KenGen fears declining steam could affect power production

By JAMES ANYANZWA

Power producer KenGen has raised concerns over the declining levels of steam production. This has raised fears that the low levels could negatively impact on the geothermal power production in the country.

Drilling of wells

Acting Managing Director and Chief Executive Simon Ngure noted that the country is staring at a two per cent drop in steam production annually.

He also called for increased investments in the drilling of more wells. “We are facing a two per cent decline in steam production every year. This means we need to drill fresh wells,” Eng Ngure told a parliamentary Public Investment Committee last week. He said 12 new wells — both production and re-injection wells — are to be drilled each year to sustain the drive for geothermal energy in the country.

“We shall need additional steam at Olkaria mainly because of the status of the power stations in that region and the other 14 areas which are still unexplored apart from Menengai,” he said. Ngure said the state firm would be drilling 80 steam wells in Olkaria over the next two years.

Exploiting geothermal energy requires heavy initial capital investment, a factor that has scared off some investors.

The up-front costs of drilling wells are still significant. It is estimated that the cost of drilling one well generating 5MW of power stands at $6.5 million (Sh552.5 million). The government has so far invested $280 million (Sh23.8 billion) in drilling steam wells in Olkaria.

Risky venture

Kenya plans to tap at least 5,000 MW of geothermal power to wean the country off unreliable hydropower. These have made Kenya an expensive destination to the investors in terms of the cost of doing business. The capital intensive nature of the business and the risk of drilling wells that turn out dry have been cited as key reasons as to why the private sector has shied away from investing in geothermal power generation. The state has committed itself to meeting the initial capital for developing steam fields, thereby meeting the upstream risks and making investment in the geothermal sector attractive. Steam is trapped within the rock layers and can be accessed through drilling.

The steam is then harnessed to produce electricity.

Kenyan electricity consumers are currently facing the wrath of frequent power outages and inflated power bills owing to perennial over-dependence on unreliable hydropower and diesel-generated power.

The Rift Valley region contains 14 geothermal sites. Although the country has the potential in geothermal power estimated at over 7000 MW, this resource has been lying idle for ages with the sector contributing a mere 167MW to the national grid.

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