Giston Energy gets nod to set up wind farm in northern Kenya

A new company has received government approval to set up a wind farm, a project seen as a major boost to Kenya’s search for less costly and renewable energy to meet the growing demand of electricity from domestic and industrial use.

Giston Energy is already testing the strength of wind around the area it plans to set up the farm.

Lake Turkana Wind Power Ltd is the other company planning a 300 megawatts (MW) generation by end of 2012.

“We have successfully obtained a formal approval to develop 300MW wind farm from Government of Kenya through Ministry of Energy,” said Cyrus Thairu, Giston Energy’s communications director.

Giston Energy is owned by a group of local and mostly United States-based Kenyans.

It plans to invest in wind and solar power in Northern Kenya. It solar output will be 50MW.

The company officials said they will now start negotiations with Kenya Power and Lighting (KPLC) on Power Purchase Agreement (PPA) that will set the price at which it will sell electricity to the power distributor.

“We have submitted our PPA proposal to KPLC leadership and we’re waiting for their response.”

The company said it has also secured a commitment for transmission funding up to $200 million, but did not mention the source of that funding.

Lack of transmission lines in areas targeted by solar and wind electricity investors has been a major cost concern.

Last month, Lake Turkana Wind Power secured a Sh11.4 billion funding from Spanish government to finance construction of the transmission line.

Lake Turkana Wind Power has also received undisclosed amount of carbon emission reduction funding from African Carbon Asset Development facility that has been set up as collaboration between Unep, Standard Bank and the German government’s International Climate Initiative.

The company envisages constructing a wind farm consisting of 353 wind turbines, each with a capacity of 850 kilowatts (kw).

The total power generated in the initial phase of the project expected to reach 300Mw by July 2012.

Lake Turkana Wind Power already has an agreement with Danish firm—Vestas Wind to supply 360 wind turbines for use in the project estimated at about Sh55 billion.

Giston Energy on the other hand said its wind turbine supplier – whom it did not name—has confirmed the willingness to start shipping the turbines in early 2011.“Our wind turbine supplier will construct the wind park on turn-key.

This will eliminate delays and enhance quality since these teams have a proven track record,” said Mr Thairu.

A turn-key or a turn-key project is a type of project that is constructed by a developer and sold or turned over to a buyer in a ready-to-use condition.

The company said it expects to sign a carbon credits financing deal with a major international bank soon.

Funding for the wind farm is planned to come from export credit agencies.

The growing interest of investments in renewable energy is attributed to the introduction of an electricity feed-in tariff policy in Kenya, according to Unep executive director Achim Steiner.

Unep said the policy encourages use of geothermal, wind and biomass as renewable power generation sources.

The electricity is later sold to form part of the national grid.

Under the initiative, power generators from mini-hydro projects receive up to 12 US cents per kilowatt hour produced, nine US cents for biomass and nine US cents for wind power.

“Policy mechanisms designed to encourage adoption of renewable energy sources triggered interest in establishing Africa’s largest wind farm in Turkana.”