The Kenya Electricity Generating Company has signed up a consultant to guide what is billed to become the biggest geothermal power project in Kenya.
Sinclair Knight Merz of New Zealand is now expected to come up with the technical design, prepare tender documents and pre-qualify potential bidders for a 280 megawatts geothermal power project in Olkaria.
The consultant is also tasked with tender evaluation, contract negotiation, supervision of construction contracts and general support during the warranty period of the project.
According to work schedule, the Sh100 billion project is expected to be completed mid 2013, and will effectively see Kenya’s green energy contribute about 30 per cent of the country’s electricity consumption estimated to reach 1,500 megawatts at the close of 2012.
The project will be funded partly by the government and by international lenders among them Japan International Co-operation Agency JICA, French Development Agency, European Investment Bank (EIB), German Development Bank (KfW), World Bank and KenGen.
This comes hot on heels of another major renewable energy signing, between power distributor Kenya Power and Lighting Company (KPLC) and the Lake Turkana Wind Company that will see the latter pump in 300 megawatts of wind power to the national grid in the next two years.
The geothermal project will involve installation of four 70MW power generating machines, steam gathering systems, construction of substations, transmissions lines and other necessary infrastructure.
Whereas geothermal power requires heavy investments, in the long run it is cheaper than oil generation that the country resorts to avert crisis.
Average bulk purchase prices by KPLC suggest geothermal power at Sh6 per kilowatt hour is the second cheapest mode of generation after wind (Sh7.50).
Thermal power costs the distributor Sh14 per kilowatt hour.
Information given to investors during the Kengen Public Infrastructure bond put production cost for a Kilowatt hour from geothermal at Sh4.30 against thermal’s Sh5.20.
For geothermal, the bulk of the cost lies in initial investment at Sh3.60 per kilowatt hour against thermal’s Sh1.90.
It, however, costs Sh0.70 to maintain a geothermal unit against Sh3.30 needed to maintain a kilowatt hour of a thermal plant.
KenGen managing director Eddy Njoroge said the power utility had finished drilling wells for the geothermal project, meaning the successful bidder will just wire turbines and start generating.
The government has been forced to drill steam wells in a bid to attract investors who are put off by the high costs and risks of striking a dry well associated with drilling.
Geothermal is set to become the country’s main source of electricity largely due to the country’s massive potential estimated at 7,000MW of power, which is five times the current national electricity consumption.
According to the power generator’s projections, the total output from geothermal is pegged at 675 Megawatts of power by 2015.
KenGen is generating 115 megawatts from Geothermal at the Olkaria plant in Naivasha.