Power producer Kengen to invest US$2b in new geothermal power plants in Kenya

KENYA – Electricity producer Kenya Electricity Generating Company (Kengen), has disclosed plans to invest as much as KSh216 billion (US$2 billion) in four new power plants in Kenya over the next five years, Bloomberg reports.

The leading power generator is shifting focus from sources like hydroelectric power and thermal power to geothermal power.

Kengen is the largest energy generating company in East Africa and has also drilled over 310 geothermal wells since its establishment and supplied 1,818 Megawatts to the national grid.

Geothermal energy is becoming a major source of revenue for Kengen, through drilling projects in Kenya and neighboring countries like Ethiopia and Rwanda.

In February 2021, the firm secured a US$6.6 million (KSh714 million) drilling contract in Djibouti as per the Bloomberg article.

According to Geothermal Development Corporation director Abel Rotich, preparations for the drilling works were 80 percent complete.

In a statement published in the company’s weekly review report, Rotich said projects involved the drilling of two geothermal wells at the Galla-Le-Koma geothermal field in the Lake Assal region.

Kengen said it is in talks with Rwandan and DRC officials concerning geothermal projects in the countries.

The energy company also plans to increase electricity supply from geothermal plants to nearly 60% of the electricity used in Kenya from the current 50%, by 2030.

One of the biggest hurdles the company faces is the high cost of drilling wells which can rise to US$6 million for a single well and in addressing this challenge, Kenya established the Geothermal Development Company to take the risks associated with geothermal projects.

Kengen also faces stiff competition from alternative energy sources like solar and wind power which require less capital investment compared to geothermal power.

Kenya government announced plan to phase out thermal power is in high gear as KenGen seeks to pump in an additional 83MW to the national grid by the end of the year.

According to the power producer, the electricity will be generated from Olkaria’s additional Unit 6 in Naivasha which is nearing completion.

This comes barely a week after KenGen announced that electricity demand had shot up from 1,661MW at the height of Covid-19 to 1,994MW as more industries resumed operations.

According to a press release, the Unit 6 geothermal project has a capacity of generating 83.3MW once complete.

The company noted that Olkaria VI will add another 140MW to the national grid.

“The Public-Private Partnership project is in procurement stage and we target to complete construction of the power plant by 2024,” read the statement.

As a statement, the company said the re-development of Olkaria I geothermal plant would see its installed capacity rise from the current 45MW to 50MW.

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