The ground breaking ceremony for Olkaria V geothermal power station was officiated today on 28th April 2017 by President Uhuru Kenyatta. The president thanked all the financiers of the project particularly JICA for the power plant which will produce about 158 (2×79) MW of geothermal power. JICA had invested about KES 40 billion in the project. He also thanked China Exim Bank that provided funds for the drilling of the wells that will be connected to supply steam to the power plant.
The president also commissioned 75 MW of wellhead units which have been constructed by KenGen over several years. The Cabinet Secretary of Energy and Petroleum noted that hydro power in the country was performing poorly as a result of prolonged dry weather noting that most of the major dams had very low water levels.
The president requested the Ministry of Energy and Petroleum to look into opening the geothermal sector to private developers both local and foreign so that geothermal development can be accelerated. He also requested KenGen to look into ways of training the local community so that they can be active participants of the resource from their area and therefore take care of it instead of being on-lookers.
Mitshubishi Hitachi Power Systems Ltd (MHPS) in conjunction with Mitshubishi Corporation and H-Young and Company Ltd have been awarded the EPC contract for Olkaria V (70MW ) geothermal power plant in Kenya.The project is owned by KenGen and fiananced by JICA and is planned to be commissioned in 2019.
The 6th African Rift Geothermal Conference (ARGeo C6) will take place this year in Addis Ababa, Ethiopia. The actual conference will be held November 1-3, 2016 with field trips before and after the conference. Geothermal Pre-Conference Short Courses will also be held on 31 October to 1 November 2016.
Initially, the conference was to be held in Eritrea but later Eritrea changed its mind on the matter. Later the Government of Ethiopia decided to host and organize the conference this being its second time to do so. The Sixth African Rift Geothermal Conference (ARGeo-C6) will be held in collaboration with United Nations Environment Programme (UNEP) and other support partners such as the African Union Commission (AUC) and Icelandic International Development Agency (ICEIDA). This Conference is being organized under the auspices of the UNEP-ARGeo Programme as one of its biennial geothermal conferences.
The other five previous conferences which are held every two years were held in Ethiopia (2006), Uganda (2008), Djibouti (2010), Kenya (2012) and Tanzania (2014).
The theme of ARGeo-C6 is “Geothermal: Solution to Africa Energy needs”. The main objective of this conference is to promote regional cooperation, create an information exchange platform on exploration, development, investment and utilization of the geothermal resources ion the region and elsewhere in the world. This international conference will bring together policy makers, technical experts as well as developers and financiers of international and regional delegates. The conference will look at the following areas:
- mitigate the risks associated with resource exploration,
- attract private developers to fast track geothermal development,
- reduce lead times in developing geothermal projects,
- to leverage investment to stimulate the growth of industry, and
- to effectively develop, construct, and operate successful geothermal power plants.
The Conference will also provide exhibition areas to showcase their products, equipment and services. It will also provide excellent opportunities for networking with world reknown persons and institutions in the geothermal sector worldwide.
The geothermal development Forum was held in Nairobi on 23rd and 25th May during which 215 participants attended and 50 presentations of various experiences in geothermal development in Kenya and elsewhere were made. The Forum was hosted by the Ministry of Energy and Petroleum assisted by the World Bank. The participants consisted of various stakeholders from both public and private developers, donors and local and international experts and government officials interested in the sector. The Forum was informed that there is a huge interest from the private sector to obtain greenfield licences in order to conduct their own exploration with the intention of proceeding to exploitation stage. This was contrary to a survey recently completed which indicated that many developers would prefer coming in when the initial exploration risk had been taken by the government.
Kenya has a huge potential of geothermal resources in excess of 10,000 MW. Initially the government followed a development strategy where it undertook to carry out exploration drilling and before releasing the projects to KenGen, a public generating company or to IPP ( for example OrPower 4) for further drilling and power station construction and operation. Later, the government issued three greenfield licenses which have taken a long time to develop as the investors find it difficult to raise exploration drilling funds. This slow progress made the government to create GDC with the responsibility of drilling for steam and sell the steam to IPPs when all the resource risk had been taken care of. This process is also taking too long presumably because GDC has to recruit young staff who would require a lot of training. Even though GDC has already entered into contracts with three IPPs to develop 105MW in their first field in Menengai, the financier are finding this arrangement risky and need government to guarantee the steam supply from GDC over the life to the contract. This requirement has created substantial delays in the construction of the power stations.
In moving forward, the Forum provided useful suggestions which will be used to formulate a new Geothermal Development Strategy which will address the preferred model(s), tariffs, land issues and other infrastructure concerns in order to be ready before the end of the year. It was emphasized that the communities are very important stakeholders to these indigenous resources and should equitably benefit from these indigenous resources while being environmentally protected.
The Government of Kenya (GoK) recognizes that geothermal energy has potential to reduce overall cost of power generation in the country as a base load, cheaper, indigenous and secure fuel compared to expensive imported petroleum fuels.
At present geothermal power constitutes approximately 30% of Kenya’s electrical power mix, but 50% of the energy generated.
In order to lower the overall cost of electricity, Kenya needs to develop more geothermal power from its huge potential estimated to be more than 10,000 MW.
Through the concerted efforts of KenGen, GDC, private sector developers, Development partners and the GoK, Kenya has made significant strides in the development of geothermal energy. However, challenges still exist in developing these resources. There is room for geothermal investments by more private sector developers currently and into the near future.
The Ministry of Energy and Petroleum with the assistance from the World Bank is currently planning to hold an international geothermal investors conference for two days on 23rd and 24th May 2016 in Nairobi.
The key objective of the conference will be to showcase the achievements so far made, market available potential for geothermal investments and give opportunity to stakeholders to engage, critique the Kenya’s current policy, legal, regulatory institutional and other supportive frameworks and come up with the best ways to enable exploration and development of geothermal resources in the country going forward.
The Ministry of Energy and Petroleum is also currently developing a strategy for fast tracking geothermal exploration and development in Kenya. The investors’ conference will therefore contribute towards the geothermal strategy process.