35 mw olkaria ii geothermal expansion project

35 MW OLKARIA GEOTHERMAL EXPANSION PROJECTUNFCCC CDM Sustainable Development Tool

The 7th Africa Carbon Forum, Marrakech Morocco 13th -15th April 2015

KENYA ELECTRICITY GENERATING COMPANY LTDPacifica F. Achieng [email protected]

THE WORLD BANK GROUPPatricia Marcos Huidobro

[email protected] Boukerche

[email protected]

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OUTLINE:

• SECTION 1 : INTRODUCTION1

• SECTION 2: SUSTAINABLE DEVELOPMENT INDICATORS2

• CONCLUSION, RECOMMENDATIONS AND ACKNOWLEDGEMENT3

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35 MW OLKARIA II GEOTHERMAL EXPANSION PROJECT

• Located with the Hells Gate National Park in Naivasha District, in Kenya’s rift valley.

• Owned and operated by Kenya Electricity Generating Company Ltd (KenGen).

• First two 35 MW units (70 MW) were commissioned in 2003.

• A third unit of 35 MW capacity was commissioned in 2010 (formed the CDM project)

• Total capacity to date 105 MW

Background information

Unit 3 turbine

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•CDM Registered December 2010, with 7 year crediting period twice renewable

•Estimated PDD ERs were revised from149,630 tCO2e/year to 143,842 in 2014

•Project is delivering CERs: 1st Monitoring period 152,000 tCO2e (issued); 2nd Monitoring period 80,000 tCO2e (Issued)

•3rd monitoring period verified 76,000 tCO2e;

• 4th monitoring period in progress.

35 MW Olkaria II Geothermal Expansion CDM Project

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• CERs are sold to the Community Development Carbon Fund (CDCF) of the World Bank.

• As per the ERPA, part of the carbon revenue goes to the local community (1 $/ tCO2e).

• A Community Benefits Plan (CBP) was designed in consultation with the local community.

• Benefits include new classrooms, better water access and local employment.

• US$ 225,000 allocated to CBP to date. CDCF ERPA ends after 4th issuance.

35 MW Olkaria II Geothermal Expansion CDM Project

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OUTLINE:




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Sustainable development co-benefits voluntary tool for CDM project

activities and programmes of activities

• Contribution to sustainable development is one of the two objectives of the CDM.

• Voluntary tool aims to appraise the sustainable development impact of the Kyoto Protocol’s clean development mechanism (CDM)

• Takes a checklist approach

• Menu of generic dimension, criteria and indicators

• 3 main sections i.e. introduction, sustainable development co-benefits and third party assessment contact information

• Scored as (highly, partly, slightly, N/A)

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RESULTS OF ENVIRONMENT INDICATORS: ENVIRONMENT (AIR, WATER & NATURAL RESOURCES)

Environment Air• Reducing level/frequency/time of SOx (sulphur oxides) emissions? (Partly)

– The additional renewable geothermal power helps to offset SOx emissions that would otherwise be produced by thermal, fossil fuel power plants

• Reducing level/frequency/time of NOx (nitrous oxides) emissions?

– The additional renewable geothermal power helps to offset NOx emissions that would otherwise be produced by thermal, fossil fuel power plants (Partly)

Environment Natural resources• Mineral resources (slightly)

– The project provided additional 276 GW per year of renewable electricity to the national grid, thereby substituting away from electricity that would otherwise have been generated by thermal power plants.

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RESULTS OF ENVIRONMENT INDICATORS: ENVIRONMENT (AIR, WATER & NATURAL RESOURCES)

Environment water• Reliable and accessible water supply though

improved or new distribution? (Highly)

– construction of a water pan which has benefited approximately 7,000 livestock and 1,500 people in the area surrounding the project, shortening the distance to access water;

– construction of a 10 km water pipeline to provide water to one of the poorest communities near the project site.

– Impact: helped local people reduce the time and physical strain dedicated to collecting water, benefiting women and children in particular.

Water pan

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RESULTS OF SOCIAL INDICATORS: (EMPLOYMENT, EDUCATION & WELFARE)

Social –employment • New long-term jobs (> 1 year) (partly)

– About 50 additional permanent skilled jobs created thanks to the expansion of the Olkaria II, unit 3 geothermal Plant.

• New short-term jobs (< 1 year) (highly)– 100 labour jobs created during the construction of

Olkaria II Geothermal Project.– 216 jobs created during the implementation of the 4

Community benefit projects

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RESULTS OF SOCIAL INDICATORS: (EMPLOYMENT, EDUCATION & WELFARE)

Social – Education• Enhanced educational services (schools,

teachers, affordability, quality etc.) (highly)– Construction and equipping of 3 classrooms for

nursery school and construction and equipping 3 classrooms for a primary school under community benefit fund of the project.

• Project related knowledge dissemination (project related site visits and tours etc.)

• The project is recognized internationally as a knowledge center for geothermal development in the Africa region and visited by schools, universities and field experts (slightly)

• Other educational benefits (slightly)– Capacity building on sustainability during the

construction of the 10 km pipeline and other CBP projects

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Classrooms

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RESULTS OF SOCIAL INDICATORS: WELFARE

Social – Social Welfare

• Community or rural advancement (highly)– Providing improved access to water for livestock and people; – Expanding the local primary and nursery schools and;– Repairing and upgrading the local road network that facilitates access to local markets and other basic

goods and services.– Approximately 5,000 local people benefit from the improved road network.

• Empowerment of women (e.g. optimize tasks undertaken by women) (slightly)

– The construction and rehabilitation of local roads, a water pan, and water pipeline has helped local people reduce the distance, time and physical strain dedicated to collecting water, benefiting women and children in particular.

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RESULTS OF ECONOMIC GROWTH INDICATORS

Economic – Infrastructure• Establishment and maintenance of new infrastructure (highly)

– Excavation and construction of a water pan watering around 7,000 livestock and 1,500 people– Installation of a 10 km water pipeline from the Mpya water tank to Maiella (HQ). – Construction of three new classrooms at existing primary school.– Construction of additional 3 new classrooms at existing nursery school

Economic – Energy • Improved coverage/availability of supply of energy (e.g. distribution, hours of the day)

(highly) – The Olkaria II geothermal expansion project supplies an additional 35MW of renewable electricity to the Kenyan

grid.

Economic – Technology transfer (diffusion of technology) (highly)• The Olkaria II unit 3 geothermal expansion project has demonstrated technology transfer as the first project to apply

Geothermal technology for reinjection, automatic monitoring of H2S, gas ejection system, new cooling tower system in Kenya.

Economic – Balance of payments• Reduction of the dependency on foreign sources of energy (highly)

– helps to substitute away from thermal generated electricity, thereby decreasing Kenya's dependence on imported crude oil and imported emergency diesel generators.

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OUTLINE:




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SUMMARY INDICATORS SCORE

ENVIRONMENT Reducing level/frequency/time of SOx (sulphur oxides) emissions? Partly

Reducing level/frequency/time of NOx (nitrous oxides) emissions? Partly

Mineral resources Slightly

SOCIAL New long-term jobs (> 1 year) Partly

New short-term jobs (< 1 year) Highly

Enhanced educational services (schools, teachers, affordability, quality etc.) Highly

Project related knowledge dissemination (project related site visits and tours etc.)

Slightly

Other educational benefits Slightly

Community or rural advancement Empowerment of women

HighlySlightly

ECONOMICS Establishment and maintenance of new infrastructure Highly

Improved coverage/availability of supply of energy (e.g. distribution, hours of the day)

Highly

Technology transfer (diffusion of technology) highly

Reduction of the dependency on foreign sources of energy highly

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CONCLUSION, RECOMMEDATIONS AND ACKNOWLEDGEMENT

• The scope of CDM SD tool is adequate but should be used with sector specific and indicators e.g. for energy

• Sustainability scores should be put on a scale of 1 to 5 and weighted at the end of the tool instead of relative terms such “highly”, “slightly”

• Existing indicators such as WHO, MDGs etc can be used to measure social aspects of sustainability in the CDM SD tool.

• A test of the tool with 35MW geothermal CDM project shows– Economic indicators: High sustainability in all economic indicators– Social indicators: More social benefits with varied impacts.– Environment Indicators: Fewer environmental impacts with partial and slight gains.

• The tool was simply to use however difficult to determine the significance of an impact. The same impacts can scored differently by other users based on their judgement.

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RECOMMENDATIONS

• Co-benefits shall be only attributable to the CDM project.

• This assessment excluded community CSR projects that were done through the entire Olkaria II 105 MW (According to KenGen CSR policy, 1% of net revenue goes to surrounding community on an annual basis).

• The SD tool shall be updated periodically, in order to reflect new developments or activities conducted under the CDM project (for instance in the case of Olkaria II, and thanks to CDCF ERPA, the more ERs are achieved the more benefits the nearby communities will get).

• The SD Tool submission date shall be clearly stated in the template.

• Ran down audits by a third party should be conducted to a sample of projects in order to ensure SD Tool's veracity/reliability.

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ACKNOWLEDGEMENT

KENYA ELECTRICITY GENERATING COMPANY LTDPacifica F. Achieng [email protected]

THE WORLD BANK GROUPPatricia Marcos Huidobro

[email protected] Boukerche

[email protected]

THANK YOU

35 mw olkaria ii geothermal expansion project

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