Geothermal plants to ease pressure from bills

Kenya Electricity Generating Company shareholders tour the Olkaria geothermal plant in Naivasha on September 21, 2012.

What you need to know:

  • The cost of electricity is expected to reduce by over half starting July this year following the completion of major geothermal projects in Kenya.
  • “Completion of these two projects (Olkaria I and IV) will significantly address power costs in Kenya. This will boost the competitiveness of Kenya’s economy."

The cost of electricity is expected to reduce by over half starting July this year following the completion of major geothermal projects in Kenya.

According to Energy cabinet secretary Davis Chirchir, power charges could reduce by 63 per cent from July once the 280 megawatt Olkaria I and IV geothermal plants start working. 

This would be a relief to households and businesses that are currently facing huge power bills — pushing up the cost of living.

“Completion of these two projects (Olkaria I and IV) will significantly address power costs in Kenya. This will boost the competitiveness of Kenya’s economy,” Mr Chirchir said.

Once the plants start running from July as planned, coupled with the roll out of other projects expected to produce 5,000MW of power to add to the national grid, consumers could pay Sh6 (7 US cents) or less per kilowatt hour from the current Sh16 (19 US cents).

“The cost of producing electricity using geothermal steam can go as low as 2 US cents, making it possible to lower the cost of energy substantially,” he said. Mr Chirchir was speaking during a tour of Olkaria projects.

He was accompanied by Kenya Power and Kenya Electricity Generating Company (KenGen) top brass.

COMMISSIONING NEXT MONTH

The Olkaria I and IV plants are set to produce 140MW each and they are expected to be commissioned next month. Plans are in the pipeline to build more plants at Olkaria V, VI and VII sites to generate 350MW of power.

At the moment, the government is implementing a 5,000MW power generation programme to add to the current 1600MW production capacity.

Wind and geothermal sources are set to produce energy cheaply, an effect that is to be felt within the economy. Geothermal sources account for 13 per cent (or 205MW) of the national energy generation capacity currently.  

Mr Chirchir also indicated that the government was carrying out geothermal feasibility studies in Suswa.

“We will soon be drilling the first wells to establish the true potential of Suswa, though scientific studies so far hint at a capacity of over 400MW,” he said.

BOSSES CHOSEN

Last week, Mr Chirchir appointed KenGen, Kenya Power and Energy Regulatory Authority (ERC) bosses. Mr Ben Chumo retained his post at Kenya Power, while Mr Albert Mugo was picked to lead KenGen.

Mr Laurencia Njagi is to steer ERC, replacing Mr Kaburu Mwirichia. Mr Fredrick Nyang had been at the helm of ERC in an acting capacity.

The appointment of Rural Electrification Authority (REA) boss is still pending. But Mr Chirchir said it would be done once the REA board is fully constituted.

The energy heads have a full intray of ensuring Kenya meets its target — generating and distributing 5,000MW in the next four years.

Kenya Power is planning to spend Sh156 billion in distribution network upgrade to enhance efficiency within the next five years.

KenGen, together with Geothermal Development Authority, have an uphill task of initiating power projects that could see about 4,340MW added to the national grid, bringing down the cost of electricity.

Its distribution network, which has been prone to vagaries of weather and incapacitation, needs major improvements to accommodate the planned 5,000 megawatts of energy the country plans to generate in the next four years to support the growing energy needs in the country. Kenya is currently operating at 1,600 megawatts capacity.

Improved electricity transmission is also expected to lead to reduced costs of power that have made the cost of doing business high.

Kenya Power is also planning to connect its 2.3 million customers on the fibre optic network, a challenge that Mr. Chumo now faces.

The government is already in the process of engaging the private sector in the implementation of projects like the 400MW Menengai Phase I Geothermal Development Project; the 800MW Menengai Phase 2 Geothermal Development Project; the 800MW Bogoria Silali Phase 1, 560MW Geothermal Project Pipeline at the Olkaria Field; 800MW LNG (liquefied natural gas) Power Plant at Dongo Kundu; Generation of 980MW Coal power plant by Independent Power Producers on a Build, Own, Operate and Transfer basis for 20 to 25 years.