New geothermal well heralds cheap power era for suffering Kenyans
At last, some good news from the energy sector. The State-owned Geothermal Development Company (GDC) last week sank its first successful geothermal well in the Menengai fields. The well has the capacity to run a 10MW electricity plant.
This is not the first successful geothermal well to be drilled in Kenya. As a matter of fact, geothermal exploration has been going on in Kenya since the 1950s.
The point of departure here is that we have successfully opened new geothermal fields. Until now, exploration activity has centred around the Olkaria area.
The Menengai fields have the potential to produce 1,600MW, compared to the total current installed capacity for the whole country of 1,400MW. Menengai is what can save electricity consumers from the tyranny of expensive diesel generators. Menengai is only a short distance from Nakuru Town, so transmission costs will be much lower.
The second significant development in the energy sector is the successful conclusion by KenGen of procurement of a new 280MW geothermal power plant at Olkaria.
In the past, a handful of Chinese turbine manufacturers dominated these tenders and there was no competition to speak of. There was even a time when one transaction was delayed for months because the World Bank, which was funding the project, refused to issue a no-objection certificate on account of lack of competition. We paid dearly for the delays.
This time around, French turbine manufacturer, Alstom Ltd, decided to join the fray. They spoiled what has all along been an exclusive Chinese turbine manufacturers’ party. The result is that KenGen is going to purchase turbines at nearly half of its budget for what is going to be the largest geothermal plant.
If we are serious about giving the consumer in Kenya cheaper power, we must work to fully exploit the comparative advantage of this important resource that we are fortunate to have.
The current estimate is that Kenya has vast geothermal resources concentrated along the Rift Valley and other parts of the country with a potential of 10,000 megawatts. We have resources in Longonot, Suswa, Lake Baringo, Turkana, and Homa Hills in South Nyanza.
In the past, we have not been able to take full advantage of geothermal energy because of the high up-front costs. Billions are spent on digging wells, then the developer has to wait long periods for sufficient steam capable of supporting a large power plant to gather.
Indeed, some of the wells KenGen is now using to develop the 280MW power plant were sunk as far back as 2005 by the Chinese.
At Sh800 million a well, the Chinese, who have been bagging one drilling contract after another, have been providing services at astronomical costs. The good news is that GDC is following a new model.
In the first place, it has, since last year, bought its own drilling rigs with money from the government.
This means that we do not have to hire those expensive Chinese rigs any more. The well GDC completed last week was done at an estimated cost of Sh250 million.
To reduce up-front costs even further, GDC’s approach is to employ small generating units known as well-head generators to immediately start producing power from the wells.
We are not going the conventional route of waiting to build a huge power plant before we can start exploiting the steam we have discovered. This means that the steam from Menengai can be used to produce power in a matter of months.
The well-head generator technology is not new in Kenya. Flower farm Oserian is already generating power from a well-head generator.
The Menengai discovery is an exciting development in many other ways. At the rate of 10MW a well — and considering that GDC has two rigs — it means that drilling 10 wells in a year will be possible.
Seven such wells will equal the Olkaria II power plant that took the government almost 15 years to set up. If we can cut the cost of drilling by half and eliminate the long period, this is clearly our best chance of giving consumers in this country low-carbon and reliable electricity. It is the safest route to sustainable “power to the people”.
Let us all join GDC in celebrating the successful opening of the Menengai geothermal fields.
