The Geothermal Development Company (GDC) has acquired seven drilling rigs worth Sh18 billion in a move expected to cut drilling cost.
Previously, the company used to hire rigs. GDC Managing Director Silas Simiyu said the acquisition would save the country billions of shillings annually.
He announced plans to pump an extra 110mw into the national grid by December next year. The addition of the geothermal power from Menengai will see the country save an extra Sh42 billion after switching off the diesel powered power plants.
Dr Simiyu said three Independent Power Producers (IPPs), Sosian energy, Quontum East Africa and Orpower 22 will generate a combined 110mw from the Menengai geothermal sites in Nakuru County.
He said the companies will get steam from wells generated by GDC and will construct power plants with each doing 35mw.
READ MORE
Besides providing comic relief, hilarious memes have a dark side
Lawyers demand arrest of KPLC staff over alleged fuel theft
American power struggles mean little for Kenya's real challenges
Worry as peak power demand vs installed capacity gap shrinks
drilling expenses
"We are on course because the three companies have already started drilling," he said.
Simiyu attributed the delay in awarding the tenders to the three IPPs to a structured Power Purchased Agreement that is one of its kind in the region.
He said the agreement will see the IPPs purchase steam from GDC and generate electricity and will sell to Kenya Power for 25 years.
"This is a different kind of setting where GDC staff will identify and drill wells which in turn will be sold to power producers at an agreed fee," he said.
He said that the new model will help fast track energy generation and achieve the 5,000mw in line with the jubilee manifesto.
As a result, the cost of power generation will be reduced by 50 per cent as the taxpayers will only be required to foot the expenses of drilling the wells. Simiyu was speaking when he handed over geothermal wells to the IPPs for power plant construction.
GDC Chairman Faisal Abass said the three companies were selected through a rigorous and competitive tendering process that took one year. Abass noted that the IPPs will build, operate and own the first three power plants in Menengai.
