Geothermal wells in Olkaria. The Geothermal Development Company (GDC) moved out of the red to post Sh1.6 billion net profit in the period to June 2015 after inking a deal to sell steam from its Olkaria wells to the government. FILE
US energy firm OrPower 4 has received an additional Sh3.89 billion loan for the completion of its 100 megawatt Olkaria III geothermal project in Naivasha, boosting the country’s quest for sufficient supply.
The amount forms the final draw from a Sh26.06 billion loan from the Overseas Private Investment Corporation (OPIC), an agency of the US government, through Ormat Technologies, Orpower 4’s parent company.
“This drawdown will be used to complete the final phase of construction at the Olkaria III complex in Naivasha, bringing the geothermal power plant capacity to over 100MW,” Ormat CEO Dita Bronicki said.
In May, Ormat began commercial operations of its Plant Two within the Olkaria III complex, increasing the company’s total generating capacity by 36 MW to 611 MW worldwide. Ormat also plans to add 16MW of generation by building a third plant, which it expects to complete in 2014.
Once Plant Three is complete total capacity at the Olkaria III complex will reach 100MW. The power is sold under a 20-year power purchase agreement (PPA) with Kenya Power.
Kenya has embarked on a wide range of renewable power generation projects in a bid to reduce dependence on unreliable rain-fed hydroelectric and thermal power.
The country’s peak electricity demand has risen to above 1,200MW, compared with 780MW in 2002, driven by economic growth.
KenGen produces 1,300MW while the rest is generated by independent power producers, which mostly rely on renewable energy such as wind power. Kenya is the first African country to drill geothermal power, tapping the vast steam energy in the Rift Valley region.
Estimates by the Energy ministry show that up to 7,000MW could be generated from geothermal sources.
The government is targeting to produce at least 5,000MW from steam by 2030. Although expensive to drill initially, geothermal is over time more reliable than both hydro and thermal power which are prone to vagaries of weather and high international fuel prices.
Kenya Electricity Generating Company (KenGen) in September 2012 invited bids for the development of geothermal power plants with a capacity of 560MW.
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