In Summary
  • The estimate right now is that by the end of this year, Nakuru County alone will be producing nearly 600 MW of geothermal power
  • The main centre of activity in the immediate period remains Olkaria where KenGen is at advanced stages of completing new power plants

Nakuru County is on the brink of experiencing major flows of new investments following an unprecedented boom in geothermal energy exploration and production.

If you are a private equity firm or any other investor with the financial capacity, experience and knowledge in development of geothermal  power, now is the time to look at Nakuru county.

Already, a number of new large and complex power plants are under construction.

In Naivasha’s Olkaria area, the state controlled KenGen is putting up several power plants with a combined capacity of producing 280MW. This makes Olkaria the largest geothermal production  field in Africa.

The whole project is estimated to cost a billion dollars (about Sh87 billion under the current exchange rate).

And, in Menengai, 20 kilometres from Nakuru Town, the State owned Geothermal Development Corporation  has completed drilling a total of 22 geothermal wells.

Three private independent power producers  have already been contracted under  the so-called “build operate and own” arrangement to construct  three new power plants from the geothermal steam produced in Menengai.

The three are a consortium led by the private equity firm Quantum Strategies Ltd, an entity by the name Sosian Energy Ltd and Ormat Energy of the United States.

The Menengai power plants will be contributing 100 MW of power to the national grid by December.

In the Naivasha area, the American company - Ormat, through its subsidiary, Orpower 4, is also at an advanced stage of completing the final phase of constructing the  Olkaria II power plant, bringing the capacity of this power complex to 100 MW.

The power is sold under a 20-year purchase agreement with Kenya Power.

Two other independent producers - Agil Energy and Marine Energy - who were granted geothermal energy concessions way back in 2009  are also at advanced stages of starting to drill.

Agil has been granted a concession in the Longonot area while Marine Energy  has a concession on a location near Suswa on the Narok border.

In total, the estimate right now is that by the end of this year, Nakuru County alone will be producing nearly 600 MW of geothermal power - just under 50 per cent of the electricity the whole country consumes currently at peak demand. Only recently, there was celebration in Olkaria when KenGen announced a spectacular discovery in its drilling programme.

GDC HAS DRILLED 22 WELLS

One of the wells produced what is so far the biggest geothermal well in Africa with a capacity to produce 30MW of electricity.

Until then, the average drilled well in Olkaria had a capacity of between 5MW and 10MW.

That discovery served to re-emphasize the point that the geothermal industry within Nakuru County had reached a tipping point.

Menengai itself is a hive of drilling activity. GDC has deployed a total of four drilling rigs each purchased at approximately $30 million.

So far, the State-owned body has drilled a total of 22 wells.

Geothermal drilling is a massive, complex and expensive operation.

One of the rigs in Menengai - an imposing giant engineering structure surrounded by heaps and piles of pipes – runs on an expansive power generation station that operates 24 four hours a day.

The diesel generators running the rig itself have a capacity to produce a massive 4MW of electricity. The plant consumes between 300 to 400 bags of cement per week.

About a kilometre away within the drilling location, there is a massive camp hosting more than 200 workers, complete with dormitories and a restaurant.

Menengai is bracing for even more activity in the coming months.

The engineer in charge, Mr Joshua Kangogo revealed that the company will shortly be receiving another three drilling rigs, bringing the total to seven.

When they receive the new rigs, GDC expects to rev up drilling activity for the next phase of the development programme in Menengai which will involve a 360MW plant expected to be completed in 2017.

The project is funded by the French agency AFD, (Euro 80 million) and the World Bank ($122 million).

Page 1 of 2