GDC fails to supply power despite Sh52bn allocation

What you need to know:

The parastatal is mandated to explore and auction geothermal wells to private sector players and state-owned Kenya Electricity Generating Company.
But its wells are yet to contribute power to the national grid that is heavily reliant on weather-dependent hydropower as well as thermal generation, which is behind the current expensive electricity.

MPs have questioned the sinking of Sh51.8 billion in the past five years into the Geothermal Development Corporation (GDC) without the agency helping inject power into the national grid.

The parliamentary Committee on Energy was told the Treasury has allocated GDC Sh28.6 billion while the government has secured Sh23.2 billion in loans and grants from donors for the State-run agency that was formed to accelerate geothermal power generation.

The parastatal is mandated to explore and auction geothermal wells to private sector players and state-owned Kenya Electricity Generating Company.

But its wells are yet to contribute power to the national grid that is heavily reliant on weather-dependent hydropower as well as thermal generation, which is behind the current expensive electricity.

“So far, they are not generating any power for connection to the national grid,” Energy PS Joseph Njoroge told members of the Energy Committee.

He added that the GDC has 59 wells in Olkaria with the potential to generate an estimated 409 megawatts.

MPs were critical of GDC, which recently invited bids for the construction of two electricity generation plants from underground gas for a combined 60 megawatts from geothermal power.

“The main concern is that GDC has spent 28.6 billion of taxpayer’s money and has not lit a single bulb in the country,” said Molo MP Jacob Macharia.

But the Ministry of Energy noted that GDC budget was not restricted to drilling wells, with a significant amount used in buying machinery, assets and infrastructure.

The government estimates Kenya has the potential to produce 7,000 megawatts of electricity from geothermal energy up from the current 200 megawatts from the source.

The country plans to add 5,000 megawatts by 2017 to the current capacity of 1,664 megawatts, driven by a growing economy that is expected to raise demand for power to 15,000 megawatts by 2030.

By the end of this year, KenGen is expected to add a total of 327 megawatts from geothermal and wind power that will help lower tariffs and cut costs of doing business.

Developing geothermal power plants usually requires high upfront costs, due to the expensive drilling of wells to tap the gas.

But the energy source is usually cheaper and more reliable in the long run than thermal power or hydro generation.