The proposed Olkaria VII Geothermal Power Plant, which KenGen is planning to build at the Olkaria geothermal field in Naivasha, will cost an estimated Sh32 billion ($247,511,000), a regulatory filing shows.
An Environmental and Social Impact Assessment (ESIA) report filed with the National Environmental Management Authority (Nema) by KenGen said the 80.3 megawatts (MW) project would help stabilise the electricity supply on the national grid.
“This will be a relatively cheap power source since geothermal power is the least cost source of baseload energy for the Kenyan power system,” the State-owned power firm said.
The firm had explored seven potential spots within Olkaria to host the plant but settled on a spot within 220 meters of the southern boundary of the Hell’s Gate National Park.
The other geothermal plants that KenGen owns include Olkaria I, Olkaria I AU, Olkaria II, Olkaria IV, and Olkaria V major power plants and Wellhead units.
On the other hand, the Olkaria III power plant, which has a capacity of 150MW, is wholly owned and operated by OrPower 4 Inc., a wholly-owned subsidiary of American firm Ormat Technologies.
According to the ESIA study done by West Japan Engineering Consultants Inc (West JEC), KenGen also stands to earn up to $29,250,000 (Sh3.77 billion) in carbon credits from the project each year.
“The proposed project will achieve CO2 emission reduction by replacing electricity generated by fossil fuel-fired power plants connected to the national grid,” said the firm.
The power generator currently earns carbon credits from six power generation projects.
These are Olkaria II, Tana, Kiambere, Olkaria IV, Olkaria IAU, and Ngong power projects.
Olkaria VII is one of four geothermal projects that KenGen is developing with a total capacity of 326MW.
It includes the Olkaria I Rehabilitation (6MW), Olkaria IV and IAU Uprating (40MW), and Olkaria Public-Private Partnership project (140MW).
When completed, these power plants will raise the total installed geothermal capacity in the greater Olkaria zone close to 1,000MW.
KenGen, whose revenue rose 14 percent to hit Sh53.964 billion in the year to June 2023, has been betting on increasing its generation capacity both by building new plants as well as upgrading existing ones to grow its earnings.
