A rig at Menengai geothermal project. GDC has contracted Ormat to build a steam plant to power their rigs instead of diesel, a move cuts fuel cost by half.
The Geothermal Development Company (GDC) expects to save more than half of its fuel costs after it awarded Ormat Technologies a contract to build a 10 megawatt steam power plant.
The plant, to be commissioned later this year, will supply electricity to the GDC drilling rigs at the Menengai site in Nakuru, replacing the more expensive diesel generators.
“GDC will make a 55 per cent saving on fuel costs once geothermal power replaces diesel in our drilling operations in Menengai,” said the firm’s managing director Silas Simiyu.
It costs 9 US cents (Sh7.20) to produce one kilowatt of electricity from geothermal energy compared to 20 US cents (Sh17) using diesel.
The company said it currently spends an average Sh40 million on diesel to sink a single well at the project site.
GDC will sink 120 wells in the first of the three phases. Ormat will meet all the cost of design, procurement, fabrication and commissioning of the power plant, according to GDC.
Mr Simiyu said besides using geothermal for power generation, it will incorporate it into other businesses such as grain preservation.
“The GDC concept is to utilise the direct heat of geothermal fluids to operate grain driers, milk pasteurisers, processing of hides and skins and in greenhouse heating. GDC will also tap by-products like sulphur and carbon dioxide for industrial use,” Dr Simiyu said.
He said communities also stood to benefit from tourism enterprises designed around geothermal wells and hot springs such as hot pools and saunas.
GDC currently has two drilling rigs at the Menengai site and expects to install two more that are due to be shipped into the country by June.
Menengai has a geothermal potential of over 1,600MW and GDC plans to sink 120 wells in the first of the three phases in this field.
The company has already sunk five productive wells in Menengai and is currently drilling another two.
Energy from thermal sources is relatively cheaper than that from fossil sources, and available in huge portions in the natural reservoirs in the Rift Valley area where GDC is currently developing several wells. It targets to produce at least 5,000MW.
The cost of diesel has been rising steadily globally due to higher demand, pushing up prices.
Globally diesel prices have climbed faster than prices of lighter fuels such as petroleum in what is being mainly attributed to a new phenomenon dubbed “the diesel take-off”.
In Kenya diesel is the main fuel for machinery in the agricultural sector, which contributes almost a quarter of the Gross Domestic Product (GDP).
Diesel, which accounts for about 40 per cent of the fuel products sold in Kenya, is also key in public and cargo transport businesses.
The Organisation of the Petroleum Exporting Countries (Opec) says globally a bigger chunk of cars are now running on diesel as part of the big shift from petrol.
The organisation expects the increase in demand growth for middle distillate (diesel) to account for about 60 per cent of the forecast 20 million barrels per day (bpd) rise in global oil demand by 2030.
Meanwhile, GDC has said the feasibility study for the 400Mw Menengai Phase I is still under way and expects to conclude the exercise in the last quarter of this year.
“Expression of Interest (EOI) for the 400 MW has already been floated and 19 companies have been short listed. Request for proposals will be issued to the short-listed companies once the results of the study are known,” Dr Simiyu said.
The country is going big on geothermal to cut its energy costs. The country has potential to produce 7,000 MW and is targeting production of at least 5,000 MW of geothermal power by 2030.
Development of cheaper geothermal power means the country has to rely on less thermal power that is prone to the vagaries of high international prices, and rain-fed hydroelectric dams.
The Kenya Electricity Generating Company (KenGen) last week signed a final $140million contract with China’s Sinopec International Petroleum Company (SIPC) to install steam pipelines and control systems at its 280 MW Olkaria I and Olkaria IV geothermal plants which will inject a further 25 per cent of current capacity of power from steam sources when completed.
The piping system will cover a length of more than 40 kilometres and carry steam to Olkaria I’s unit 4&6 and Olkaria IV power plants, each with a capacity of 140 megawatts.
