Originally published at Montara Energy Ventures.

Olkaria II Plant


Electricity generator KenGen yesterday signed a contract with Mitsubishi Corporation and Mitsubishi Heavy Industries for the construction of a 35 megawatts geothermal power plant at Olkaria II. Installation of a third machine at the power station, which was commissioned four year ago, will boost the country’s geothermal production from 130 MW to 165 MW.

Kenya’s current geothermal capacity comprises KenGen Olkaria I (45MW), Olkaria II (70MW , Orpower (13MW), Oserian Development Company (2MW). However potential exists for up to 2,000 MW of geothermal energy in the Kenyan Rift Valley. Two months ago KenGen and Great Wall Drilling Company (GWDC) of China began drilling geothermal wells, setting the stage for development of another 70 MW at Olkaria IV.

The Olkaria II plant will be funded by KenGen (Sh2.9 billion), the International Development Association (Sh1.5 billion) and the French arm for international development (Sh1.7 billion). As a clean energy, the geothermal expansion project has qualified for carbon credits of about Sh800 million under the World Bank sponsored Clean Development Mechanism programme. The plant is scheduled to go online in 2009.

Kenya is grappling with the challenge of providing power to a resurgent economy that saw peak demand in the first six months of this year jump from 980 megawatts (MW) to 1,082 MW against a national electricity generation capacity of 1,045 MW. This peak demand exceeds capacity by about 4% and could serve as a governor to future economic development.

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