February 16, 2015 / 3:13 PM / 4 years ago

Geothermal overtakes hydro as Kenya's main power source in January: KenGen

NAIROBI (Reuters) - A sharp rise in geothermal power production has reduced electricity costs and cut Kenya’s reliance on expensive diesel generators, the country’s main power producer KenGen said on Monday.

A worker walks at the Olkaria Geothermal power plant, near Naivasha, 145 km (90 miles) west of Kenya's capital Nairobi, April 2, 2011. REUTERS/Thomas Mukoya

KenGen completed the construction of the second phase of its geothermal plant last December, adding 280 megawatts (MW) to the grid and helping drive up geothermal’s share of Kenya’s power production in January to 51 percent from 19 percent a year ago.

Kenya was the first African country to tap geothermal power. It has potential to produce 7,000 MW and is targeting production of at least 5,000 MW by 2030.

Kenya’s current geothermal capacity is still behind that of hydro dams. However, poor rains have hindered hydro power production and the closure of some diesel generation plants has seen Kenya’s reliance on geothermal power increase.

“This generation has gone a long way to displacing heavy fuels and is obviously helping the economy in terms of saving of foreign exchange,” Albert Mugo, KenGen’s CEO, told a news conference.

Kenya has been relying on diesel generators in Nairobi and Mombasa to shore up supply from several hydro dams that have dominated power generation for decades.

Mugo said additional power from geothermal, which comes from wells drilled deep into the Rift Valley, would save the country 25 billion shillings ($273 million) required to run thermal power stations every year.

It has also cut the fuel premium on consumers’ monthly energy bills to 2.21 shillings per kilowatt hour (kWh), from a peak of 7.22 shillings last year, lowering total costs.

Overall, Kenya wants to halve electricity bills in the next three or four years from present levels of between $0.17 and $0.18 per kWh.

Diesel generation costs about $0.35 per kWh, while the cost of geothermal ranges from $0.08 to $0.09 per kWh, according to the government.

($1 = 91.4500 Kenyan shillings)

Reporting by Duncan Miriri; Editing by Liisa Tuhkanen

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