By Macharia Kamau
Longonot,Kenya: Kenya Power has signed a power purchase agreement with an electricity generation firm that is developing a geothermal power plant in Longonot.
The 140 Megawatt power plant — planned to start operations in 2018 — will be developed, owned and operated by the Africa Geothermal International Kenya Limited (AGIL) at Longonot, close to the Olkaria Geothermal fields.
This will make the firm among the first private sector players to make major investments in geothermal electricity generation.
AGIL was given a geothermal resource license by the Energy Ministry for exploration and building a geothermal power plant in an area in Longonot in 2009. The license covers 132 sq kms of land. The PPA has a term of 25 years after the power plant commercial operation date of 2018.
Kenya Power Chief Executive, Eng Joseph Njoroge, said the PPA is an important step forward in enabling the country meet its Vision 2030 utilising geothermal power that is cost effective and environmentally friendly.
He added that geothermal power is part of the country’s strategy of diversifying the generation mix and reducing the overall cost of electricity because it does not have fuel cost.
Not dependent
“Geothermal, unlike other renewable energy sources such as wind, solar or hydroelectric, is not dependent upon weather. Geothermal power plants in Kenya and around the world operate at high capacity factors and provide needed base load generation,” he said.
Kenya has potential to generate upwards of 7,000 megawatts of electricity from its geothermal resource, much of which is located along the Rift Valley. Only a fraction of this has however been exploited owing to perennial underinvestment in the energy subsector.
This has, in turn, led Kenya to over rely on hydro generated electricity that usually has to be complimented by electricity generated by power plants that use costly fossil fuels when the water levels at the dams reduce. The cost of running on diesel-generated electricity usually sees regular spikes in the cost of electricity in the country.
Firms in the private sector have shied away from the capital-intensive geothermal power plants. At the moment, KenGen — which is a quasi-state corporation — is the biggest player in the sector, and has power plants with a combined installed capacity of 140 megawatts at Olkaria. It however plans to increase this by 280 megawatts by mid next year.
Guarantee market
The Power Purchase agreement will guarantee AGIL a market for the electricity generated at Longonot for 25 years beginning 2018.
Fassine Fofana chief executive AGIL said the company has performed all of the surface exploration and development activities to ready the project for drilling expected to commence in early next year.
