Thursday, 5 January 2012

Africa’s largest wind Power farm set to start


A wind power farm: LWTP is building a similar project.

Kenya, East Africa’s largest economy is weaning itself from dependence on hydro-generated electric power. She is now turning to other renewable sources of energy such as wind and thermal power.
The country 1173 MW and consumes almost the entire lost leaving no excess capacity. Electricity generation requires excess capacity to deal with any unforeseen occurrences. Kenya’s second wind power farm will come on stream at the third quarter of 2012.  
Of the 1173 MW generated an estimated 400Mw is hydro, some 200 MW is generated from Geothermal and the rest is met by expensive Thermal energy plus some little imports from Tanzania and Uganda.

Consequently, the country sole power generator, KenGen, is running full steam working on clean energy sources. Among these are Geothermal from which it expects to generate some additional 4000 MW in the next four years. It has started a small-scale wind power which is already feeding 13.5 MW into the national grid. The first wind power farm came on stream in 2009

A second wind farm, owned by the private sector, is expected to come on stream later this year. It is by far the largest wind power farm in Africa. Known as Lake Turkana wind power (LWTP) project, it will produce 300MW of electric power a year and effectively retire expensive-diesel powered electric power.

This will catapult Kenya into the Pole Position as the greatest producer of clean power in Africa. The € 600 million wind farm will produce the cheapest power in Kenya at €0.0752 per kilowatt hour.

 Lake Turkana, from which the farm derives its name, is located some 500Km North West of Nairobi, the Capital. The farm has already signed a fixed Power Purchase Agreement with Kenya power and Lighting Company, KPLC, the national power distribution agency. The 20-year agreement stipulates that KPLC will pay this 7.52 Euro cents per KWh for the 55 per cent load factor and Euro cents 3.76 for any quantity above the 55 per cent load factor.

LWTP is upbeat that after years of painstaking preparations it has crossed the final hurdle and will soon come on stream. The hurdle was a demand for a sovereign guarantee against political and other risks in addition to the PPA. That was granted a year ago by the Kenya government opening the way for closing of the financing deal.

That deal, according to company officials, will be closed by March/April this year. The deal will enable LWTP to produce the first 50 megawatts (MW) of electricity in the third quarter rising to full capacity a year later. Lake Turkana Wind Power will build at least 353 wind turbines each with a generating capacity of 850 KW of electricity.

The farm, once on stream will supply of 22 per cent Kenya’s electricity demand. In addition, the country is expected to bring on stream a further 400MW geothermal power in the next four years. It is not clear, how much potential wind power holds as a potential for Kenya as a source of energy. Kenya has an estimated potential to produce 7000MW of geothermal energy, said the Minister for energy, Kiraitu Muriungi.

The Turkana wind farm is a private Company that need government guarantees in order to attract financiers. It is right from its conception in 2004, been financed through a complex financing model which began with raising the seed money to raising funds through private placements to finance each milestone in its development.

The final stage is being financed through a 30 per cent syndicated loan arranged by the African Development Bank (AfDB). Other financiers are the Standard and Ned banks of South Africa, BKF, a Danish development bank and the European Investment Bank who will pump in €42.8 million.

The project is 51 per cent owned by Aldywich International, South Africa’s IDB (25 per cent), Pan Africa Investment Development Fund and Vestas— the leading Danish manufacturer of wind turbines (12.5 per cent) and the six co-founders (6.5 per cent).

Wind power, coupled with geothermal and  hydro-electric power that already accounts for more than 70 per cent of Kenya’s electricity demand, will  make Kenya nearly 100 per cent dependent on environmentally-friendly energy sources and eliminate power  fluctuation in output from hydro sources. Currently, it uses Thermal power to smooth out fluctuations.

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