Geothermal energy in Kenya: 5,000 MW by 2030

Kenya’s power sector continues to introduce a more diversified energy-generation capability. Although hydropower generation remains vulnerable to drought and variations in rainfall, additional hydro facilities are being developed in order to reduce the country’s dependence on costly oil-fired capacity. Over the longer-term, the favoured form of renewable energy is geothermal, where potential is believed to be considerable. Meanwhile, coal-based generating schemes should provide medium-term electricity supply.

In the five years from 2011 to 2016, Kenya’s overall power generation is expected to increase by an annual average of 7.23% to reach 10.76TWh. Driving this growth will be a 5.04% annual average increase in hydropower and a 9.85% annual average rise in the supply of renewables-based electricity. Meanwhile, oil-fired generation is expected to fall by over 18% per annum as hydro increases in availability. BMI expects coal-fired power to become commercially available in the latter part of its forecast.

In addition to investments in oil and gas exploration, and the development of new coal-fired and hydroelectric power stations, Kenya plans to significantly increase the amount of energy generated by geothermal facilities. The country is already Africa’s largest producer of geothermal energy thanks to its strategic position over shifting tectonic plates. Over the next two to three years, the government plans to invest US$1.4bn in the construction of several new geothermal power plants with a total installed generation capacity of 280MW. By 2030, Kenya hopes to be generating 5GW of power from geothermal power; that would put Kenya among world leaders in geothermal terms.

Electricity feed-in tariffs (FiTs) in Kenya have increased interest in renewable energy sources in the country. Kenya’s FiTs guarantee the price paid for electricity from renewable sources, ensuring these technologies are cost competitive with more conventional power plants, and therefore encouraging the development of renewable facilities in the country.

Due to the expected rise in net energy generation over the next few years, Kenya’s power supply shortfall should eventually fall. This trend has potential to provide the country with a net export capability later in the decade. A gradual decline in the percentage of transmission and distribution losses from around 15% will help balance the market. By 2017, BMI predicts that Kenya’s power sector will develop a net export potential of 0.02TWh, with potential for this to rise to 0.55TWh by 2021.

Considering this key themes, major trend and changes for Kenya’s power sector this quarter include:

– Kenyan renewable energy company Kinangop Wind Park is planning to construct a 60.8MW wind power plant in Kinangop Plateau, Nyandarua County. The company aims to supply more power to the national grid through the plant.

– Kenya’s state-owned power operator Kenya Electricity Generation Company (KenGen) has generated US$920mn for its Olkaria IV geothermal plant, which will receive joint funding from KenGen, the Kenyan government, the World Bank, Germany’s KfW, the European Investment Bank, the Japan International Corporation Agency and the French Development Agency. The plant will have a capacity of 280MW, and is scheduled to become operational in 2014, with an investment of nearly US$1bn. Kenya has the potential geothermal capacity of 7,000MW, and is aiming production of at least 5,000MW by 2030.