Markets & Finance

Danish firm says 365 Turkana turbines order largest in its history

mugo

Lake Turkana Wind Power Plant Project chairman Mugo Kibati (right) and former chairman Carlo van Wageningen during the signing in Nairobi of legal agreements on the power generation project. PHOTO | FILE

Lake Turkana Wind Power (LTWP) project has ordered 365 turbines from Danish firm Vestas, which the Copenhagen firm said was the largest single-project contract in its history.

The 69-year-old Vestas said the contract for equipment to generate 310 megawatts (MW) comes with a 15-year service contract.

The Danish firm which controls top global share of turbines market at 13 per cent did not disclose the cost of the contract, citing company policy.

Upon completion expected to be by June 2017, the 310 MW output will also make Lake Turkana Wind Power the largest wind plant in Africa and reduce electricity bills for consumers.

“We are very pleased to continue this great journey with Vestas as we progress toward our aim of reducing Kenya’s need for hydro and expensive fossil fuel-based power generation. We want to ensure that Kenya has access to low and consistent power prices, and with the Lake Turkana Wind Power Project, we can do that,” said LTWP chairman Mugo Kibati.

Vesta added that annual savings due to reduced fuel imports will be as much as €150 million (Sh17 billion) a year.

The wind project was commissioned in March 2014 and is estimated to cost Sh70 billion. It is financed through a mix of debt and equity.

The project is being carried out by a consortium that includes KP&P BV Africa, Aldwych International Limited, Vestas, Norfund, Finnfund and the Danish Investment Fund for Developing Countries.

Vestas said the project would strengthen its foothold in the region.

“Eastern and southern Africa are key markets for Vestas, and the Lake Turkana project will establish Kenya among the continent’s wind energy leaders,” said the firm’s president for central Europe Christoph Vogel.

READ: Kibati picked chair of Turkana wind energy firm

Listed companies TransCentury and KenGen as well as US Kipeto Power and General Electric are some of the firms investing in wind farms as part of their renewable energy projects.

Kinangop Wind Park which is being constructed by Aeolus Kenya, will add 60.8MW to the national grid.

KenGen’s also plans to put up a 100MW farm in Meru where private firm Bluesea is planning to add 40MW.

TransCentury is developing a 50MW wind firm in Limuru, Kiambu County in a consortium with other investors while KenGen has a 25MW plant in Ngong Hills, Kajiado County.

TransCentury chief executive Gachao Kiuna said the main difference between wind and thermal is that the renewable energy is cheaper and cleaner but the drawback is that a good return depends on where the wind farm is located.

“If the wind farm is too far away from the grid and load centre then it requires investment in the grid to be able to inject power without de-stabilising the grid. This can be expensive and adds to project costs and can reduce returns,” Dr Gachao told the Business Daily

He said the Limuru plant has the advantage of being close to Nairobi which reduces the investment needed for grid stability.

LTWP is expected to be transported via Ketraco line over a long distance. Kipeto wind farm will generate 100MW and sits close to a Ketraco power way connecting Tanzania and Kenya.

Wind and geothermal power is the preferred energy source being developed by firms to meet the government’s target of 5,000MW in the next three years.