Development of Geothermal Resources in Kenya

Transcription

1 of Geothermal Resources in Kenya Power Sector Overview steam resource Dr. Silas M. Simiyu Managing Director & CEO Geothermal Company Ltd May 18, 2011 Ministry of Energy ERC IPPs KenGen Importss KETRACO Transmission /Wholesale Market operator REA Energy Tribunal KPLC Distribution/Supply Customers The Geothermal Company Geothermal in Electricity Mix Isolated minigrids (Fossil) 18 Incorporated in 2008 to accelerate of resources in Kenya by reducing upfront risks to investors Thermal (Fossil); 525; 34% 1% Large Hydro ; 749,2; 49% Geothermal; 198; 13% Wind; 5,1; 0% Co-generation (biomass); 26; 2% Small Hydro; 15,3; 1% 4 1

2 Projected Electricity Demand Mission & Vision Vision: To be a world leader in the of resources Mission: To develop 5,000 MW by 2030 Core Activities Least Cost Power Plan (LCPDP) Electricity demand of about 15,000 MW by 2030 is projected. At least 5,000 MW of electricity will come from 5 Resource prospecting Drilling (all stages) Field Reservoir and management Contracting for power plant Geothermal Power Direct Use Greenhouse Heating Heating of greenhouses for cut roses ~160 hectares Extraction of CO 2 & H 2 S Injection of CO 2 to aid in photosynthesis Fumigation of soils and sterilization of liquid recycled plant fertilizers using H 2 S Water Recovery Potable water Irrigation Industrial Applications Heating and drying Industrial processes 2

3 Abundant and indigenous Why Geothermal? Suswa, Longonot, Olkaria, Eburru, Menengai, Arus-Bogoria, Lake Baringo, Korosi, Paka, Lake Magadi, Badlands, Silali, Emuruangogolak, Namarunu Barrier Mwananyamala Homa Hills 9 Low Cost Other advantages of Geothermal Assessment criteria Generation Low cost Option US$c/kwh Availability Fast delivery* Geothermal Wind 8.8 Nuclear Gas CNG Coal MSD 10.2 Hydro** 12.5 Environment friendly Location and Natural transmission potential benefit?? Comments Significant proven potential Significant potential, but dependent on weather Min plant size of 500 MW required, politically sensitive Need to import, liquify for transport and re-gas Coal potential in Kitui Attractive intermediate capacity, but not large base load High exposure to hydrology risk (60% of installed capacity) Green Not affected by adverse weather 95% Availability Predictable cost of power over the plant life Technology already successful in Kenya Modular incremental Gas Kerosene 16.5 Current GTs running at high loads, need more base load Solar 30-50? Dependent on weather with low average availability Co-generation tbd?? Could pursue along side coal opportunity 11 * Based on construction time additional time would be needed for feasibility and other pre-construction activities ** 6US cents/kwh based on importing hydro power from Ethiopia vs. 12 US cents/kwh based on remaining projects in Kenya, e.g. Mutonga *** Lower than 10 cents/kwh, greater than 80% availability, less than 3 years, lower than 0.20 CO2 kg/kwh and known natural potentia 3

4 Mandate Upfront Works Reduce upfront risks Reduce costs through infrastructural, exploration works and production drilling Direct Use Capacity Promote Direct Use of resources Develop human capacity Manage public resources such as rigs Strategies Funding Support Government in fund mobilization Power Plant Support Private Sector entry Sell steam to power producers Single GoK Entity Approach Olkaria III Concessioning Two Exploratory wells drilled to a depth of ~950m Wells never discharged and later abandoned GoK & UNDP entered into an agreement to extensively undertake resource assessment Decision was to concentrate at Olkaria (80km2) after positive well results. Six wells were drilled with positive results. Drilling was accelerated and about 23 wells were drilled 45 MW (Olkaria I) commission ed between Most financing was from World Bank Drilling continued in Olkaria II Steam field ~ 30 wells by 1992 From 1992, financiers pulled out and no major works undertaken until 1999 Olkaria II 70MW commissione d in Drilling ongoing Olkaria IV 140MW planned for Olkaria III concession for 100 MW Jul MW Com. Dec MW Mar MW The first 13 MW developed from wells drilled by Government Sep MW MW MW 4

5 Concessioning Suswa Longonot IPP license given in 2009 Targets to develop max of 140 MW on a 700 MW Prospect Observation Under utilization of the resource Slow pace 2007 Suswa (>600 MW) concessioned to IPP Observation Growth relatively slow, expected pace not realized Strategy Strategy Surface Exploration Exploration and Appraisal drilling Reduce Energy Cost > Use own rigs > Wellhead generation Reduce Time > Develop all prospects > Competitive bidding Private Entity Feasibility Study Production & of Steam Supply Sale of Steam Construction and Operation of Power Plant Investment by Private entity/kengen Promote Direct Use > Avail steam for heating > Avail water > Industrial uses Accelerate Sustainable > Manage the steam field 20 > Optimize the resource 5

6 CHALLENGES CHALLENGE ISSUES SOLUTION Financial Social & Environmental Availability of drilling water Accelerated entails large upfront financial input Land, local politics, competition for resources Land, local politics, competition for resources GoK annual support of US$150 million to generate internal revenue from steam sales to support the GoK budget Identify and consider alternative sources of financing Community engagement at all stages of Demand for royalty payments? Use boreholes as source of water Use brine and recycle 100% CHALLENGES CHALLENGE ISSUES SOLUTION Inadequate infrastructure Human Capacity Building Geothermal operations occur mainly in remote locations away from developed infrastructure Geothermal industry requires specialized skills not readily available - started operations in accessible areas and will need heavy infrastructural investment to open up other remote areas -Incremental and feed into distribution network -Power evacuation from remote sites On-the-Job training Short term Consultancy Services to bridge gap Geothermal Training Institute to train staff Partnerships with leading institutions THANK YOU 6