Geothermal key to power woes: Firm

www.nation.co.ke
September 11, 2009

Geothermal energy is the answer to Kenya's unreliable and expensive electricity, an investment adviser has said. The country's geothermal potential is estimated at more than 7,000 MWs compared to the current output of 1,100 MW. Sixty two per cent of the existing power production is from hydropower, which is undependable because it relies on rainfall, while more than half of the remainder comes from thermal, an expensive source of electricity because it is oil-fired.

During power crises, the government routinely procures high cost emergency thermal electricity. For instance, while Kenya pays around 12 United States cents (Sh9.36) per kW-hour to buy electricity from renewable sources, emergency power generators are paid 20 US cents (Sh15.60) for the same unit.

During the 2006 drought, the year in which the government used emergency thermal power generators for a year, operators were paid Sh34.4 billion. "We need to keep away from thermal power generation and invest more in geothermal power because we believe it will be the next frontier for energy generation," said Stanbic Investment Management Services (Sims) chief investment officer Anthony Mwithiga.

He told a media briefing in Nairobi on Wednesday that geothermal was the only source of electricity that would reduce costs and guarantee supply. Currently, 14 per cent of the Kenya's electricity generation is from geothermal sources. In recent droughts, geothermal energy played a critical role as it continued to operate at nearly 100 per cent when many of the hydropower stations were crippled by the dry spells.

Geothermal energy is generated by drilling deep holes into the earth's crust, pumping cold water through one end so that by the time it gets back to the surface, the water can be hundreds of degrees Celsius hot which is then used as steam to drive a turbine which in turn drives a generator, thus creating power.

Natural resources
Sims investment manager Kenneth Kaniu said other countries in the region were leveraging on their natural resources to produce electricity. "Uganda intends to use thermal because it has found oil while Tanzania is intensifying power generation using its huge reserves of natural gas," he said. "These countries will be very competitive compared to Kenya in regard to cost of production."

Kenya, at Sh14.04 per kW-hour, remains the most expensive country in the region. Electricity consumers in Uganda pay an equivalent of Sh9.20 per kW-hour, while in Tanzania it is cheaper at Sh7.64 per kW-hour. Mr Kaniu said the establishment of the Geothermal Development Company by the government to help in development of geothermal energy was a wise decision. Through the firm, the government will finance geothermal exploration, drilling and assessment of resource then passing the resource to potential developers.

"Geothermal energy is expected to be the next field of concentration to wean the country from its over reliance on hydropower," said Mr Kaniu. Meanwhile, the drought currently ravaging the country could be Kenya's worst with water in rivers and dams falling below the lowest-ever recorded levels in the nation's history.

Data released by Kenya Electricity Generating Company, the country's main power producer, indicates that water inflows at River Tana are currently at five cubic metres per second down from the country best of 208 cubic metres per second recorded in 1997/98. "The situation is unusual as this is the lowest Tana inflows ever recorded in the last 75 years," KenGen says in its investor briefing write-up for its Sh15 billion infrastructure bond.

Tracking of the water flow data began in 1947 the previous lowest levels recorded in 1949/50, 1983/84 and 1999/2000. None of which have, however, hit the current levels. River Tana feeds five of the country's power producing dams with a potential to generate more than 740 MWs of electricity which is over a half of the current total installed capacity (1,400 MW) in Kenya.

Closed down
And with the country's heavy dependence on water generated electricity, the drought has reduced the power supply by about 23 per cent occasioning the current rationing programme. This, after KenGen closed down the 40-MW Masinga Dam in June due to low water levels while at the same time recording reduced power from the other dams. "Our challenge is to reduce high dependence on hydro power sources," says KenGen. But as the country moves to reduce dependency on water generated power, so is the push to move away from rain-fed agriculture, which has left more than 10 million Kenyans without food, forcing the government to declare famine as natural disaster.