Kenyan infrastructure benefits from east-Asian geothermal rivalry

• 12 years ago (2011-11-08)
• Junior Isles

Asia 849 Renewables 752

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Japanese firm Toyota Tsusho Corp and South Korean Hyundai Engineering Co of have won a bid to build new Kenyan geothermal plants worth Sh40 billion ($400 million), reinforcing north-east Asian involvement in Kenya’s geothermal power generation programme.

They will build a new 140 MW plant in addition to expanding the capacity of another from 45 MW to 185 MW, setting the stage for cheaper and more reliable electricity in Kenya.

The consortium beat four other bids including Japanese Mitsubishi Corp., who were involved in developing an earlier geothermal plant in Olkaria. Rival Chinese firms are also showing interest in building geothermal power plants in Kenya.

“These projects mark the beginning of Kenya’s journey to transform its energy sector and put the country on the path to green economic growth,” said Prime Minister Raila Odinga during the signing of the deal in Nairobi.

Geothermal capacity in the area will rise to a total of 430 MW from the current 150 MW by April 2014, when commercial operation is expected to ramp up and force out expensive, but cheaper to install, thermal generation.

Kenya currently has power generating capacity of about 1100 MW, with hydro-power accounting for about 44 per cent. Lack of water due to droughts has recently hit hydro operations, prompting the country to turn to expensive fuel-driven generators to match the rising demand for electricity. These inefficient fuel generators have pushed up electricity prices by 65 per cent since the start of 2011.

Kenya has potential to produce 7000 MW from geothermal power and is targeting production of at least 5000 MW from it by 2030. The green energy projects will help KenGen earn hundreds of millions from carbon credits as it invests more and more into renewable power.

The increased focus on geothermal generation looks set to renew the competition between Japan and China for their expertise on future power infrastructure projects in Kenya.

China is ahead in road and airport construction, but is keen to get a piece of power sector profits and recently signed a memorandum of understanding with the Kenya government to drill 80 geothermal wells, with funding expected to come from the Chinese Exim Bank.