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September 7 2009 (businessdailyafrica) Kenya is set to benefit from a Sh1.7 billion geothermal power project to be set up by the European Union in the Rift Valley.
Executives in the energy sector say the funds will be used for feasibility studies and exploration work in an effort aimed at laying the ground work for the entry of private investors into geothermal generation.
Private investors have preferred to invest in thermal power (diesel-driven) since they are cheaper to develop compared to geothermal but get expensive in the long run when its impact on power bills inflation and environmental damage are factored in.
Now, the EU seeks to reverse this trend by providing investor information such as maps of potential drilling points and helping the government to formulate policies that would help investors put their money in geothermal power generation.
This comes at a time when the country is faced with a power shortfall that forced power managers to turn to rationing and to the more expensive thermal production to meet the ever rising consumers demand. “Geothermal energy covers one of the four interdisciplinary core programmes of our centre and is part of its strategic priority in developing eco-friendly renewable energy”, says Giorgio Rosso Cicogna, the managing director of International Centre for Science and High Technology — United Nations Industrial Development Organization (UNIDO). The project will be implemented by UNDO at the request of the Africa Union which has already submitted the project’s proposal to the European Union — the financiers of the project.
Kenya derives 130 megawatts of power or about 10 per cent of its installed power capacity from geothermal sources despite the potential of about 7, 000 megawatts. The country’s peak demand stands at 1,070 megawatts.
Kenya requires an additional 1,500 megawatts in the coming 10 years to stabilise supply, and the government is keen to tap into the least cost generation. The government has already established a state-owned Geothermal Development Company (GDC) to rev up the contribution of geothermal production.
This will allow the government to facilitate the huge funding required for geothermal projects, which has acted as a deterrent for private firms to explore that segment. |
