected to be completed in two years.

The main plant will be constructed by a consortium of contractors including Japan’s Toyota Tsusho Corp and South Korea’s Hyundai Engineering & Construction.

Sinopec of China is also on site, developing a steam field, the construction of a sub-station and transmission is in the hands of KEC of India while New Zealand’s Sinclair Knight Mertz.

The power generation firm said it is finalising other preparatory stages including relocating families that will be displaced by the project.

According to new timelines, local infrastructure and resettlement of people around the project that began last month should be completed by February 2013.

The Olkaria complex is currently generating 15OMW of power. Once the 280MW project is complete in 2014, the area will be generating a total of 430MW of electricity, which is slightly more than 40 per cent of total generating capacity by KenGen.

The plant is funded jointly by the Kenya Government, World Bank, Germany’s Development Bank KfW, European Investment Bank, Japan International Corporation Agency and French Development Agency, AFD and KenGen.

It comes at a time when the country is grappling with a steady increase in power demand which has seen the reliance on independent power producers, most of whom who use expensive diesel generators.

Kenya plans to add between 1913 MW and 2213MW to the national grid in the next three years.

According to KenGen, this project will just be the first on its list.

“Studies have confirmed a further 560MW potential in the Olkaria complex. This is our next focus after the 280MW project. Our plans are to have geothermal contribute above 50 per cent of our total electricity capacity in five years time, so that the country can avoid expensive modes of generation,” Mr Njoroge said.

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