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Disclaimer:
Germany-Kenya Business Forum
27 September 2012, Hilton Hotel, Nairobi, Kenya
Eddy Njoroge, MD & CEO, KenGen
Overview of the Power Sub-Sector in
Kenya
1
Conclusion 4
OUTLINE:
Overview of KenGen and Available Opportunities 3
Overview of Germany and Kenya Power Sectors 2
Preamble – The World, Europe & Africa 1
2
1
Source: www.eia.gov
HIGHLIGHTS ON WORLD POWER GENERATION: 4,821 GIGAWATTS,
POPULATION 6,853 MILLION (2009)
North America
1,217 GW
Pn: 467m
Consumption per capita:
~13,000kWh
Africa
129 GW
Pn: 1,015m
Consumption per capita:
~500kWh
South America
250 GW
Pn: 480m
Consumption per capita:
~2,400kWh
Europe
943 GW
Pn: 606
Consumption per capita:
~4,000kWh
Eurasia
353 GW
Pn: 283
Consumption per capita:
~3,000kWh
Middle East
181 GW
Pn: 212
Consumption per capita:
~5,000kWh
Asia & Oceania
1,748 GW
Pn: 3,780
Consumption per capita:
~13,000kWh
3
• Major 5 countries - Egypt, Tunisia, Algeria, Libya, Morocco
(population ~ 170 million)
(electricity consumption
per capita ~ 1,120kWh)
HIGHLIGHTS ON AFRICA : ENERGY SECTOR…
Source: IEA, World Energy Outlook 2011 and AFREPEN Nairobi
North
Africa
Main Energy
Sources
Oil & Gas
129 GW
52 GW
South
Africa Coal, Oil & Gas 44 GW
• South Africa only
(population ~ 50 million)
(electricity consumption
per capita ~ 5,350kWh)
Sub-
Saharan
Africa Traditional
Biomass & Hydro
33 GW • >50 countries including
Islands
(population ~ 790 million)
(electricity consumption
per capita ~ 140kWh)
1
4
1
Source: http://en.wikipedia.org/wiki/List_of_African_countries_by_GDP_(PPP)_per_capita; * Includes only EU 27
REGIONAL MARKET : INDICATORS
EUROPEAN UNION (EU)
UNITED KINGDOM
FRANCE
BELGIUM
NETHERLANDS
PORTUGAL
SPAIN
GERMANY
IRELAND
ICELAND
NORWAY
SWEDEN
FINLAND
ESTONIA
LATIVA
LITHUANIA
BELARUS
UKRAINE
POLAND
CZECH SLOVAKIA
HUNGARY
ROMANIA
BULGARIA
GREECE
SWISS
ITALY
DENMARK
CROATIA
AUSTRIA
SLOVENIA
BOSNIA
SERBIA
FYROM
ALBANIA
MOLDOVA
- Member Countries 27
- Size 4.3m sq km
- Population 503m
- GDP $16trillion
- GDP per Capita $31,607
- Power Generation 833,000 MW1
EAST AFRICA COMMUNITY (EAC)
Kenya (40m)
Uganda (34m)
Rwanda (11m)
Burundi
(11m) Tanzania
(46m)
- Member Countries 5
- Size 1.8m sq km
- Population 142m
- GDP $ 0.15trillion
- GDP per Capita $1,200
- Power Generation 4,205 MW
5
Conclusion 4
OUTLINE:
Overview of KenGen and Available Opportunities 3
Overview of Germany and Kenya Power Sectors 2
Preamble – The World, Europe & Africa 1
6
KEY HIGHLIGHTS ON GERMANY & KENYA 2 Key Facts
Source: http://en.wikipedia.org/wiki/List_of_African_countries_by_GDP_(PPP)_per_capita; ERC, http://www.energy.eu/#domestic
Kenya
• Size ~ 582,000 km² -
• Electricity Access Rate ~ 22%
• Household Electricity Prices 21.2 US cents/kWh
• Has ~ 40 million people.
• Electricity Consumption p.a ~ 7,000GWh
• Consumption per capita ~ 170kWh/Yr
• Size ~ 357,021 km2
• Electricity Access Rate: ~ 100%
• Household Electricity Prices 27.81 US cents/kWh
• Has ~ 82 million people.
• Electricity Consumption p.a ~ 600,000GWh
• Consumption per capita ~ 7,400 kWh/YR Germany
7
INSTALLED CAPACITY : GERMANY and KENYA High dependence on hydro leads to use of temporary thermal power during times of dry hydrology…
Source: RWE, IEEJ : June 2012
2
National Installed (170,200 MW) National Installed (1,708MW)
51%
34%
13%
Germany Kenya
Includes 120MW
temporary thermal
power
Hydro (808MW)
Thermal (542 MW)
Geothermal(207MW)
Wind&Bagasse(31MW)
2012
51%
34%
13%
2%
Wind (27,200MW)
Solar (17,300MW)
Biomass (4,900MW)
Others (6,200MW)
2010
16%
10%
3% 4%
Nuclear (21,500MW) 13%
14% Gas (23,800MW)
Thermal (5,900MW) 3%
Brown Coal (22,700MW) 13%
Hydro (10,400MW) 6%
18% Hard Coal (30,200MW)
Includes
7.3MW
Geothermal
8
POWER SECTOR REFORMS KENYA
Ministry of Energy (MoE)
(responsible for policy matters)
ELECTRICITY (single-buyer model)
Energy Regulatory Commission(ERC) (responsible for regulating the entire energy sector)
Source: KenGen;
2
KPC (Transport)
KPRL (Refinery)
NOCK (Marketer)
Private
Marketers
PETROLEUM
KETRACO – Kenya Electricity Transmission Company Ltd REA – Rural Electrification Authoirity KPLC – Kenya Power & Lighting Company Ltd GDC – Geothermal Development Company Ltd IPPs – Independent Power Producers KPC – Kenya Pipeline Company Ltd KPRL – Kenya Petroleum Refinery Ltd NOCK – National Oil Company of Kenya
GDC (Geo-
Resource
Assess-
ment)
IPPs (Power
Gene-
ration)
KenGen (Power
Gene-
ration) KE-
TRACO ( New Trans-
mission)
REA
(Rural
Elec-
trification)
KPLC (Dis-
tribution &
Existing
Trans-
mission
Generation Transmission
& Distribution
KenGen have ~80% installed
capacity market share and
IPPs ~20%
Nuclear
Electricity
Project
(NEP)
9
2 KENYA POWER SUB-SECTOR TODAY (UNBUNDLED SINCE 1996)
Source: KenGen;
Transmission
& Distribution
Generation
Ministry of
Energy
(responsible for
policy matters)
Tsavo (74MW)
Rabai (89MW)
Orpower 4
(48MW)
IberaAfrica
(108MW)
Mumias (26MW)
Upcoming
• Turkana Wind
(300MW)
• Athi-River
(80MW)
• Others
thermals and
renewables…
RURAL
(9MW)
IPPs**
(347MW)
KenGen*
(1,232MW)
* - KenGen capacity excludes 120MW Emergency Power (manages Aggreko Temporary Power on behalf of Government of Kenya (GoK))
** - More Independent Power Producers (IPPs) expected in thermal, wind , solar and geothermal
*** - KPLC will retain the existing transmission network and remain a single buyer for sometime before further unbundling
**** - KETRACO is a 100% owned by GoK and will implement all new transmission lines (earmarked to be the Independent System Operator (ISO)).
***** - REA was established to accelerate rural electrification and works with KPLC in implementing the rural programme
Geothermal Development
Company(GDC) established in
2009 by GoK to accelerate
Geothermal Resource
Assessment and provide steam
for Power Generation
Energy
Regulatory
Commission
(ERC)
(responsible
for regulating
the power
sector)
REA*****
KETRACO
****
KPLC***
Customer
UETCL
(Imports)
EPP
(120MW)
10
2 IPPs IN KENYA
Source: KenGen;
Independent
Power
Producers
(IPPs) –
347MW
Rabai (89MW)
Tsavo (74MW)
Orpower 4 (48MW)
[Adding another 50MW]
IberaAfrica (108MW)
Mumias (26MW)
Upcoming • Turkana Wind (300MW)
• Thika – 80MW
• Athi-River (80MW)
• Others thermals and
renewables…
1997
1998
2001
2009
2009
11
Peak Demand (MW)
Source: Update of Kenya’s Least Cost Power Development Plan 2010-2030
Kenya has significant natural
power potential in form of:
(i) Geothermal(~ 10,000MW);
(ii) Hydro (~1,500MW);
(iii) Wind (~4,400 MW); and
(iv) Potentially Coal, Oil&Gas.
Vision 2030 ~
15,000MW
In 2018 Kenya must have at
least 30-35 % electricity
penetration to reach the
Vision 2030 target
Vision 2030 demand
Forecast of 8-10 %
PEAK DEMAND FORECAST TO MEET VISION 2030 ASPIRATIONS
1,482
3,141
4,659
8,226
12,141
17,764
1,278 2,038
3,474
6,768
10,097
15,066
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
Total Capacity (MW)
Peak Demand (MW)
2026/27 2018/19 2029/30 2023/24 2014/15 2009/10
2
12
Source: Update of Kenya’s Least Cost Power Development Plan 2010-2030
PROJECTED CAPACITY EXPANSION MIX
4,812
1,600
17,754
4,679
Total
Capacity
Hydro
263
Wind Imports
(Hydro)
2,200
Nuclear
4,200
Thermal
(Coal,
Gas & Oil)
Geo-
thermal
National Capacity Expansion (17,764MW) - 2030
3
Kenya has
signed the first
400MW
imports from
Ethiopia
Geothermal
to contribute
~ 30% of
power
requirements National
Electricity
Project (NEP)
established
to determine
viability of
nuclear in
Kenya
13
HIGH WIND POTENTIAL SITES 2
Wind Site Wind Speed-m/s
Jun-12 Jul-12 Aug-12 LTA
Isiolo-Mugae 10.45 10.63 10.77 7.86
Isiolo-Mweromalia 13.62 13.80 14.11 9.01
Isiolo-Kiremu 10.77 10.56 11.24 10.86
Isiolo-Matabiti 11.83 12.12 12.91 12.29
Bubisa West 13.24 13.60 13.88 10.90
Bubisa East 10.85 10.94 11.20 9.64
New Marsabit 9.86 9.61 10.33 9.50
Kinangop 5.99 3.99 6.02 6.97
Malindi 7.53 7.60 7.47 5.86
Marsabit
Isiolo
Malindi
Kinangop
Long-Term Average(LTA) over 36 months
14
HIGH SOLAR POTENTIAL SITES 2
PV Technology Sites
Garissa
Lamu
Malindi
Magadi
Gitaru
CSP Technology Sites
Lamu
Malindi
Magadi
15
HIGH GEOTHERMAL POTENTIAL SITES 2
Source: KenGen; TMO; BDS
GDC
Private
developers also
coming in to
prove the
resource in
various fields
KENGEN
3. Bogoria-Silali Block(3,000MW)
2. Menengai Block (1,600MW)
1. Olkaria Block (1,200MW)
(Currently developing 280MW)
>14 sites in Kenya
where geothermal
resource potential has
been confirmed
16
Up-front Investment; Institutional & Regulatory framework to tap
Geothermal 2
* - Local and Foreign financing to be used
Source: KenGen; TMO; BDS
Geothermal Development
Company (GDC)*
Geothermal Prospects
Bogoria Olkaria Menengai Paka Silali
Geothermal Resource
Exploration & Assessment
Government
meeting upfront
exploration and
drilling investment
KENGEN & IPPs
Kenya Power
(Off-Taker) Off-Taker 2 Off-Taker 3 ……
Power Purchase Agreement
17
PROJECTED GEOTHERMAL PROGRAMME TO 2012-2030 2
* - Local and Foreign financing to be used
Source: KenGen; TMO; BDS
MW
No. of drilled Wells
Rigs–Own
Rigs - Hired
700
150
15
3
1,400
250
15
-
2,340
550
15
-
5,000
1400
15
-
Next 3 yrs 8 yrs 13 yrs 18 yrs
2015 2020 2025 2030
• KenGen has acquired 3 drilling rigs and hiring 5 more
• GDC has acquired 4 drilling rigs
18 Source: KenGen;
ONGOING OLKARIA I&IV 280MW Project –
Commissioning Sept. 2014
2
19 Source: KenGen;
Geothermal Steam Drilling – [GoK, KenGen]
(June 2007- Aug 2012) 1
1 Kenya (GoK)
Cross-Continental Collaboration – both engineering and financing
~US$330m
Local
Infrastru
cture &
resettle-
ment of
PAPs [Lot D –
KenGen]
5
5 Kenya
(Local Companies) US$36m
Consul-
tancy &
Adminis-
tration [Lot Zero –
KfW,
KenGen]
2
2 New Zealand (SKM)
US$30m
Power
Plant
Cons-
truction [LotB1&B2
KfW, JICA,
AfD, EIB
KenGen]
6
6 S.Korea (Hyundai) &
Japan (Toshiba/
Toyota Tsusho)
US$382m
Sub-
station &
Trans-
mission [Lot C -
EIB,
KenGen]
4
4 India (KEC )
US$ 27m
Steam
Field
Develop-
ment [Lot A –
IDA, KfW,
KenGen]
3
3 China (Sinopec)
US$ 138m
Olkaria I&IV 280MW Geothermal
Project (June 2014)
Multi-financing (KenGen, GoK, EIB, AfD, KfW, JICA, IDA ~ US$ 1 billion) 7
Tariff ~ 7 Uscts/kWh. One of
the most competitive
renewable project in Kenya
Olkaria I&IV 280MW Geothermal Project – Multi-financed 2
20
Accelerating Geothermal through Portable Wellhead
Plants
2
Cooling towers
Condenser &
NCG Extraction
Generat
or &
Turbine
Steam Separator
Silencer
Wellhead
Generator &
Turbine
3
2
1
4
Video
21
2 Accelerating Geothermal through Portable Wellhead
Plants
22
2004
2005
2006
2007
2008
2004
2010
65
45
28
5
0
10
20
30
40
50
60
70
80
90
100
110
Hydro
Thermal
Geothermal
Wind
2018
18
49
2013
30
24
1
2009
22
13
1
… the target is a
green KenGen
by 2018 with
~50%
geothermal…
% share of generation modes
2018
2009
3,200MW 1,200MW
MOVING TO A GREEN ECONOMY 3
23
5.24
4.24
3.24
2.74
2.24
1.24
0.74
0.240.210.040.00
1.74
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
BENEFITS: TO GENERATE MORE TONNES OF CERs FROM
GEOTHERMAL
Cumulative Carbon Reductions - CERs
Million tonnes of CO2 equivalents
Possible sites
Assumptions; after 2012, grid emission factor 0.5 tonnes of CO2e per megawatt hour, Geothermal load factor 90% , *CERs Certified Emission
Reduction. CERs earnings begin 1 year after commissioning of power plants Source: KenGen
280 MW 2018
140 MW 2017 140 MW 2016
140 MW Olkaria 2012 140 MW Olkaria 2014 140 MW 2015
2.5 MW Eburu 2012
35 MW Olkaria 3rd unit 2010
Olkaria II 35MW 3rd Unit
first project to be
registered as a CDM
3
24
THANK YOU
25
DISCUSSION…
Kenya Germany
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