Nairobi, Kenya --- ESI-AFRICA.COM --- 24 November 2010 - The government of Kenya plans to have almost half of the country’s national power output produced from geothermal sources by 2018 as a strategic shift from hydro power, which has become unreliable because of erratic rainfall.
This involves pumping water to underground wells that heat up to produce steam that creates energy. Even though is more reliable, skittish investors are demanding to be cushioned from losses should they hit dry wells, and the Treasury has declined to offer such guarantees.
Energy minister Kiraitu Murungi said the government was considering setting up a risk mitigation fund. “Beneficiaries will be required to pay 40% of the cost of a dry well,” he explained. “Under this arrangement Kenya will accelerate geothermal drilling and power plant development,” he told the Germany Development Bank.
Kenya is among few countries with huge untapped geothermal power, with 14 sites in the Rift Valley that have an estimated potential of between 7 000 and 10 000MW.
Only 265MW are currently produced from geothermal sources in Kenya, and KenGen managing director Eddy Njoroge said production of 1 260MW from geothermal sources in the next seven years would require funding of US$4.5 billion (R31.5 billion).
This would reduce over-reliance on hydro power, which presently contributes 54%. The intention is that by 2018 hydro power’s contribution will have dropped to 28%, and geothermal will have risen to 18%.