When Kenya opened the Olkaria power plant four decades ago, it was more of a research project than a commercial one. Because of its location in Hills Gate National Park, an arid region of volcanic rock punctuated by sulfur gases and inhabited mostly by pigs and zebras, the facility was able to generate electricity using steam from deep within the earth. Untested and expensive geothermal energy was an experimental technology at best, with the first unit expected to power about 10,000 homes. Today, the Olkaria plant generates more than 50 times that, and the technology is going to make up the strength of the country’s electricity grid. “Our future strategy is geothermal energy,” says Rebecca Miano, chief executive of the state-owned Kenya Electricity Generating Company, or KenGen.
For decades, Kenya and its neighbors have focused on hydroelectric power and fossil-fueled thermal plants, but only recently have they awakened to the potential of their vast underground energy resources. The area lies on the side of the Great Rift Valley, an area where tectonic plates gather, bringing the magma underground closer to the surface. It is one of the most active volcanic regions in the world, with Mount Kilimanjaro in the middle, in addition to dozens of hot springs that indicate the intense heat directly below. According to economic research firm Fitch Solutions, Kenya gets nearly half of its electricity from geothermal power plants, more than any other country, and is on track to increase that rate to nearly three-fifths of its electricity. electricity by 2030.
The Olkaria geothermal power plant, the first of its kind in Africa, feeds tubes that extend two miles deep into the Earth’s crust. The deep tubes deliver high-pressure steam up to 350°C (662°F), which is used to drive giant turbines. Ken Jin plans to invest $2 billion over the next five years in the construction of four new plants and upgrades to the Olkaria plant, which will increase Kenya’s geothermal capacity to more than 1.6 gigawatts, nearly double the current production, which is Enough to supply electricity to a city of one million people. In the long term, the Kenya Electric Corporation expects the country to be able to generate at least six times that amount.
The biggest hurdle, in Kenya and the region, has always been the initial investment. While turbines and other equipment used above ground cost roughly $3 million per megawatt, the real cost lies underground, with a single well costing up to $6 million. The construction of each unit usually entails multiple drilling attempts to find enough steam to keep the turbines spinning. For the first plant in Olkaria, the Kenya Electricity Generating Company has drilled 33 wells. “Initially, geothermal plants were seen as too risky and the high initial cost was a drag,” says Peter Omanda, a consultant who has worked on several projects in the region. While technological advances have reduced costs and made it easier to get more steam from each well, the cost of drilling remains a significant obstacle.
Drilling wells and selling steam
To help offset costs, in 2008 Kenya established the state-owned Geothermal Development Corporation, known as GDC. This company aims to assume the investment risks associated with this technology, by drilling wells similar to oil drilling companies. And when it finds a promising field, it sells the steam to Ken Gene or other companies that build above-ground facilities. GDC has raised $746 million, mostly from international lenders such as the World Bank, to develop the volcanic Menengai Crater, 60 miles north of Olkaria, where three independent power producers expect to open geothermal plants in 2023 after years of delay.