12 October 2012 - Power utility Kengen has opened bidding for the construction of geothermal power plants in the Great Rift Valley, in an initiative to achieve 560 MW of geothermal power production by 2016. This will cost an estimated US$12 billion. The call, advertised in Kenya’s Daily Nation newspaper, asks for bids from companies and consortiums for the construction of 560 MW of power plants, to be located at Olkaria in the Great Rift Valley. The advertisement says that while the sought-after contract would be based on a joint-venture agreement, the successful bidder or consortium would be the majority shareholder.

The company intends construction of the power plants to proceed in phases, developing 140 MW sections at a time.  Under the terms of the agreement, the successful bidder will transfer the completed power plants over to Kengen within 10 to 20 years following completion.

It forms part of Kenya’s Vision 2030 goal of reducing reliance on hydro and thermal power.  Hydro power currently accounts for 46% of the country’s electricity demand, but with only 15% of Kenyans connected to the national power grid consumption is set to rise in line with national development. With hydropower susceptible to weather trends, the country has outlined a shift to greater reliance on alternative power sources.

It is estimated that given the geologically active areas present in Kenya, particularly in the Rift Valley region, the country has the potential to produce 15,000 MW through geothermal sources, with current output standing at only about 200 MW. The target is to achieve 5,000 MW of geothermal power by 2030. Geothermal represents the least cost power source for Kenya and the government says that the optimum solution indicates that geothermal capacity should be increased from the current 198MW to 5,530 MW in the planning period, equivalent to 26% of the system peak demand by 2031.