GDC seeks new revenue streams with geothermal spa

Aerial view of Olkaria Geothermal Power Station. [Wilberforce Okwiri, Standard]

The Geothermal Development Company (GDC) plans to set up a complex at its fields in Menengai, Nakuru County that will use geothermal steam.

The firm is seeking to monetise the geothermal wells it drilled in the area that have hitherto remained idle for years.

This is as private sector companies contracted to build power plants and generate power using the steam experience major delays.

GDC said it plans to build a wellness spa, geothermal heated public pools as well as secluded high-end spas and cottages that are both heated and cooled by geothermal steam.

“GDC intends to set up a geothermally heated spa-complex in Menengai geothermal field consisting of cold swimming pool, geothermally heated swimming pool with public hot pools, satellite private hot pools, steam heated sauna and baths, therapeutic facility and geothermally heated and cooled cottages within the vicinity of the Spa complex,” said the firm in documents inviting firms to express interest to undertake a feasibility study that will inform how GDC can invest in alternative uses for geothermal.

Geothermal steam is primarily used for electricity generation but can also be used by other industries.

Aside from wellness and hospitality as is the case with geothermal spas, the steam can also be used in dairy processing and greenhouse farming, which GDC plans to do even as the private sector contracted to build power plants continue with electricity generation.

GDC has identified several resource parks where various investments will be located.

One such resource park is for the establishment of a geothermal-powered spa complex. The detailed feasibility study is expected to establish all the necessary factors that need to be considered before such an establishment is set up,” said GDC in the tender documents published last week.

In milk pasteurisation, for instance, GDC has in the past said milk processors can save up to 70 per cent of their heating costs by using geothermal steam.

The downside is that to take make use of the steam, companies have to set up near the source, in this case, Menengai.

GDC has in the past said it planned to set up an industrial park, with expectations that it would attract investors keen to tap into the steam for alternative but direct uses.

GDC drilled geothermal wells and later built the steam gathering systems as it sought to derisk the area, with private power firms previously citing the high cost of geothermal exploration as among the factors that have led to the slow development of geothermal as an electricity source in the country.

This is despite its stability as well as lower costs for consumers. After derisking the Menengai fields, GDC competitively selected three firms to set up power plants through a Public Private Partnership model.

GDC would earn from the sale of the steam to the firms that would, in turn, generate electricity and sell it to Kenya Power.

Despite being investor-ready since 2014, investments worth billions of shillings have been lying idle as the companies that were selected to build power plants and generate electricity from the system failed to access funds to build the power plants.

The companies were expected to build power plants with a combined generating capacity of 105 megawatts (MW) or 35MW each, which were expected to start operations by end of 2016.