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KenGen invites bids for geothermal plants

BUSINESS
By Reuters | Sep 28th 2012 | 2 min read
By Reuters | September 28th 2012
BUSINESS

Kenya’s main electricity producer, KenGen, has invited parties to submit bids for the development of 560 MW geothermal power plants, the company said.

The company said it planned to develop the power plants in phases of 140mw each at Olkaria within the east African nation’s Rift Valley under a joint venture arrangement in which successful bidders would build, and later transfer, the facilities back to the firm after 10 to 20 years. “The successful bidder or consortium would be the majority shareholder,” KenGen said in a call for the bids in the local dailies.

Kenya is the first African country to drill geothermal power, tapping vast reserves of steam energy in the country’s Rift Valley region, which remains geologically active.

The country has the potential to produce 7,000mwand is targeting production of at least 5,000mw of geothermal power by 2030.

Although expensive to drill initially, development of cheaper geothermal power means the country will come to rely less on thermal power, prone to the vagaries of high international prices, and rain-fed hydroelectric dams. The cost of energy is a key factor in the east African nation’s inflation levels.

Kenya’s peak electricity demand has risen to about 1,200mw, compared with 780mw in 2002, driven by economic growth. KenGen produces 1,141mw and the rest is generated by independent power producers, which mostly rely renewable energy such as wind power.

KenGen said in February it planned to raise $12 billion to build six geothermal power plants that should generate 585mw by 2016, as it pushes to diversify its power sources.        

Reuters

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