Kenya to save billions monthly as KenGen cuts reliance on hydro-power

Kenya stands to save about Sh2.2 billion monthly. This is as the country shifts the bulk of it's power generation towards renewable energy, cutting reliance on traditional hydroelectric power generation.

According to the State-owned generation firm, Kenya Electricity Generating Company Ltd (KenGen), the country has seen electricity generation from geothermal and wind sources increase three fold in the past one year. "In January this year, the total generation was 638gigawatt hours and out of that, geothermal power contributed 48 per cent of this generation with hydroelectric power contributing 43 per cent," explained KenGen Chief Executive Albert Mugo.

Power rationing

Power from wind has doubled over the last one year, with KenGen's wind farm at the Ngong Hills generating 4.8 gigawatt hours up from 2.3 gigawatt hours in a similar period last year.

The rise in geothermal energy has largely been attributed to the injection of the 280 megawatts (MW) at KenGen's Olkaria plant, which the power producer says has stemmed power rationing. "The generation of the 280MW has displaced thermal generation and we have seen a 65 per cent reduction in the fuel cost component reflected in our electricity bills since August last year," stated Mugo.

The Government is now inviting bids for consultancy for the Olkaria 5 project, which is expected to start by the end of this year. It will see another 140MW of geothermal energy added to the national grid.

In addition, drilling in Olkaria is ongoing and is expected to be completed over the next three years, bringing in an additional 400MW. "Our Ngong wind firm has been upgraded from the 5.1MW we had in 2009 and now, it is generating 25 MW," he said. "We completed the project in December last year and all the turbines are now working."

Kenya has for the last five years been working to tap into the estimated 10,000MW of geothermal power in the Rift Valley with a target of 5,000MW added to the national grid by 2017. President Uhuru Kenyatta will officially commission the second part of the 280MW Olkaria project on Thursday, accompanied by Rwanda President Paul Kagame.

The project cost is $1 billion (Sh91 billion), with the Government fully funding the $320 million (Sh29 billion) needed for drilling of the wells. "Our fundraising efforts are on track and we are still optimistic about our rights issue," explained Mr Mugo.

Generation capacity

"As the largest shareholder, we are waiting on the Government to communicate to us how they plan to go about it and the feeling is that in the next two weeks we shall have a way forward."

 KenGen is also looking to rehabilitate the 30 year old Olkaria 1. The first geothermal project is still functional but the plant and machinery will be upgraded increasing it's generating capacity from 44MW to 51MW.