Kenya to offer geothermal drilling incentive to drive development

Alexander Richter 23 Kas 2009

The Kenyan Government will offer incentives to private sector players venturing into geothermal power generation, helping to decrease risk of drilling.

Reported from Africa, “The (Kenyan) Government will offer incentives to private sector players venturing into geothermal power generation to reduce the country’s over reliance on hydroelectric power.

Another incentive that is expected to attract the private sector is lowering risks associated with drilling of geothermal wells.

“We are reducing exploration costs and investment risks to attract companies that would want to take part in developing local capacity in alternative energy,” Energy Minister Kiraitu Murungi said on Monday.

The recently set up Geothermal Development Company (GDC) will drill wells and absorb some of costs that would be incurred by private companies.

Drilling equipment

The cost of sinking one geothermal well is estimated at more than $6 million (Sh450 million), which is in addition to the acquisition or hiring of drilling equipment and the risk of the well being barren.

Murungi spoke during a green energy conference in Nairobi.

PM Raila Odinga urged the private sector to invest in alternative power generation because the projects have high returns despite high initial investment.

“Private investors have been reluctant to engage in development of geothermal fields.

They say it is too risky. But the fact is that more than 90 per cent of the wells we have drilled, we hit steam in sufficient quantity and in high enough temperature,” he said.

Kenya has an installed power capacity of 1,300 mega watts (MW) and plans to increase this by another 2,000 MW by 2012 to meet increased power demand.

Geothermal power generation offers an alternative to hydroelectric power, with the country having a capacity of 7,000 MW, much of which is yet to exploited.”

Source: The Standard