Kenya gunning for eighth slot in world geothermal rankings

Screengrab of KenGen Presentation

Kenya is set to leapfrog Iceland as the world’s eighth largest geothermal producer in the World.  The country will launch its 165.4 Mw Olkaria V power plant in July this year bringing its total geothermal capacity to 855.4 MW, ahead of Iceland’s 710 MW.

 And going by the string of investments currently in progress, Kenya could also leapfrog Italy, the “birthplace” of geothermal technology from position seven in a year or two. In fact, Mexico and New Zealand also have their positions seven  and six respectively, threatened by Kenya’s investments.

The capacity of these three are Italy 944 MW; Mexico 951 MW and New Zealand 980 MW. All these are within Kenya’s sight which has a penchant for large capacity plants. Currently, there are three projects whose contracts have been approved to generate more than 400 MW of geothermal power in the next three years. These are; Suswa 300MW and Menengai GDC field 105 MW. This is in addition to Kengen’s Olkaria 1 unit 6 that will generate 83 MW and is expected to come on stream in 2021.

 Currently, Kenya is probably the only country in the world that has geothermal as its baseload source. Baseload is the minimum power that must be in the system always. Hydropower has relinquished that position, which it held for dog years to geothermal. Kenya’s geothermal potential is estimated at 10 GW found mainly in the Greater Rift Valley.

Italy discovered and developed geothermal energy more than 100 years ago. It was the leader until the second half of the 20th century when other countries tapped into the power source, says Energy Siren. The United States is the current leader in geothermal generation with a capacity of 3,591 MW, adds the publication.

Ol karia V: Set to catapult Kenya to
the eighth slot in the world.

Given the rise of geothermal, the Kenyan power distributor, KPLC, has re-engineered its power purchase–mix, buying more geothermal energy in 2018.  The mix comprised of: geothermal 47 percent; hydro 39 percent; Thermal 13 percent in 2018.  The mix is expected to change further this year with the entry of must-consume sources such as Wind and Solar power. Wind power formed only one percent of its purchases last year and solar power was virtually unknown.

The geothermal capacity at 700 MW, is second only to Hydro at 821 MW but, given the growing investment in this industry, Hydro will soon relinquish its top slot. For instance, In July this year, KenGen, the leading power generator in the country, is set to Commission the 165.4 MW Ol Karia V geothermal power plant, raising Geo capacity to 855.4 MW, just ahead of hydro.

Kenya’s current electricity generation capacity has risen to 2715 MW against a peak demand of 1802 MW. Demand, according to KPLC, grows at 8.8 percent a year.  With the entry of the 165.4 MW Olkaria V, in July, Kenya’s power generating capacity will rise to 2880 MW. Demand, at the going growth rate,

will stand at 1961MW, leaving a spare capacity of 919 MW or 32 percent.

The spare capacity, which is a requirement in power generation, stood at 23 percent by June 31, 2018, says the power Distributor, KPLC, in its annual report 2017/18.  However, the capacity rose to 34 percent following the Commissioning of Lake Turkana wind power and the Garissa solar farm.  These two added a further 364MW to the national grid.

 Although the spare capacity is good for the power generating community- and the country since it eliminates power black-outs and rationing-they are a cost that has to be financed by the consumer.

Excess capacity,--idle capacity if you wish-  is also good for planning for it ensures that new investment in power generation is prudently studied-and allowed when necessary.

 The growth of renewable and cheap green energy sources has rendered thermal technology obsolete. Power deficits in the 1990s, according to a World Bank study, forced many African governments to allow investment in quick- to -commission thermal powered generator. At that time, crude oil Price was less than $20 per barrel.  They were thus manageable. However, with the rise in crude prices, thermal power generation has become expensive.

These contracts, called Power Purchase Agreements, PPAs still continue to haunt the electricity consumer. Coupled with excess capacity now, they keep the power bills high.

With hydro turning into a stabilization source, the need to re-engineer power generation sources in Kenya is high. The restructuring will involve decommissioning thermal power plants. But the cost of doing so at once is astronomical.  Hence the decision to allow the contracts to run their course, decommissioning thermal plants once their contracts expire.