This item was forwarded by our former Africa campaigner Ryan Hoover
(he now edits Investing In Africa: A Field Guide to African Stock
Markets, learn more: www.investinginafrica.net)--thanks Ryan!
http://www.businessdailyafrica.com/Corporate-News/KenGen-plans-14-temporary-steam-plants-in-two-years-/-/539550/1624616/-/item/0/-/84k316/-/index.html
KenGen plans 14 temporary steam plants in two years
By VICTOR JUMA
Posted Monday, November 19 2012 at 22:00
In Summary
KenGen plans to build 14 temporary geothermal plants with a combined
capacity of 65 megawatts (MW) by 2014 after completing the piloting of
a 5MW portable station late last year.
KenGen is stepping up production of electricity from portable
geothermal plants in a move that is set to boost the country�s power
supply and raise the company�s earnings.
KenGen plans to build 14 temporary geothermal plants with a combined
capacity of 65 megawatts (MW) by 2014 after completing the piloting of
a 5MW portable station late last year.
Construction of a typical geothermal plant takes between four to 10
years, but portable plants commonly known as wellheads take about six
months.
The development of cheaper plants means that the country will come to
rely less on thermal power, prone to the vagaries of high
international prices; and rain-fed hydroelectric dams.
�First, it will allow early generation to give Kenyans power quickly
before putting up conventional plants that take eight to 10 years to
implement,� Eddy Njoroge, KenGen�s managing director said in a
statement. �In this way, we are able to meet current supply-demand
needs as we invest to safeguard future supply.� Kenya is the first
African country to drill geothermal power, tapping vast reserves of
steam energy in the country�s Rift Valley region, which remains
geologically active.
The country has the potential to produce 7,000MW and is targeting
production of at least 5,000MW by 2030.
Geothermal Development Company (GDC), formed in July 2009 to spearhead
exploration of geothermal steam, earlier said it would sell steam to
KenGen, which will in turn use wellhead generators instead of a
conventional power plant, to convert it into power.
Wellhead generators enable producers to make electricity as soon as a
well is operational, instead of waiting to put up a power plant, which
normally would take about five years.
�With this concept, in the next two years, we should be able to
generate 200MW before even the main power plant has come on line and
that way we should be able to do away with emergency power that we
have been using whenever we have poor hydrology,� GDC managing
director Silas Simiyu said in an earlier interview.
It costs $0.18 (Sh15.30) per kWh to produce electricity using medium
speed diesel and about $0.07 (Sh5.95) per unit from geothermal, says GDC
GDC plans to drill at least 300 other wells in the next four years,
which it will hand over to independent power producers.
KenGen�s net profit grew 35.6 per cent to Sh2.8 billion in the year to
June and its share price has gained 23 per cent to Sh9.55 over the
past six months.
KenGen�s geothermal capacity stood at 158MW out of 1, 231 MW it
generated in the year to June.
In September, KenGen invited parties to submit bids for the
development of 560MW geothermal power plants as the firm races to
increase its share of power generated from renewable sources like wind.
It�s power generation from hydro stood at 812MW or 65.9 per cent of
electricity that the State-owned firm generated in the year to June.
Wind power stood at 5.1MW and thermal at 256MW.
The company said it planned to develop the power plants in phases of
140MW each at Olkaria, in the Rift Valley, under a joint venture
arrangement in which successful bidders would build and later transfer
the facilities back to the firm after 10 to 20 years.
Increased urbanisation and industrial activities have seen the
country�s electricity demand outstrip supply, forcing injection of
expensive thermal power.
Kenya�s installed electrical capacity now stands at 1,708MW against
peak demand of 1,221MW.
Electricity demand is expected to grow dramatically by 2030. The
government envisions total electricity capacity to hit 17,764MW by
2030 to meet a projected peak demand of 15,066MW by that time.
The cost of energy is a key factor in Kenya�s inflation levels and
policy makers have identified geothermal power as an avenue to deliver
cheap power and sharpen the country�s competitive edge.
KenGen�s market share grew to 75 per cent from 70.7 per cent a year
earlier and 53.1 per cent in 2010, according to Kenya Power�s
financial statement.
The statement also shows that Kenya Power, the sole buyer of bulk
power, bought electricity worth Sh21 billion, meaning that the
independent producers posted sales of Sh5.1 billion given KenGen�s
revenues of Sh15.9 billion.
At Sh5.1 billion, the independent power sellers saw their revenues
drop from last year�s Sh5.9 billion and Sh9.6 billion in 2010.
KenGen installed plants with additional capacity of 52.5 megawatts
while some that were upgraded mid last year like the 120MW gas-driven
Kipevu plant and Tana Hydro reported full year of operation.
The shifts in market share have cut the earnings of the independent
power producers by 46 per cent over the past two years and lifted
KenGen�s net profit and dividends.
KenGen�s net profit grew 35.6 per cent to Sh2.8 billion on increased
sales, which rose to Sh15.99 billion from Sh14.3 billion. The
company�s share price has gained 23 per cent to Sh9.55 over the past
six months.
vjuma@ke.nationmedia.com
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