Kenya aiming to double geothermal capacity by 2030

Geothermal power generation at Olkaria Photo: BusinessTimes

When Kenya opened the Olkaria power plant four decades ago, it was seen more as a research project than a commercial venture. The facility is located in Hell’s Gate National Park, a barren zone of volcanic rock that is permeated by sulphurous gases and is mainly populated by warthogs and zebras. The untested and costly geothermal technology was experimental at best, with the first unit expected to power 10,000 homes. Today, Olkaria generates more than 50 times, and the technology is well on its way to becoming the backbone of the country’s power grid.

“Our future strategy is geothermal energy,” says Rebecca Miano, Chief Executive Officer of the state-owned Kenya Electricity Generating Co., or KenGen for short.

For decades, Kenya and the surrounding countries have focused on hydropower and oil-fired thermal power plants, but recently they have recognized the potential of their vast underground energy resources. The region sits astride the Great Rift Valley, an area where tectonic plates meet and bring the magma in the Earth’s core closer to the surface. It’s one of the most active volcanic zones in the world – Kilimanjaro lies in its heart – with dozens of hot springs indicating the intense heat just below.

Kenya gets almost half of its electricity from geothermal systems, more than any other country, according to researcher Fitch Solutions, and is well on the way to increasing this to almost three-fifths by 2030.

Olkaria, the continent’s first geothermal power plant, is fed by pipes drilled nearly 2 miles into the earth’s crust. These supply high-pressure steam with a temperature of up to 350 ° C, which is used to drive huge turbines. Over the next five years, KenGen plans to invest $ 2 billion in four new power plants and other modernizations in Olkaria, almost doubling Kenya’s geothermal capacity to more than 1.6 gigawatts – enough to power a city of 1 million people To supply electricity. In the longer term, KenGen predicts, the country has the potential to generate at least six times as much.

The biggest obstacle in Kenya and across the region has long been initial investment. The turbines and other above-ground equipment add up to about $ 3 million per megawatt, but the real cost is below the surface. A single well can cost up to $ 6 million, and each unit typically requires multiple attempts to drill to find enough steam to keep the turbines running; For the first station in Olkaria, KenGen drilled 33 holes. Geothermal energy “was seen as too risky early on, and high upfront costs were an obstacle,” says Peter Omenda, a consultant who has worked on numerous projects in the region. While advances in technology have brought the price down and made it easier to get more steam from each well, drilling costs remain a significant hurdle.

To offset the costs, Kenya founded the state-controlled Geothermal Development Co. in 2008 to shoulder the investment risks associated with the technology. Similar to oil wildcaters, the GDC drills wells, and when it discovers a field with potential, it sells the steam to KenGen or others who build the above-ground infrastructure. GDC has raised $ 746 million, mostly from international lenders like the World Bank, to develop Menengai Crater, a site about 60 miles north of Olkaria where three independent power producers are expected to open geothermal plants in 2023 after years of delays become.

Competition from other renewable energies that can be built faster and promise a faster return on investment is another problem. Kenya gets around 12% of its electricity from wind and solar, up from less than 1% five years ago. In contrast to these technologies, however, geothermal energy does not require a stiff breeze or sunny skies to ensure a steady flow of energy. And compared to hydropower, which Kenya also relies on to generate 100% renewable energy by 2030, geothermal systems are not threatened by droughts or warlike neighbors that could interrupt the water supply.

“Geothermal energy delivers clean, uninterrupted baseload power that other renewable energy sources cannot,” said Derrick Botha, analyst at Fitch Solutions.

For KenGen, geothermal energy is becoming an important source of sales abroad. In February the company won a 6.6 million deal KenGen says it is in talks with Rwanda and the Democratic Republic of the Congo as governments across Africa embrace geothermal energy. “It will be exciting to see capacity being transferred to other countries and the opportunity to do business again,” said Marit Brommer, executive director of the International Geothermal Association, a group that promotes the technology. “Geothermal energy will give many communities access to electricity at an affordable price.”

Original article published by Bloomberg

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