Orpower bags Sh12bn for 35MW well – Business Daily
A geothermal well at the floor of Menengai Crater. PHOTO | NMG
New York-based power firm Orpower 22 has secured Sh11.97 billion ($97 million) to drill a 35 megawatt (MW) geothermal well in Menengai Crater, boosting Kenya’s efforts to fully transition to clean energy and lowering the cost of electricity.
Orpower 22 is the special purpose company for Symbion Power LLC and will drill and develop the steam well over a 25-year power purchase deal with the government.
Symbion Power did not disclose when the drilling will start for the project that upon completion will significantly boost Kenya’s efforts of a 100 per cent transition to clean energy in a bid to provide cheap electricity besides protecting the environment from the pollution of the thermal power plants.
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Ramping up the use of clean energy is critical to helping Kenya lower the cost of electricity by eliminating the fuel cost charge that thermal power plants charge for supporting the grid especially at peak demand or during low hydro-production due to drought.
“Symbion Power will also build and operate a $97 million 35 MW geothermal power plant in the Menengai Volcanic Crater in Kenya’s Great Rift Valley, under a 25-year Power Purchase Agreement signed with Kenya Power and Lighting Company and a Steam Supply Agreement signed with the
Geothermal Development Company,” the firm says. The disclosures follow the completion of the US-Kenya trade talks that were held in Washington DC early this month.
Kenya has been grappling with high power bills mainly because of the fuel cost charge— the money that Kenya Power collects from consumers on behalf of the thermal power generators.
The charge significantly rises when fuel prices go up and when the amount of oil consumed by the generators increases.
Increased use of electricity from fuel generators hits consumers with high power bills due to the high cost of fuel, underscoring why cutting reliance on thermal plants is key to lowering the cost of electricity.
For example, Kenya Power disclosed that the uptake of electricity from thermal energy plants jumped from 876-gigawatt hours (GWh) to 1,539 GWh in the 2021/22 financial year.
Currently, an estimated 80 per cent of Kenya’s electricity is from clean sources mainly geothermal and wind and has set the ambitious target of a 100 per cent transition to clean energy by 2028.
President William Ruto last month disclosed the ambitious target at the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) in Egypt.
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Orpower 22 is one of the independent power firms besides Quantum Power and local firm Sosian Energy picked by Geothermal Development Company (GDC) to build a 35-megawatt steam power plant under a build–own–operate model.
GDC entered into project implementation and steam supply agreements with the three Independent Power Producers on November 1, 2014.
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