Monday, 30 July 2012

2016: Kenya's Magic year in energy supply


Geothermal steam wells. Coming to the rescue
TWENTY SIXTEEN. Twenty sixteen is the year by when Kenya's electricity supply will be boosted by an estimated 1432MW from clean energy sources, including wind power and geothermal. And the cost of energy will decline by nearly 10 US cents.

But twenty fourteen is also significant. That is when these sources will begin coming on stream. The players in this sector are going full steam to beat the target time.

AWind Turbine: A clean energy generator
The players include; Geothermal Development Corporation (GDC); Kenya Electricity generating Company (KenGen) and Lake Turkana wind power project.  Both KenGen and GDC are wholly government owned. Lake Turkana wind power ltd is a privately owned company whose goal is to generate some 300MW into the national grid from wind power.

GDC was set to spearhead the development of geothermal power. Kenya is said to have a capacity to generate 10,000MW of electricity from geothermal sources. GDC expects to have developed some 5500MW by 2030. Its initial output will be 400MW to come on stream in 2016. GDC develops the steam wells for concessioning to private power producers.

KenGen on the other hand, the only power generator in the country expects to add some 1832 MW into the national grid by 2016 from various sources including Hydro, Thermal Geothermal and even coal.

Hydro electric Dam; Taking a back seat

 In short, by 2016 Kengen will double its current capacity to 3000MW of which geothermal will the dominant source generating 882MW; Hydro at 820 MW; coal 600MW; wind 62 MW. The viability of a 150MW windfarm is being studied at Marsabit Country. There is also potential for a 400MW import from Ethiopia and another 300MW LNG import from Tanzania.

But before 2016, another magical year for power generation in this country is 2014. That is the year some of the on-going projects are expected to start  generating power into the national grid.

Last week, KenGen Commissioned the construction of a 280MW project at OL Karia IV that will be completed in 2014. Lake Turkana wind project expects to produce some 90 MW by 2013 and be fully operation by 2014.

This is to say that by 2016, Kenya’s power supply is expected to stand at 3700MW of which renewable sources will contribute 1582 MW. Hydro will generate 820MW while other sources will generate the rest. 

Going by the geothermal and wind energy prices, Kenyans have every reason to look forward to 2016 when energy price will shrink significantly. The price per kilowatt hour is fixed at six US to eight cents which is more than half the current price of 16 US cents a Kwh. 

Currently for every dollar worth of expenditure on power, the cost of fossil fuel used to generate thermal power takes 35 per cent, energy consumption stands at 52.7 per cent, forex  charge 5 per cent taxes take 2.7 per cent other charges take 2.8 per cent. From this analysis, fuel index is a large contributor to power costs in the country. In fact, at 35 per cent, it is very low. Depending on the cost of crude in the world market, Fuel index sometimes rises up to 70 per cent of the total bill.

Now come 2016 and much of the thermal power Capacity will be retired reducing the cost of power by between 35 and 70 per cent. Looked differently, a dollar will buy more power in 2017 than it does now. That is why Kenyans look to the year with great optimism. It will set them free of the tyranny of high electricity bills.

 Apart from low bills, the entry of  renewable sources of energy will mean the  end of power outages caused by rationing. That will mean cheap and efficient production of goods and services in the country.

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