KenGen is spearheading a major expansion in Kenya’s renewable energy sector with a Sh32.2 billion investment in the Olkaria VII Geothermal Power Plant. This new facility, situated within the Olkaria geothermal field in Naivasha, is set to add 80.3 megawatts (MW) to the national grid.
The Olkaria VII project is a central component of KenGen’s strategy to enhance its renewable energy capacity by an impressive 3,000 MW over the next decade. Once operational, the new plant will increase KenGen’s geothermal capacity from 799 MW to 879.3 MW, moving the company closer to its target of 1,000 MW for the Olkaria zone.
According to KenGen’s regulatory filings, the plant will utilize steam to generate an estimated output of 80.3 MW. The project involves drilling 19 wells at a site located 220 meters from the southern boundary of Hell’s Gate National Park, following an evaluation of seven potential sites within the Olkaria field.
KenGen emphasizes that Olkaria VII will play a crucial role in stabilizing Kenya’s power supply and reducing reliance on costly thermal power sources, which are planned for phase-out by 2035. The company has warned that failing to proceed with this project could lead to a power deficit of 65 to 100 MW.
The environmental impact of the project is also significant. According to West Japan Engineering Consultants Inc., the Olkaria VII plant will reduce CO2 emissions by replacing electricity produced by fossil fuel-fired power plants. The project is projected to generate up to Sh3.77 billion annually in carbon credits.
KenGen currently earns carbon credits from six other power projects, including Olkaria IAU, Olkaria II, Olkaria IV, Tana, Kiambere, and Ngong. The investment in Olkaria VII, along with other geothermal initiatives, underscores KenGen’s role in advancing Kenya’s renewable energy goals.
In addition to Olkaria VII, KenGen is developing three other geothermal projects that will collectively add 326 MW to its geothermal output. These include the Olkaria I Rehabilitation (6 MW), Olkaria IV and IAU Uprating (40 MW), and the Olkaria Public-Private Partnership project (140 MW). These efforts will bring the total geothermal capacity in the Olkaria zone to nearly 1,000 MW.
KenGen’s revenue grew by 14% to Sh53.964 billion for the year ending June 2023. The company’s investment in new projects and upgrades reflects its commitment to increasing its generation capacity and solidifying its position in the energy sector
