Kengen.Co.Ke Olkaria Geothermal Power Project, Naivasha, Kenya
Total Page:16
File Type:pdf, Size:1020Kb
Geothermal Exploration and development in Olkaria Cyrus Karingithi [email protected] [email protected] Olkaria Geothermal Power Project, Naivasha, Kenya Disclaimer: No part of this report may be circulated, quoted, or reproduced for distribution without prior written approval from KenGen. All the information contained herein was prepared for information to the German Parliamentarians visiting Kenya This image cannot currently be displayed. GEOTHERMAL POTENTIAL IN KENYA > 10,000MW in over 23 sites • Suswa, • Longonot, • Olkaria, • Eburru, • Menengai, • Arus-Bogoria, Menengai Block (1,600MW) • Lake Baringo, (Drilling Ongoing) • Korosi, 105 MWe tender • Paka, awarded to private • Lake Magadi, developers • Badlands, Olkaria Block(1,200MW) • Silali, (i)Installed 636 MW • Emuruangogolak, (ii) Developing 560MW (the first 140MWe • Namarunu Olkaria V advertised) • Barrier • Mwananyamala Private developers • Homa Hills already licensed at Olkaria, Akiira and • Nyambene Ridges Longonot fields • Chyulu Hills Source: TMO; Internet Sources; Argeo 1 OVERVIEW OF POWER SUB-SECTOR TODAY ~75% Market IberaAfrica Geothermal Development Share (108MW) Company(GDC) established in 2009 to accelerate Geothermal KenGen Orpower 4 Resource Assessment 1612 MW (127MW) EPP Rabai (89MW) (30MW) Generation IPPs Tsavo (74MW) (488MW) Mumias (26MW) Energy RURAL Ministry of Regulatory (9MW) Energy & Commission Thika (87MW) UETCL • Wind (510MW) Petroleum (ERC) • Thermal (responsible (Imports) Upcoming (responsible for (163MW) for regulating (938MW) • Geothermal policy matters) the energy (247MW) Kenya sector) • Biomass Power (18MW) Transmission KETRACO Customer & Distribution REA New Energy Bill being enacted to align the sector to the New Constitution… Source: KenGen; 2 GOVERNMENT AS A CO-FINANCIER OF GEOTHERMAL PROJECTS Expensive Least expensive Commercial Joint Ventures BOT/BOOT/ DFIs ( World Bank Capital Markets AfD, ADB,AfDB Government Banks & PPPs Concessions ,JICA, EIB, KfW DFIs SUPPORT – 210MW No resettlement needed All NEMA approvals granted Source: KenGen; www.centralbank.go.ke 3 NATIONAL PEAK DEMAND + Suppressed peak demand Peak Demand (MW) – approximately 8% growth 2347 2152 1,334 Up to 2005, KenGen could alone meet 1,221 1,210 national peak 1,188 1,200 demand 1,141 1,151 1,107 KenGen Effective 1,050 Capacity 1,010 1,001 916 983 972 940 912 912 912 867 870 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2016 Source: KenGen; Kenya Power 4 KENYA’S GEOTHERMAL JOURNEY FROM 1956 to DATE ~ 670MW of Steam 1981-85: Olkaria I – 45MW Available 283 1 commissioned 220 +117% 2003: Olkaria II – 70MW 2 commissioned Little activity for ~15yrs. 172 162 No funding for geothermal. 2010: Olkaria II 3rd Unit – 35MW 144 3 commissioned 128 103 114 106 99 100 101 94 96 87 91 79 67 59 46 50 41 36 31 27 21 24 15 9 11 3 4 7 2011 1956 1973 1974 1975 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1988 1990 1991 1992 1993 1994 1996 1997 1998 1999 2007 2008 2009 2010 2012 2013 2016 1 2 3 Source: KenGen 5 CURRENT TRUE PEAK DEMAND Required Capacity2,347 Current national installed capacity ≈ 30% Reserve Margin 536 2152MW Suppressed Peak Demand 343 …due to transmission and distribution system weaknesses… 1,811MW Current Peak … true peak … 1,468 2016 6 GOVERNMENT TARGET ON TARIFF EVOLUTION WITH NEW CAPACITY THAT WILL DISPLACE FUEL COMPONENT: 8000 Cumulative MW 25 Industrial/Commercial Tariff (US$cts/kWh) Domestic Tariff Progression (US$cts/kWh) 7000 6762 19.78 20 6000 17.73 5017 47% reduction on Domestic tariff 5000 14.14 13.46 15 12.49 4000 11.03 11.19 10.43 9.03 3000 10 2342 9 2000 1664 37% reduction on 5 Cumulative Capacity Cumulative Installed Industrial tariff Progression Tariff 1000 0 0 0 6 12 18 24 30 36 40 Source:MoEP 7 POWER DEMAND DRIVERS BY YEAR 2016/17 MW Iron & Steel 2,000 Smelting Industry • Economic activities in counties Standard Gauge 1,171 • Mining and Process and Light Rail industries • Irrigation ICT Parks 675 • Electrification of Rail; • Powering resort cities Lapsset 350 and new economic zones. Total 4,196 Source: Ministry of Energy, Sector LCPDP Plan 2011-2030 8 40-MONTH GOVERNMENT 5000+MW STRATEGY NEW CAPACITY ADDITIONS (MW) TIME IN MONTHS 6 12 18 24 30 36 40 TOTAL Hydro 24 - - - - - - 24 Thermal 87 163 - - - - - 250 Geothermal 90 176 190 50 205 150 785 1,646 Wind - - 20 60 300 250 - 630 Coal - - - - 960 - 960 1,920 LNG - - - 700 350 - - 1,050 Co-Generation - - 18 - - - - 18 Total 201 339 228 810 1,815 400 1,745 Cumulative Additions 201 540 768 1,578 3,393 3,793 5,538 61% is Renewable Capacity and KenGen is a key player in this 9 strategy… 9 KENGEN: THE LEADING POWER GENERATOR IN KENYA • In our 61st Anniversary; • 70% Government-owned • ~75% market share of Installed Capacity • A member of Nairobi Securities Exchange since 2006 • ~ 1,612 MW (~ 49 % Hydro); • ~ 2,800 Staff Compliment; • ~ US$ 3.40 billion Asset Base; • ~ US$ 310 million Annual Turnover; • An ISO 9001:2008 & ISO 14001:2004 Company Source: TMO; 10 OUR GENERATION PORTFOLIO Generation Portfolio (MW) Generation Portfolio (%) – excludes TTP* 1651 1,6% 26 100% 30 Wind 517 Geothermal 31.3% 258 Thermal 17.4% 820 Predominantly Hydro that makes power more expensive during dry Hydro 49.7% hydrology Hydro Thermal Geo- TTP Wind Total 2016 thermal TTP* - Temporary Thermal Power 11 A GREEN KENGEN WITH GEOTHERMAL BASE-LOAD CAPACITY Generation Mix Movement 110 1,182MW 1,643MW 3,289 MW 100 1 2018 1.6 5 Wind 13 90 2010 31.3 80 22 2009 2004 70 49 Geothermal • A green 2008 17.4 60 KenGen by 2018 with 50 2007 ~50% of installed 40 Thermal 2006 18 portfolio from 65 30 geothermal… 49.7 2005 20 • Carbon credits will also boost 28 Hydro 2004 10 revenues 0 2003 2010 2016 2019 12 OUR STRATEGY TO 2018 KenGen Today ~ 1,405MW Horizon 1 Horizon 2 Horizon 3 Great (2008-2012) (2013-2018) Beyond 2018 company 10 yrs+ 5-10 yrs Explore expansion opportunities Next 5 yrs • Drive expansion beyond Kenya While Create sustainable stabilizing Stabilise situation power growth in • Establish a strong African supply, in Kenya Kenya footprint KenGen must prepare for • Deliver optimal future • Leader in technology and sustainable • Improve efficiency to boost supply projects on time and innovation growth in budget (e.g., geothermal, • Deliver ongoing future wind) projects timely • Manage peak demand • Grow supply ahead of and emergency power demand to establish reserve margin Good • Prioritise and kick-start future projects • Optimise project portfolio company Time Capacity addition ~500MW >1,500MW Year 2030 ~9,000MW Total Capacity KenGen 2007 (918MW) ~1,500MW ~3,000MW Source:TMO 13 OUR GROWTH STRATEGY Targeting 980 MW …estimated additional geothermal 3331 capital by 2024 outlay ~ US$ 5bln… 600 … ~50MW early leasing generation 350 on tender… 140 2101 140 100 140 140 1651 70 70 280 1,239 20 MW Coal - Olkaria 8 Olkaria Olkaria 7 Olkaria Olkaria V Olkaria Olkaria VI Olkaria Wellheads Wellheads 2019 Meru Wind Meru 2013 2016 Olkaria IU6 Olkaria Olkaria I&IV Olkaria Ngong Wind Ngong Total 2024 Total Source: TMO; BDS Division 14 COMMITTED GEOTHERMAL PROGRAMME Capacity Estimated Comm year Status No. Plant (MW) Cost MUSD Olkaria IV unit 2014 Commissioned 150 491 1 1&2 Olkaria I unit 2014 Commissioned 150 491 2 4&5 2015 Construction in 70 130 3 Wellhead progress (67MW Commissioned) 4 Olkaria I Unit 6 Construction to 70 194 2016 start 2016 2019 Construction to 140 491 5 Olkaria V start 2016 2019 Drilling & JV 140 491 6 Olkaria VI Partner/Financing Sub-Total 700 2,165 15 OLKARIA I&IV 280MW PROJECT: Utilizing a Cross-Continental Collaboration both engineering and financing Tariff ~ 7 Uscts/kWh. One of the most competitive renewable project in Kenya Olkaria I&IV 280MW Geothermal 1 Kenya (GoK) Project (September 2014) Multi-financing (KenGen, GoK, EIB, AfD, KfW, JICA, IDA ~ US$ 1 billion) 7 2 New Zealand (SKM) Steam Sub- Consul- Local Power 3 China (Sinopec) Field station & Plant tancy & Infrastru Develop- Trans- Cons- Adminis- cture & ment mission truction tration RAP 4 [Lot A – [Lot C - [LotB1&B2 [Lot Zero – [Lot D – India (KEC ) IDA, KfW, EIB, KfW, JICA, KfW, IDA, KenGen] KenGen] AfD, EIB KenGen] KenGen] KenGen] US$ 138m US$ 27m US$30m 5 Kenya US$382m US$36m (Local Companies) 3 4 6 2 5 6 S.Korea (Hyundai) & Geothermal Steam Drilling –[GoK, KenGen] Japan (Toshiba/ (June 2007- Aug 2012)~US$330m 1 Toyota Tsusho) Source: KenGen; 16 Olkaria IV: 150MW – Commissioned 17 Olkaria I UNIT 4 & 5: 150MW – Commissioned 18 New Discoveries: 30 MW Well (among the largest Geothermal Wells in the World) Direct Cash Savings by Striking one 30MW Well USD 35 Million! Source: KenGen; TMO; BDS 19 GEOTHERMAL STAKEHOLDER MANAGEMENT • Creating mechanisms to deal Stakeholder with local community issues Management • Environmental & Social Impact Management • Dealing with regulatory authorities and government institutions Source: KenGen; 20 KenGen/PARK INTERACTION • Hells Gate National park since 1984 • KWS-MoU since 1994 • ESIAs always undertaken • Mitigation measures implemented continuously Meeting between Consultants, KenGen and KWS Loops on animals routes 21 STAKEHOLDER MANAGEMENT 1. Elaborate Resettlement Action Plan (RAP) and all inclusive Stakeholder Committees 2. Education 3. Health 4. Water 5. Transport 6. Roads 7. Environmental conservation Built Schools 22 STAKEHOLDER MANAGEMENT Stakeholder Coordination Committee RAPIC - Operates Independently RAP Economic Environmental Employee Sub- Implementation Benefits Management Committee Committee Committee Committee 23 TRANSFORMING LIVES 24 TRANSFORMING LIVES 25 TRANSFORMING LIVES Old School 26 TRANSFORMING LIVES New School 27 KENGEN OLKARIA GEOTHERMAL SPA 28 THE ONGOING WELLHEAD 70MW PROJECT… Wellhead Generation 29 OUR INNOVATION IN GEOTHERMAL Directional Drilling • This reduces drilling cost by optimizing time, civil and rig-move expenses. Source:KenGen, TMO 30 PROPOSED KenGen INDUSTRIAL PARK 31 This image cannot currently be displayed.