Isra-Mart srl:Kenya heats up $2.6bn geothermal plan

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Kenya has confirmed that it will embark on a 10-year, $2.6bn geothermal exploration plan that will result in the sinking of 566 wells in the Great Rift Valley.

A government official told news agency Bloomberg that the country is planning to establish itself as one of the largest generators of geothermal energy over the next two decades.

The country is already Africa's largest producer of geothermal power, thanks to its position over shifting tectonic plates. Geothermal energy currently accounts for 12 per cent of Kenya's 1.4GW generation capacity, second only to hydro-electric power which supplies 55 per cent of the nation's electricity.

Over the next decade, the state-owned Geothermal Development Company aims to tap another 2.3GW of geothermal power as a response to droughts two years ago that limited the supply of hydro power.

By 2030, Kenya aims to have geothermal capacity totalling 5GW, and estimates it has a total potential of between 7GW and 10GW of geothermal power spread over 14 locations.

The company will begin drilling in Menengai in central Kenya this week, with an initial aim of finding sufficient reserves to power a 400MW facility by 2014, Silas Simiyu, chief executive of Geothermal Development, told reporters yesterday.

"We should not see a situation of power shortages like we had before," Simiyu said.

The Kenyan government has been encouraging foreign investment in order to facilitate technology transfer in the energy sector and has already allocated about 11bn Kenyan Shillings ($137.5m) in 2011 towards the development of geothermal power.

It has also introduced feed-in tariffs for wind power that have proved attractive to a number of overseas firms.

For example, Dutch firm LTWP is planning a 300MW wind farm in the north of the country, while earlier this month a consortium formed by Iberdrola Ingeniería and Gamesa was awarded a contract to build a 13.6MW wind farm in Kenya for €20m ($27m). Called Ngong II, the farm will have 16 Gamesa G52 turbines and will be financed with Spain's development aid fund.

Iberdrola Ingeniería has already carried out a project to automate hydro plants belonging to local utility KenGen and construct a control centre.

Gamesa has also said it is interested in developing geothermal projects in the country.