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New geothermal wells set to produce 61MW

BUSINESS
By Peter Kiragu | September 27th 2015

Jubilee government’s target of 700 megawatts of geothermal power will have an additional 61MW by end of next year.

A lease project of several geothermal wells in Ol Karia will add 50 MW to the power grid, in a new deal expected to kick off any time from now.

KenGen has contracted three local and international companies to do the job at an estimated cost of Sh21 billion and is expected to be complete by November next year. Toshiba Corporation of Japan, Rentco East Africa Ltd and Lantech Africa, were contracted to lease, operate and maintain the wellheads at the Olkaria Geothermal field for 15 years.

The tender win by the three companies had been contested by other bidders but the Public Procurement Oversight Authority (PPOA) gave the lease plans a clean bill of health on August 21, 2015.

“This will be a big boost to the 430 MW of Geothermal power we already produce at Ol Karia. We expect work to begin fourteen months after signing the lease,” said KenGen Managing Director, Mr Albert Mugo.

Already, 10 steam turbine generators are operational in the Ol Karia fields. KenGen has 248 geothermal wells so far and more wells will be rehabilitated in the next three years when the company will have achieved its 700 MW target.

14 prospective sites

Mr Mugo said the parastatal will earn its money from the difference in the cost of leasing and the revenue from the electricity generated from the leased wells which will be sold to Kenya Power.

The project’s tender documents show the three companies had convinced the parastatal that the revenues from the deal will be at least Sh850 million every year.

KenGen is further undertaking an installation of 75 MW of Geothermal Wellhead generators with most of the units located within the Ol karia domes.

The ministry of Energy is keen on the project because it is one of Jubilee Government’s effort to produce 5,000 MW of power.

Rentco East Africa’s CEO Robert Nyasimi said the project could further reduce the cost of power to ordinary Kenyans. “We will avail more power to the grid. We are preparing the ground to start the work,” said Mr Nyasimi.

In April, Mr Mugo told global energy drivers at the World Geothermal that Kenya is yet to fully exploit geothermal power in the country. The country has a potential of over 10,000 MW spread over 14 prospective sites, yet, only 565 MW is utilised from the Olkaria field.

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