KenGen is investing in expansion of geothermal energy production. What is the status of ongoing projects and what’s the target in the immediate and medium terms?
Most of the geothermal power projects in the pipeline are in various stages of implementation. The company is targeting an additional 720MW to the national grid in the medium term. The development of Olkaria 1 Unit 6 geothermal power plant, which began in December 2018, has been on-going and is expected to be completed in 2021.
How has the Covid-19 pandemic affected implementation of projects?
Given the long-term nature and capital requirements of our projects, KenGen is continuing with the plans for the various projects which are in the pipeline. However, their implementation, scaling down or suspension will be determined on a case-by-case basis, depending on how the Covid-19 situation evolves.
KenGen operates some thermal power plants, yet the government has announced plans to phase out thermal power. How will this affect the company?
According to the Economic Survey Report (2020) by the Kenya National Bureau of Statistics (KNBS), thermal power generation registered a decline of 15.0 per cent to 1,313.3GWh in 2019. Geothermal energy production increased by 25 per cent to 828.4 MW in 2019. Looking at the company’s unaudited results for the half-year period ended December 31, 2019 and full year ended June 30, 2019, geothermal energy was KenGen’s top earner. The company, which has embarked on a geothermal energy-led strategy, is also exploring other avenues for achieving revenue growth through its business diversification strategy.
Electricity costs in Kenya remain high despite the main hydro-power dams at the Seven Forks being full and investments in renewable energy. Why is this so?
KenGen’s mandate is to generate electricity through the development, management and operation of power plants. The company only generates electricity and does not determine its cost.
Kenya has been named the seventh world’s largest geothermal energy producer. What does this mean for KenGen?
First, this achievement endorses the country’s geothermal energy prowess. The investments Kenya has made in geothermal energy production are paying off. The future is bright as Kenya has barely scratched the surface in geothermal energy production. The country’s geothermal energy potential is estimated at 10,000MW. This reinforces KenGen’s expertise in geothermal energy matters, further boosting its quest to expand across Africa with the main focus being geothermal drilling and consultancy services.
Last year KenGen won two geothermal contracts in Ethiopia. What is KenGen’s strategy beyond Kenya?
KenGen has in place a diversification strategy which is geared towards expanding the company’s footprint across Africa. Some of the services the company is keen on offering across the continent is geothermal drilling and consultancy services.
Which other countries is KenGen targeting and what are the opportunities in these countries?
KenGen is targeting Uganda, Tanzania, Djibouti, Rwanda, South Sudan, Sudan, Zambia and the Comoros.
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