advertisement
Economy

Geothermal overtakes hydro power for first time

A geothermal well at the Menengai Crater. KenGen wants to team up with private investors to build geothermal power plants that would come on stream by 2016. PHOTO | FILE
A geothermal well at the Menengai Crater. KenGen wants to team up with private investors to build geothermal power plants that would come on stream by 2016. PHOTO | FILE 

The share of electricity generated from geothermal sources has for the first time surpassed that of hydro power, pointing to lower electricity bills from reduced reliance on costly thermal power.

Data from the Energy Regulatory Commission (ERC) indicates that geothermal power accounted for 38.85 per cent of the 754.8 million units of electricity bought by homes and businesses in September while hydro power accounted for 36.7 per cent. Thermal power accounted for 22.2 per cent.

In August, the share of geothermal power stood at 31.66 per cent while hydro electricity was at 37.7 per cent. Thermal power was at 28.8 per cent.

The decline follows the injection of 210 megawatts of geothermal power into the national grid, with 140 megawatts having been added in late July and 70 megawatts on September 16.

This has seen power bills for consumers using less than 50 kilowatt hour (kWh) drop by about 19 per cent since July and about 12 per cent for middle class households that consume 200 units of electricity monthly.

“September marks the first time we have seen geothermal power come top in Kenya’s electricity generation mix,” said a source at the ERC.

By the end of this year, KenGen will have added 280 MW in geothermal capacity, helping cut power bills that businesses say make Kenyan industries uncompetitive.

In Kenya, an extra fuel charge is added to normal power rates depending on the amount of diesel generation used and global fuel costs.

The share of thermal power had remained above 45 per cent for the better part of this year due to low water levels in the hydro-electric dams, which resulted in the rise in the fuel surcharge and forex adjustment costs on power bills.

This month, the fuel surcharge stood at Sh4.79 per kWh for bills to be settled at the end of the month from Sh5.71 per kWh the previous month and Sh7.22 per kWh in August.

“The next billing will be done at anything between Sh3.5 andSh3.75 per kWh on fuel,” said Davis Chirchir, the Energy and Petroleum minister.

“As we go to December, we will charge our target of Sh1.78. With more geothermal power, we want to completely remove the fuel charge cost from our bills.”

The falling electricity prices will ease pressure on inflation, which stood at 6.6 per cent last month, down from a 27-month high of 8.36 per cent in August.

Kenya has a target to halve electricity bills next year from present levels of between Sh15-Sh16 per KWh. Diesel generation costs about Sh30 per kWh while the cost of geothermal power ranges between Sh7.12 and Sh8.01 per KWh, the government says.

Kenya is ranked eighth in world among the top geothermal producers behind the US, Philippines and Indonesia. KenGen wants to team up with private investors to build geothermal power plants that would come on stream by 2016.

advertisement