Orpower 4 inc, a subsidiary of Ormat Technology has now commissioned its Plant 3 achieving a total installed capacity of 110MW at Olkaria III site in Kenya. Plant 1 is 48MW and Plant 2 and 3 are each 36MW. This is a major achievement for Ormat who did not believe they could obtain this capacity when they were issued with the licence in mid 90s. With this success, Ormat is thinking of expanding its operations within Kenya and in the region.
Geothermal Development Company (GDC) plans to accelerate the development of geothermal energy in Kenya by undertaking geothermal development at Suswa Prospect. Detailed surface studies comprising of geology, geophysics, surface heat measurement, baseline environmental and social economic assessment of the prospect has been done the field potential is estimated at about 750 MW.
The current project aims to realize about 300 MW between year 2016 and 2018.
GDC has called for EOI with the intention of engaging investors/partners who will get the opportunity to jointly together with GDC develop the steam field. Thereafter the investor will install the first 100MW at the site with others to follow thereafter.
Under this project, GDC will obtain all land rights, permits and undertake construction of the road network, drilling water reticulation system, drilling of exploration and appraisal wells to confirm presence of the resource. In addition, jointly with the selected partners, GDC will undertake all the remaining drilling works (production and re-injection), feasibility study(s) and construction of the necessary steam gathering and reinjection network. GDC’s investment will comprise a total of 20% to 40% of the required capital for this development phase or as may be agreed between the parties.
After power plants commissioning by the development partners, GDC will be responsible for reservoir management and the brine reinjection system.
The Investors, under a joint steam development contract, will finance between 60% and 80% of the require capital for the steam development. The investors will recoup their investments through regular payments made from revenue generated through steam sales in a manner to be negotiated and agreed over a period of 20 years or any other agreed period.
Further, the Investors will finance, design, construct, operate and maintain the power plants. While steam field is under development, the investor will have the opportunity to install wellhead generation units for early power generation.
This EOI closes on February 20, 2014.
Kenya is in the middle of a vast geothermal resource found in the East African rift system covering Djibouti, Eritrea, Ethiopia, Tanzania, Uganda, Rwanda, DRC and Zambia. Kenya has since 1981 been successfully exploiting its geothermal resources and has developed a legal framework that allows both public and private geothermal development. The country has moved a notch higher in this regard by establishing a company (GDC) to be dedicated to steam development for sale to IPPs. Currently there are eight (9) rigs drilling for steam in the country four of which are hired. The country targets to install 5,000MW of geothermal by 2030. It is anticipated that once GDC drills for steam, IPPs will be given concessions to build power plants and enter into PPAs with the Kenyan offtaker (Kenya Power and Lighting Company). There is also a strategy for utilizing steam as soon as it is drilled by installing mobile wellhead generators.
Given this ambitious plan, very many wells will be drilled and tested which will require substantial drilling materials and related services. More rigs will be procured and or hired. The reason for this is that the Kenya government has made geothermal its primary source of power.
There is therefore a huge opportunity for companies in the geothermal industry to do business in Kenya. In this regard, GeoSteam Services Ltd located in Kenya is very keen to assist US companies interested in doing business of goods and services in Kenya. GeoSteam is also in a position to assist companies interested in obtaining concessions or investing in geothermal power plants as IPPs in negotiating for PPAs and Steam Supplies Agreements (SSA) in Kenya. Interested companies are requested to contact with a brief company profile and the goods and services for which that can be supplied, and information for a contact person.