Kenya has saved Sh9 billion in three months by tapping into their geothermal resources, Standard Digital reported.
The Kenya Electricity Generating Company (KenGen) made the strategic decision to capitalise on their geothermal resources by adding 280MW of geothermal energy to the national grid. The power started feeding into the national grid in July this year.
“This geothermal power displaces diesel, which saves the economy Sh100 million a day. Once we switch on the entire 280MW, Kenya will save Sh42 billion a year,” said KenGen Chairman Joshua Choge.
Standard Digital reported that Choge told the Weekend Business in an interview that energy users will see the financial benefits of this development in December.
Tariffs will decrease by 30 percent from next month, a source revealed.
Electricity bills have started to show the 50 percent decrease in ‘fuel cost adjustment’ within the past three months, Standard Digital reported.
The Energy Regulatory Commission (ERC) said that electricity prices have reduced at a consistent pace between July-November 2014, as a result of the fuel cost reductions from Sh7.22 per KWh in July to Sh3.47 in November. Standard Digital said.
The renewable energy contributions has allowed for the fuel cost reduction, where geothermal and hydro have been fed into the grid. According to the ERC the unit cost of electricity for local consumers has dropped by 24 percent, Standard Digital reported.
Mr Choge said: ‘If the rains had been better in the major catchment areas where we have our hydro-power stations, the effect on costs would have been bigger. Fortunately, with geothermal power, we do not have concerns about drought or off seasons; it is reliable and long term. We are getting the steam from wells that are 3km deep’.
KenGen is adamant that the continued efforts of using renewable energy will solve many of their power challenges. Their actions reflect this as they have added a further 10MW of wind and 7MW from well heads, which comes from geothermal generation.
These additions have brought Kenya’s total installed capacity to 2 000MW, contributing to Governments short term strategy of 5 000MW by 2017.
The question of their being enough demand for the increased output is in the air as Kenya Power has only sold an extra 10 percent units of power from the start of the year until June. Compared to last year there is almost no difference, Standard Digital reported.
‘We have started a serious campaign to create demand. We don’t see ourselves struggling to find customers. The instruction KenGen has is to lower the cost of power by 40 per cent by 2017. The moment we lower the cost of power, we will get the industries’, Choge said.