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NEWS & CURRENT AFFAIRS

The Nairobian

Two firms begin construction of 70MW geothermal plants in Menengai

Business

By Macharia Kamau | Oct 28, 2024

**President William Ruto during groundbreaking ceremony for the 35MW Orpower 22 Geothermal Plant in Menengai, Nakuru county**. [PCS]

Two power producers have started the construction of electricity plants with a combined capacity of 70 megawatts (MW) at the Menengai geothermal fields that are set to start feeding the national electricity grid by the end of next year.

This will bring the total power production capacity from the Menengai fields to 105MW as well as the completion of the first phase of the project that has experienced major delays, having initially been slated for completion in 2016.

American firm Orpower 22 broke ground last week for the construction of a 35MW plant, an event that was attended by President William Ruto.

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The firm expects to spend $90 million (Sh11.7 billion) putting up the power plant in 14 months.

Earlier in June, UK’s Globeleq – the other firm developing another 35MW power plant – also broke ground and said it expects the plant to start feeding the grid by the end of 2025.

The first power plant was built by local firm Sosian Energy and started electricity production in 2023. The power plants are modular in design and can be scaled up in future.

Coming online of the two power plants is expected to push Kenya up in the global ranking of top producers of electricity using geothermal.

“The completion of the 105MW Menengai project will elevate Kenya’s global ranking to fifth overall, establishing beyond all contestation that economic growth and clean energy development can go hand in hand,” said President Ruto.

The country is currently the eighth largest geothermal power user with an installed capacity of 984MW.

Aside from Sosian that is producing power from Menengai, other players are Kenya Electricity Generating Company (KenGen), the largest with its fleet of geothermal power plants at Olkaria having an installed capacity of 799MW, as well as Orpower 22 which also produces power through geothermal at Olkaria and has an installed capacity of 150MW.
The Menengai fields were developed by the State-owned Geothermal Development Company, which is mandated with undertaking the capital-intensive work of exploration for geothermal steam and then developing viable fields by drilling production wells and building steam gathering systems.

In Menengai, after derisking the fields GDC competitively selected private firms to develop three power plants with a capacity of 35MW each.

This was in 2014 and the firms were expected to have the power plants completed by December 2016.

The three firms however experienced difficulties in accessing finances to advance the projects and it is only recently that they have been able to reach financial close. There have been concerns that delays would result in erosion of expected benefits, key among them the bringing down the cost of power.

Geothermal Power from Menengai costs about Sh8 per kilowatt hour compared to fossil fuel-generated power which costs Sh22 per kWh.

“The groundbreaking of the third power plant at Menengai geothermal project is a milestone for GDC and Kenya. It’s also an affirmation of the workability of our innovative paradigm of derisking geothermal fields and making them bankable for private investment,” said GDC Managing Director Paul Ngugi.

"The third power plant brings to completeness Phase I of the Menengai Geothermal Project which will generate 105MW of affordable, reliable and green energy."

AfDB in an update on the project on October 15 said the Menengai project is backed by a $198.4 million (Sh25.74 billion) investment from international partners, including the AfDB, which provided $120 million (Sh16.6 billion) in financing through its concessional lending window.

AfDB also mobilised additional funding from partners such as the Strategic Climate Fund, the Eastern and Southern African Trade and Development Bank, and the Finnish Fund for Industrial Cooperation.

The bank noted that once completed, the Menengai project would have a huge impact on the country's power sector.

“The Menengai geothermal facility will boast a total installed capacity of 105 megawatts, generating 1,000 gigawatt hours of electricity annually. Beneficiaries of the power will include 70,000 in rural areas, as well as 300,000 small businesses and industries,” said AfDB in the statement.

In addition to increasing the renewable energy generation capacity in the country, the Menengai geothermal project is expected to reduce greenhouse gas emissions by 1.95 million tonnes of carbon dioxide annually.

“The beauty of geothermal energy is that it is abundant in Kenya,” said Globeleq Managing Director Edouard Wenseleers, as quoted in the AfDB statement.

“This abundant, clean resource is supporting the economic and social development of one of East Africa's leading economies.”