Kenya to Add 280 Megawatts of Geothermal Power, but Seeks Future Nuclear Power Solution

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The state-owned Kenya Electricity Generating Company (KenGen, Nairobi) is extending the Olkaria I and II geothermal power project with a $1 billion investment in Olkaria IV. A consortium of Toyota Tsusho Corporation (OTC:TYHOY) (Tokyo, Japan) and Hyundai Engineering and Construction (KSE:0720) (Seoul, South Korea) is planning to begin construction on the $384 million project by the end of this year. The 280-megawatt (MW) plant is scheduled for commercial operation at the beginning of 2014.

Olkaria I and II currently produce a total of 115 MW. Hyundai has selected Toshiba Corporation (OTC:TOSBF) (Tokyo, Japan) to supply four 70-MW steam turbines and generators for the project.

The Kenyan government, the World Bank, Germany's Development Bank KfW, and the French Development Agency are financing the geothermal project and KenGen.

Kenya is targeting a minimum of 5,000 MW of geothermal power by 2030 out of an estimated 7,000 MW of geothermal potential in the Rift Valley area. Using this source would add significantly to the country's power supply and would reduce the high cost of thermal power production and provide more security of supply than the sometimes drought-hit hydroelectric dams.

Eddy Njoroje, KenGen's managing director, said that the high cost of electrical power and high fuel costs are among factors that saw Kenya's annual inflation rate rise to 18.91% in October, which was the 12th consecutive increase in the rate. He added that there was a narrow margin between the current demand and supply of electricity in the country. An additional 202-MW mix of thermal, renewable and rehabilitated hydropower would go to the national grid.

"Peak power demand now is about 1,200 MW," Njoroje said. "Our total installed capacity is about 1,400 MW, but when you really calculate the effective capacity, because of hydro, it comes down to about 1,100 MW."

Karanje Kabage, Kenya's energy committee commissioner, speaking to the Nairobi Star said that Kenyans should stop blaming the energy ministry for the low power production and high cost, since there were many internal and external factors, among them the weakening Kenyan shilling.

Kabage said that the current power production (which he estimated at 1,550 MW) was far below the country's energy requirements and that the solution to the country's power problems lay in nuclear energy, which would eradicate erratic power interruptions.

He said that the government was investigating ways to produce nuclear power to complement hydropower, especially for industries with electrically powered machinery. The committee was exploring how the country could have nuclear power by 2020. In addition to nuclear, the committee was prospecting for oil and gas as alternative sources of energy to supplement wind, hydro and geothermal sources.

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