Kenya opened up an enormous geothermal power plant in February 2015 – by some measures it is the largest in the world.⁽²⁾ Experts estimate that the new 280 mega-watt Olkaria IV plant is increasing geothermal power’s share of total electricity production in Kenya to 35 or even 50%.⁽³⁾ Kenya built Africa’s first geothermal power plant in 1981 – the much smaller 45 mega-watt Olkaria I – but the new US$ 1.3 billion plant represents a significant leap forward in Kenya’s energy portfolio.⁽⁴⁾

The continuing rise of geothermal power production in the Olkaria region of the Great Rift Valley in Kenya calls for an examination of geothermal science and economics, as well as careful reflection on how increased geothermal power will affect poorer communities in a country where only 32% of residents have access to an electrical grid.⁽⁵⁾ A careful analysis shows that the benefits of geothermal energy far outweigh the risks for the further development thereof, but also that greater attention should be paid to sharing the fruits of such development more equitably amongst all Kenyans.

Are dangers lurking in geothermal science?

Critics of geothermal power point to two inherent dangers of this mode of electricity generation: groundwater contamination and an increased risk of earthquakes. To generate electricity, geothermal power relies on steam turbines driven by naturally occurring heat from deep within the earth. Such heat is left over from the earth’s formation and supplemented by friction as rocky materials shift, as well as by naturally occurring radioactive decay. To build a geothermal power plant, two wells must be dug: one well where hot water and steam can escape the earth, and another where steam can be cooled and re-deposited. The drilling of such wells is typically what causes concern regarding groundwater and earthquakes.

Geothermal power works by harvesting heated water from the Earth and re-depositing it.

Image courtesy of the US Department of Energy

For example, there was an instance where local residents of the Olkaria valley made the dramatic accusation that geothermal drilling had poisoned their drinking water, which was killing cattle and causing women to miscarry. Such claims can easily inspire fear of geothermal power. Under further investigation, however, the claims were discovered to be baseless. For further context, it should be noted that the Olkaria valley is normally a dry and arid region whose people historically relied on surface water from lakes and streams, not groundwater from wells. The concerns were mostly related to isolated cooling pools used before geothermal power water was re-injected. Currently, geothermal power plants typically re-inject water very quickly. KenGen also pipes in fresh water from Lake Naivasha for local communities to use, which is beneficial for communities in the Olkaria region. The most prominent voices in these conversations, however, are often the geothermal power companies themselves. It would behove disinterested government agencies such as Kenya’s Energy Regulatory Commission to increase its public messaging if in fact the geothermal power plants are fully in compliance with groundwater safety regulations. For now, especially with the piping in of fresh water, it seems that safe drinking water for communities can peacefully coexist with local geothermal power plants.

As for earthquakes, they are also a serious concern, but the risk can be evaluated and managed. The risk of causing earthquakes has stopped other geothermal power projects in their tracks, most notably a project in Switzerland in 2009.⁽⁶⁾ However, it is important to understand that such risks are uniquely tied to specific geographies, and there is scant evidence to suggest that the Olkaria valley is prone to large earthquakes or that geothermal wells will significantly increase this risk in the region.⁽⁷⁾ In fact, studies indicate that although the Great Rift Valley of Kenya is seismically active and prone to small tremors, the overall risk for a significant earthquake is low.⁽⁸⁾

The inherent risks of geothermal power are especially minor when compared to the downsides of other forms of energy: power plants that burn fossil fuels contribute to global warming; wind and solar power are unreliable sources of energy that depend on expensive energy storage; hydro power presents a host of environmental concerns and nuclear power carries fears of meltdowns. Geothermal power is clean, green and sustainable because it relies on practically unlimited stores of natural geological heat and emits virtually no carbon dioxide. As long as wells are dug carefully and under regulation, geothermal power is certainly one of the best options available for electricity production.

Economics and ecology concerns: Sizzle or fizzle?

Geothermal power plants are very costly to build – the new plant in Kenya cost US$ 1.3 billion – but once they are up and running they can generate electricity very cheaply. Kenyan officials estimate that geothermal energy costs around US$ 0.07/KWh to produce compared with diesel generation that costs US$ 0.22/KWh.⁽⁹⁾ Geothermal plants, once built, are also extremely stable. Geothermal power is not affected by whether the sun is shining or the wind is blowing or what the price of oil is. It isn’t even affected by drought – an issue that has plagued Kenya’s many hydropower dams resulting in unreliability. The main hurdle facing geothermal power is the initial investment funds, but Kenya is in a good position in this regard. With its proven track record of successful geothermal plant construction, market confidence is high in this Kenyan industry. Japanese investors recently announced that the success of Olkaria IV has convinced them to invest additional billions in Kenyan geothermal power plant projects.⁽¹⁰⁾

Another possible concern regarding the generation of geothermal power has to do with ecology. Kenyan geothermal plants are actually located inside Hell’s Gate National Park, home to a rich array of wildlife. Critics have argued that the numbers of some rare species of birds are declining in the area, and blame the geothermal power plants.⁽¹¹⁾ But, in fact, the shifting of the wildlife balance in the region predates geothermal development, and the mechanism by which the power plants might be responsible for any changes is not clear. Geothermal power companies are careful to consider their impact on the local environment: they claim to limit vehicle movement after dark and limit the noise level, allowing this to be monitored by a third party. KenGen ecological protection efforts have even gone as far as building pipelines tall enough to allow giraffes to pass underneath. It seems that the actual danger to wildlife or the environment in Hell’s Gate is minimal.

The geothermal power plants are, however, shifting tourism trends in the region. Some tourists express disappointment at the presence of the geothermal power plants, saying that they cause Hell’s Gate to look more like an industrial park than a nature park.⁽¹²⁾ Other tourists, in contrast, are actually drawn to the area because of the power plants – KenGen also operates a natural spa in the area, heated with natural geothermal energy. The spa is already proving popular with both locals and tourists, and plans for expansion include the construction of four interconnected lagoons and a sauna, which would make the Olkaria valley home to the largest health spa in Africa.

All in all, the downsides to geothermal energy are minimal. Considering that less than 10% of the earth’s land area contains the special geological characteristics that make a geothermal power plant possible,⁽¹³⁾ Kenya is certainly acting wisely by taking advantage of its geological blessings.

Sharing the wealth

Given that Kenya just injected 280 mega-watts into its electrical grid, many were anticipating a significant drop in energy prices.⁽¹⁴⁾ However, there is some controversy regarding whether or not this is proving to be true. Journalists are noting that the government is increasing taxes on electricity, and homes that are already on the electrical grid are sharply increasing their energy usage. This has resulted in price stagnation for many households – inconsistent with what Kenya’s President Kenyatta has promised in the past.⁽¹⁵⁾

The electrification rate in Kenya is currently hovering around 32% but the government aims to boost this to 70% by 2020 through increased investment and infrastructure development, particularly in rural areas.

Data source: Quandl and ‘Kenya, AfDB ink deal for rural electricity grid’, Business Daily Africa

This problem is especially concerning considering that not many households in Kenya even have an electricity bill to begin with. As little as 32% of households in Kenya have regular access to an electrical grid – many rural residents are left in the dark.⁽¹⁶⁾ Kenya has a dedicated Rural Electrification Agency (REA), and it would seem that their work is cut out for them. When interviewed for this article, representatives neither at KenGen (which operates three large geothermal plants in Kenya) nor at Ormat Technologies (which operates a fourth) talked about collaborations with the REA. KenGen, when asked about their efforts to expand access to electricity, merely stated that rural electrification was the job of the REA, and Ormat simply boasted of all the mega-watts it was pouring into the Kenyan grid, which at this point seems to be facilitating already well-off Kenyans to live more extravagant lifestyles, driving a wedge between the haves and the have-nots.

Such concerns are compounded by the fact that Kenya is planning to export electricity to neighbouring countries. When geothermal power plants receive multi-billion dollar investments from foreign actors, it would behove the government of Kenya to emphasise and publicise how such investment dollars will make their way to developing the country’s meagre electrical grid connectivity – before boasting of exporting electricity internationally. Electricity is, after all, a basic public utility. It is essential that more Kenyans be connected to the national power grid – not just for social inclusion reasons, but also so that they can stop relying on environmentally harmful practices such as wood-burning and electricity via diesel generator. Off-grid solutions such as solar home systems and microgrids have important roles to play in electrification in temporary or supplementary capacities, but they are ultimately a poor substitute for national grid integration because of their fundamental unreliability. For this reason, the Breakthrough Institute accurately describes off-grid solutions as “a vision of, at best, charity for the world’s poor, not the kind of economic development that results in longer lives, higher standards of living, and stronger and more inclusive socioeconomic institutions.”⁽¹⁷⁾

A recent in-depth study by the United States-based National Bureau of Economic Research (NBER) suggests that the main arterials of the Kenyan national electrical grid are already well-placed. The barrier to accessing on-grid electricity is not lack of infrastructure per se, but rather the high costs for individual households to connect to local grid access points. The NBER study suggests that the Kenyan government should be heavily subsidising these up-front costs for households to connect, just as the US did during its national electrification programme in the 1930s.⁽¹⁸⁾ Hopefully the reported electricity tax increases will go towards programmes like this so that electrification connection fees can continue to decrease in Kenya.⁽¹⁹⁾ Such subsidies are starting to be introduced in some communities, as applauded by editorials in the Kenyan media, and this trend should definitely continue and expand.⁽²⁰⁾

Warm wishes for the future

KenGen is in hot pursuit of new geothermal power, and several new plants are currently being planned. The science and economics are both clear: geothermal energy is a smart move for Kenya and deserves every investment dollar it can get. It is a moral imperative, however, that those investment dollars eventually find their way to rural Kenyan households. This will allow the country to decrease the price of electricity and expand access to a greater share of the population, all while generating hardly any harmful carbon emissions as the national share of geothermal power grows. That’s something that not just Kenya but the entire global community can appreciate.

Written by Philip Rodenbough ⁽¹⁾

Notes:

(1) By Philip Rodenbough. Contact Philip through Consultancy Africa Intelligence’s South African office ( officesa@consultancyafrica.com). This paper was developed with the assistance of Chris Walker and Gerald Flanagan. Edited by Liezl Stretton. Web Publications Manager: Claire Furphy.
(2) Some reports simply declare the new plant to be the largest of its kind in the world, while others indicate that the plant uses the largest single geothermal steam turbines in the world (with other plants having a greater total capacity). See Bayar, T., ‘World's largest geothermal plant opens in Kenya as global development steams ahead’, Power Engineering International, 20 February 2015, http://www.powerengineeringint.com; Moore, J.N. and Simmons, S.F., ‘More power from below’, Science, 24 May 2013, http://www.sciencemag.org; Acker, K., ‘Kenya: Quick peek into the sub-Saharan economic giant’, Back Page News, 6 March 2015, http://www.backpgs.com.
(3) There are four major inter-related complexes of geothermal power in Kenya: Olkaria I, Olkaria II, Olkaria III and Olkaria IV. Olkaria I, II and IV are owned by the Kenyan company KenGen, while Olkaria III is owned by the US Company Ormat Technologies. Each power complex consists of multiple sub-plants and extensions, and there are conflicting reports of the precise capacity of each individual complex that KenGen was unable to clarify in correspondence for this paper. For further information see ‘The 45 MW geothermal power plant Olkaria I in Kenya’, The Federal Institute for Geosciences and Natural Resources (BGR), http://www.bgr.bund.de; Bayar, T., ‘World's largest geothermal plant opens in Kenya as global development steams ahead’, Power Engineering International, 20 February 2015, http://www.powerengineeringint.com; ‘KenGen commissions the entire 280MW geothermal project’, KenGen, http://www.kengen.co.ke; Personal Communication, Zeddy, S., KenGen Media Relations, 20 March 2015.
(4) Thiong’o, P., ‘Work on $1.3bn Olkaria IV geothermal plant starts’, The East African, 21 July 2012, http://www.theeastafrican.co.ke.
(5) ‘Kenya: Household electrification rate’, World Bank Cross Country Data, https://www.quandl.com.
(6) For more information, see Glanz, J., ‘Quake Threat Leads Swiss to Close Geothermal Project’, The New York Times, 10 December 2009, http://www.nytimes.com.
(7) ‘Geothermal energy: Hot rocks’, The Economist, 16 August 2014, http://www.economist.com.
(8) Rao, S., ‘Assessing seismic risk in Kenya’, GSDRC Applied Knowledge Services, 26 June 2013, http://www.gsdrc.org.
(9) Mbogo, S., ‘Kenya’s energy mix: Earth to factory’, Financial Mail, 23 October 2014, http://www.financialmail.co.za.
(10) Otini, R., ‘Toyota signals more appetite for Kenya’s geothermal tenders’, Daily Nation, 15 March 2015, http://www.nation.co.ke.
(11) Heuler, H., ‘Kenya’s green energy boom could threaten national parks’, Voice of America, 10 February 2015, http://www.voanews.com.
(12) Ibid.
(13) ‘How geothermal energy works’, The Union of Concerned Scientists, 22 December 2014, http://www.ucsusa.org.
(14) ‘Kenya’s geothermal investments contribute to green energy growth, competitiveness and shared prosperity’, The World Bank, 23 February 2015, http://www.worldbank.org.
(15) Situma, E., ‘Why geothermal has failed to cut electricity prices’, Business Daily, 4 January 2015, http://www.businessdailyafrica.com.
(16) Njoroge, K., ‘Kenya Power cuts cost of connecting homes to grids’, Business Daily Africa, 22 October 2014, http://www.businessdailyafrica.com.
(17) Lee, K., et al., ‘Barriers to electrification for “under grid” households in rural Kenya’, NBER Working Paper Series, July 2014, http://www.nber.org.
(18) Ibid.
(19) Njoroge, K., ‘Kenya Power cuts cost of connecting homes to grids’, Business Daily Africa, 22 October 2014, http://www.businessdailyafrica.com.
(20) ‘Slum electrification is wealth distribution’, The Star, 28 January 2015, http://www.the-star.co.ke.