ENERGY

Kenya eyeing Italian investors to grow geothermal output

The state is eyeing 10,000MW from current capacity that stands at 949.13MW.

In Summary

•Currently, geothermal accounts for nearly 50 percent of total power generation in the country.

•The PS added that to achieve the 10,000MW, the government has issued geothermal resources exploration and development licenses to two public power companies and fourteen (14) Independent Power Producers

The Olkaria II Geothermal Power Plant in Naivasha
The Olkaria II Geothermal Power Plant in Naivasha
Image: FILE

Kenya is looking for Italian investors in its bid to increase the national installed capacity for geothermal power to 10,000 MW by 2037.

This will be more than ten times the current capacity which stands at 949.13MW as of June 2022.

Despite the huge potential offered by Geothermal production, there has been a slow growth in its development attributed to among other factors, the huge upfront financial investments by IPPs required for infrastructure development; exploration, geothermal well drilling and power plant construction.

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To actualize this the Ministry of Energy and Petroleum is hosting the Italian - Kenya Business Investment forum with a focus on Geothermal, as it looks to foster partnerships between energy institutions and companies in the two nations.

The forum intends to offer Italian participants new opportunities for investment, technical and commercial collaboration in the geothermal sector with Kenyan counterparts.

Principal Secretary, the Ministry of Energy and Petroleum, Alex Wachira says that despite Kenya being the first in Africa and eighth globally in geothermal development it is producing less than 1,000MW leaving a huge potential of nine GW untapped.

“Attaining Kenya’s geothermal development targets, still requires investment at a level beyond what the government can make available which calls for enhanced private sector participation,” said Wachira.

He notes that, whereas the private sector is interested in developing the power supply (downstream), a combination of significant capital investment needs and high resource risks has translated into reduced private sector interest in geothermal exploration

Currently, geothermal accounts for nearly 50 percent of total power generation in the country with an installed capacity of 949.13MW as of June last year.   

Whereas 82.6 percent of the installed capacity was contributed by KenGen, the balance is generated by IPPs. 

The forum spearheaded by United Nations Industrial Development Organization (UNIDO), follows an agreement signed in October 2022 between Unione Geotermica Italiana (UGI) and the Geothermal Association of Kenya (GAK) that will see Italian Investors Inject capital into selected geothermal projects.

The PS added that to achieve the 10,000MW, the government has issued geothermal resources exploration and development licenses to two public power companies and fourteen (14) Independent Power Producers (IPPs) to develop some of the existing 23 geothermal fields/prospects.

However, increased investment has seen the East African economy climb global rankings, with recently commissioned geothermal stations taking Kenya’s capacity closer to the geothermal “gigawatt club”.

The International Renewable Energy Agency’s renewable energy statistics 2022 ranked Kenya’s 863MW geothermal capacity at position seven globally.

The United States tops the ranks, with 3 889MW, followed by Indonesia (2 277MW), the Philippines (1 928MW) and Turkey (1 676MW). 

New Zealand (1 237MW) and Mexico (1 034) were in fifth and sixth place.

Below Kenya are Italy (772MW), Iceland (756MW) and Japan (481MW), completing the world top 10 with the largest installed capacities.

In East Africa, KenGen’s (1 904MW) installed generation capacity represents more than 60 percent market share with more than 86 percent drawn from green sources — hydro (826MW), geothermal (799MW), thermal (253MW) and wind (26MW). 

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