The injection of additional 280 megawatts produced in Olkaria to the national grid in December has lifted Kenya’s global ranking as the eighth largest producer of geothermal energy, a new study shows.
Kenya’s installed steam power capacity now stands at 579MW, ahead of giant economies such as Japan, Russia, China and Germany – according to a study presented to the World Bank by state-owned KenGen.
The US remains the world’s top geothermal producer with an installed capacity of 3,389 MW – nearly six times Kenya’s output – followed by Philippines (1,894MW), Indonesia (1,333MW), Mexico (980MW) and Italy is fifth with 901MW of steam power. New Zealand is graded sixth with 895MW ahead of Iceland (664MW).
Rwandan president Paul Kagame and his host Uhuru Kenyatta on Thursday switched on the second phase of the Olkaria project, offering households and manufacturers hope for cheaper electricity as steam displaces costly thermal power.
“Kenya has immense geothermal production potential,” said Albert Mugo, KenGen managing director.
“Geothermal power has contributed to lowering the cost of doing business by displacing thermal power and adds to Kenya’s green energy initiatives,” Mr Mugo said.
The Olkaria geothermal power has pushed down fuel cost charge in electricity bills to an all-time low of Sh2.51 per kWh in February from a high of Sh7.22 per unit in August last year.
Kenya has the potential to produce about 10,000 megawatts of geothermal power from the Rift Valley basin, studies by the Ministry of Energy show.
KenGen’s Sh118.7 billion ($1.3 billion) Olkaria project is billed Africa’s largest steam development, consisting of four power plants each generating 70MW.
In comparison, Japan has 537MW of geothermal, Russia (97MW), China (27MW), France (15MW) while Germany has 13MW.
Geothermal now accounts for 29 per cent of Kenya’s energy mix, up from the previous 13 per cent four years ago.
President Uhuru Kenyatta has lined up multiple geothermal projects and is banking on steam power to halve the cost of electricity to Sh9.54 (¢10.45) per kilowatt hour from the current average of Sh18.07 (¢19.78) per unit for domestic households.
State-funded Geothermal Development Company (GDC) has signed a deal with three independent power producers (IPPs) - Ormat Technologies, Quantum Power and Sosian Energy – who will each build a 35MW steam power plant under a build–own–operate (BOO) model.
OrPower 4, Kenya’s sole IPP generating geothermal energy, is currently increasing its output by 24MW, which will bring its total capacity to 134MW.
The shift to geothermal will help cut over-reliance on hydropower which is susceptible to the vagaries of weather.
Kenya Power purchases the 280MW steam power at Sh6.39 per kWh (¢7) which is cheaper than the Sh17.35 per unit (¢19) paid to thermal generators.
Electricity from the GDC project will also be sold at Sh6.39 per kWh (¢7) while steam power from OrPower 4 costs Sh7.81 (¢8.55 per unit).
The tariff for KenGen’s hydroelectricity is Sh2.74 per kWh (¢3) while that for Mumias bagasse is Sh3.65 per unit (¢4).