- Title: KENYA: Kenya's Kengen to raise $12 billion for new plants.
- Date: 23rd February 2012
- Summary: OL KARIA, KENYA (FEBRUARY 20, 2012) (REUTERS) VARIOUS FROM OLKARIA GEOTHERMAL SITE WITH STEAMING VENTS KENGEN AND KENYAN FLAGS ON THE MAST PAN LEFT OF OLKARIA POWER PLANT SIGN READING 'SILENCE MEETING IN PROGRESS' VARIOUS OF KENGEN'S MANAGING DIRECTOR EDDY NJOROGE TALKING TO JOURNALIST (SOUNDBITE) (English) KENGEN'S MANAGING DIRECTOR EDDY NJOROGE, SAYING: "Right now
- Embargoed: 9th March 2012 12:00
- Keywords:
- Location: Kenya, Kenya
- Country: Kenya
- Topics: Science,Energy
- Reuters ID: LVA67ML8NUY2OVXLR6FR1FWQUAAU
- Story Text: Kenya's largest power producing company, KenGen, reveals its plans to expand operations through the installation of mobile wellheads and the construction of six power plants, to further increase its energy production by 585MW by 2016.
Within Hell's Gate National Park, 50 miles north of Nairobi, Kenya, white fumes billow from the scorched earth revealing vast amounts of high-pressure steam trapped underground.
Kenya is the first African country to tap this vast steam energy by drilling and building geothermal plants.
Development of cheaper geothermal power means the country has to rely less on thermal power, prone to the vagaries of high international prices, and rain-fed hydroelectric dams.
Out of the 1,200 megawatts (MW) of Kenya's peak demand for electricity, geothermal energy covers approximately 200MW.
But there is a potential for much greater supply and Kenya Electricity Generating Company (KenGen) is keen to utilise the available energy before its new flagship project, Ol Karia IV -- with a capacity of 280MW, becomes operational within the next 2 years.
KenGen Managing Director, Eddy Njoroge said on Monday (February 20), "Right now we have about 306 MW of energy ready but we are waiting to do the interconnection, to build the 280MW (plant). So the question is why can't we be utilising that steam in the meantime, while we are waiting to do the interconnection."
In order to do that, KenGen has commissioned the purchase and installation of 15 wellheads -- small and mobile power plants which can be temporarily installed on the drilling sites to produce power until the site can be connected to the main power plant.
With the feasibility studies completed KenGen is even looking to raise money for a fourth site -- Ol Karia V.
"Assuming it's 520MW and assuming that we are very efficient in terms of procurement and also getting the best value, I still don't see it coming below 2.5 million dollars (US) per MW. So you'd still be talking about 2.5 million times 500MW, which is about 12 billion dollars (US)," Njoroge explained.
The money will be used to build six geothermal power plants within Ol Karia V that should generate 585MW by 2016 and diversify KenGen's power sources.
Drilling to reach the steam was a major problem in building geothermal power plants, but the company was planning to hire as well as buy new rigs.
Currently, the Great Wall Drilling Company of China is holding a 90 million US dollar contract for drilling of wells. KenGen is hoping other international companies will be interested in investing in its projects.
"The most viable one would be the BOT (Build Operate Transfer), for instance. We have the steam, yes, we have the steam, we want someone to come and build it and maybe operate it for a year or so and then transfer it to us," Njoroge said.
Fuel and electricity are among the top drivers of double-digit inflation in Kenya, which has eased for the second consecutive month to 18.3 percent in January down from 19.72 percent in November.
Kenya's peak electricity demand has risen to 1,200MW, compared with 780MW in 2002, driven by economic growth. - Copyright Holder: REUTERS
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