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KenGen, GDC in plans to venture outside Olkaria and Menengai in developing geothermal power

By Macharia Kamau | July 7th 2017

Kenya is looking to expand the area under geothermal exploration and development as it seeks to increase the amount of electricity produced using the renewable energy.

The two major players in the geothermal energy subsector said they are evaluating the possibilities of going outside the fields of Olkaria and Menengai in a bid to increase energy produced from geothermal. This is expected to further reduce Kenya’s dependence on hydroelectricity that is prone to dry weather as well as eventually retire the costly diesel fired thermal power plants, which though being phased out they are used in instances of low water levels as has been the case this year.

The Kenya Electricity Generation Company (KenGen) and the Geothermal Development Company (GDC) said plans are at advanced stages to start geothermal exploration and development outside the two traditional areas.

KenGen, majority owned by the Government, has largely restricted its geothermal development works in Olkaria where it has built four power plants generating a combined 533 megawatts and is in plans to put up another four plants. It is however looking outside the area and said it has applied for a licence to explore and develop geothermal power in Eburru, also in Naivasha, as well as in Lake Magadi.

“We have made an application to the Ministry of Energy to start exploration and development of more geothermal fields in the Rift Valley. At the moment we want to move to Eburru and have made an application for Lake Magadi,” said Peketsa Mangi resource development manager at KenGen’s Olkaria project.

“There are 20 geothermal prospects in Kenya with a capacity to produce over 10 000MW and we are trying to identify where we can prospect for next and make an application to the Ministry of Energy.”

The state owned GDC said among the areas that it is eyeing include Suswa, away from its flagship fields of Menengai. The firm on Friday also broke ground for Baringo-Silali where it has been making preparations to start developing the fields. Paul Ngugi GDC regional manager Central Rift said drilling in the area will start in early 2018, with the wells drilled in the first phase expected to produce 200MW.

“There are various that GDC is interested in including Suswa which is still in its early stages,” said Ngugi.

“We are launching the project in Baringo Silali block, which we estimate has a potential of 3 000 megawatts. We will initially drill in three hot points and the first phase will produce about 200MW. So far, we have put in place infrastructure such as roads and are in the process of putting in place water supply systems and by early next year, we will start drilling.”

GDC has been drilling in Menengai where three Independent Power Producers (IPPs) are expected to build power plants and use the steam to generate a combined 105MW. Quantam Power East Africa, Orpower Twenty Two and Sosian Energy will each develop a geothermal plant with a capacity of 35MW.  It has also drilled in Olkaria, where it supplies steam from its well to KenGen, which use it to generate electricity at its Olkaria IV power plant. The sale of steam is the critical revenue stream for GDC, earning it Sh3 billion per year.

The entity is trying to wean itself from Government funding. Other than the partnerships for the generation of power where IPPs will pay for the steam supplied, the firm is also looking at putting up industrial parks within it project areas. The parks are expected to help absorb excess capacity that will be produced with more plants coming online. Currently the country has capacity to generate 2 300MW from the different source but demand stands at around 1 700MW.

“One of the areas that we are looking at is the establishment of industrial parks. While we are currently meeting demand, we can use the excess power through establishment of industries around the geothermal projects and that will absorb the power and also drive the economy. Geothermal is the cheapest power, reliable and you can be able to project its price over its lifetime. It is also not affected by weather or factors such as international price of oil,” said Ngugi.


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