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Kenya to add 53MW cheap geothermal power in 2026
Managing Director & CEO of the Geothermal Development Company Paul Ngugi before the Public Investments Committee on Commercial Affairs and Energy at Parliament buildings Nairobi on April 16, 2024.
An extra 53 megawatts of geothermal energy will be injected into the national grid priced at an average $0.069 per kilowatt-hour (Sh8.9 at current rates), boosting Kenya’s push to supply affordable electricity to consumers.
The additional power will come from the Olkaria I geothermal plant, which is being expanded from 45 megawatts to 63 megawatts, as well as from the 35-megawatt plant owned by OrPower 22.
The additional capacity is expected on the national grid by June 2026.
At Sh8.9 per kilowatt-hour (kWh), power from the two plants will be the third cheapest source of power, after locally generated hydropower, which was priced at Sh3.83 per kWh in February last year.
A unit of imported power from Ethiopia was priced at $0.065 (Sh8.39 at current rates) per kWh as of early last year.
Kenya is keen to bolster electricity supply at affordable rates in a bid to ease the burden of power bills on businesses and households.
The plan largely relies on increased generation of hydropower and geothermal.
“Its (geothermal) availability and costs, and also looking at it from a business perspective, you can predict what the cost of this power will be for the next 25 years, as opposed to fossil power plants,” Paul Ngugi, Managing Director at Geothermal Development Company (GDC), said on Wednesday at the Sustainable Energy Conference in Olkaria, Naivasha.
He added that Kenya is keen to further bring down the average cost of a unit of geothermal power to address one of the single biggest costs that manufacturers have grappled with over the years.
Kenya has, in the past, failed in efforts to compel power producers to lower the prices at which they sell electricity to Kenya Power. Reducing the prices was key to lowering retail prices of power by up to 15 percent.
New power purchase deals at lower prices are now the most viable avenue for the government to ensure that consumers get affordable electricity.
Hydropower from Ethiopia has, since 2022, been critical in helping boost the supply of electricity while at the same time avoiding steep prices.
This is because electricity from the Horn of Africa economy has helped Kenya to ease reliance on the dirty and expensive thermal plants, where a kWh has recently hit Sh56.
OrPower 22 is one of the three independent power producers tapped by the government, through GDC, to build three geothermal plants with a combined capacity of 105 megawatts in Menengai.
OrPower was fully bought by the China-based Kaishan Group two years ago. OrPower 22 was a subsidiary of the US-based Symbion Power.
The others are owned by British clean energy firm Globeleq and Sosian Energy, which is linked to the family of the late President Daniel arap Moi.
The Kenya Electricity Generating Company (KenGen), the largest supplier of power, started the expansion of Olkaria 1 from its current generation capacity of 45 megawatts to 63 megawatts as the firm seeks to cement its production dominance.
Olkaria 1 is the oldest geothermal plant in Kenya, and its first production unit was installed in 1981.
KenGen owns six geothermal plants and three well-heads supplying electricity to Kenya Power, while a further four are owned by OrPower 4, and one is owned by Sosian Energy.
Kenya has a vast yet largely untapped potential of geothermal energy in the Great Rift Valley, estimated at more than 10,000 megawatts.
The total installed capacity of the operational geothermal plants is currently 940 megawatts, with an output of 876.1 megawatts.
KenGen accounts for 80.2 percent (754 megawatts) of Kenya’s total installed capacity for geothermal power.
