Geothermal Development in Kenya

With the ever-increasing energy demands, the Geothermal Development Company (GDC) is at the forefront of harnessing Kenya’s vast geothermal potential. Recent discoveries place the company in a pivotal role in reshaping the country’s energy future. In this exclusive Q&A, we speak with Paul Ngugi, CEO of GDC, who shares insights into the significance of these discoveries, key geological features that present future exploration opportunities, and updates on ongoing geothermal projects.

The conversation delves into GDC’s partnerships with Malawi, highlighting collaborative initiatives that foster knowledge sharing and technological advancements and bring significant socio-economic benefits to local communities. As we explore new avenues for investment in the geothermal sector, the CEO discusses the incentives and regulatory frameworks that can attract potential investors and drive sustainable growth. Following is a discussion about the developments in the region’s geothermal sector and GDC’s crucial role in this transformative journey.

What are the most recent geothermal discoveries in Kenya?

The government is undertaking Continuous studies on geothermal energy at various stages through the Ministry of Energy & Petroleum, GDC, and the Independent Power Producers. The available data on geothermal is updated, and no new sites have been featured.

About a third (33 per cent) of the installed capacity will come from geothermal by 2029.

The main geological features are areas along the Great Rift Valley.

Can you provide a status update on the ongoing geothermal projects GDC manages?

What milestones have been achieved recently, and what are the upcoming targets?

The addition of 35 MW to the grid and another 70MW is expected to be added by the end of 2025. So far, Paka drilling has indicated a potential of 70MW of steam. Drilling is ongoing, and after the feasibility study, GDC targets commissioning a 100MW plant by December 2026.

What are GDC’s plans for expanding capacity and further developing existing geothermal fields?

GDC targets 1,065MW of geothermal development by 2030. According to the current strategic plan, we target 218MW from the Menengai, Baringo-Silali, and Suswa projects in the next five years.

Up until 2030, GDC will focus on developing Menengai, Baringo-Silali and Suswa projects.

Regional Partnerships and Corporations

 Could you elaborate on the collaborative initiatives between GDC and Malawi in the geothermal sector?

The two parties have a collaborative agreement to develop geothermal resources in Malawi. The scope is broad and cuts across the entire geothermal resource development value chain. However, Malawi is still in the initial stages of development. Our focus for now is on the formative stages of development.

What are the primary goals of this partnership, and how is it progressing?

The goal is to harness Malawi’s abundant geothermal resources for electricity and other uses. Malawi has abundant geothermal resources, some of which could be developed to generate electricity. The presence of numerous hot springs spread throughout the country strongly indicates this. We are engaged in discussions to undertake reconnaissance studies in three blocks within Malawi.

How does GDC share expertise, technology, and best practices with its partners, including Malawi?

We begin by establishing at what level of development our partners are at. In this region, different countries are at different levels of development as far as geothermal development is concerned. Mostly we tailor-make whatever works need to be done based on user needs. We increasingly carry out on-the-job training, and when we carry out consultancies on-site there is always a significant element of knowledge transfer. This has happened in almost all the engagements we have had with the various partners. We have an inbuilt rigorous system to check the quality and standard of our deliverables and services.

Can you provide examples of successful knowledge transfer or technological support?

Djibouti is a good example. We have trained four cohorts of ODDEG personnel. We have also supported Rwanda, Uganda, Tanzania, and even Ethiopia, providing consultancy services and capacity-building programs.

What socio-economic benefits do geothermal projects bring to local communities in Kenya?

Across the value chain of geothermal development, numerous benefits accrue, including participation of domestic companies, Creation of employment and skill development at local levels, local development, gender equality, and social inclusion.

How are these benefits measured and sustained over the long term?

The objectives of what we intend to do are usually determined. Most benefits would manifest as a transformed way of life for these communities. We see both tangible and intangible benefits. Many now have started engaging in activities that generate income for them. As a company, we encourage them to do so since this is a sure way to achieve sustainability.

In what ways has the development of geothermal energy impacted local employment and infrastructure?

With the opening up of these frontiers, areas that would otherwise not be accessible are now accessible. The impact of enhanced economic activities is enormous. The development of geothermal resources requires the support of many skilled personnel and professionals from different sectors during the various stages of resource development. Skills such as welders, mechanics, pipe fitters, plumbers, electricians, carpenters, and casuals are being sourced from localities, transforming these communities.

Opportunities for Investment in the Geothermal Sector

What new opportunities for investment does Kenya’s geothermal sector present?

The main areas of geothermal sector investment in Kenya are joint steam development, electricity generation, green hydrogen, and direct uses of geothermal energy.

What incentives and support mechanisms are in place for potential investors in the geothermal sector?

Favorable geothermal tariff, a guaranteed market for power.

Are there any recent or upcoming policy changes that potential investors should know?

The latest policy change is the recently launched 20-year Least Cost Power Development Plan (LCPDP) 2024-2043, which anticipates geothermal power increasing by about 752MWe by 2029 and 2,838MWe by 2043. The latest tariff for geothermal power plants has been set at 5.69 UScts/Kwh as per the latest gazette notice by the EPRA.

How does GDC ensure the business environment remains favorable and competitive for geothermal energy development?

GDC continually undertakes geothermal studies, engages in international geothermal forums to keep abreast of emerging issues, builds the capacity of its staff, and offers technical advisory and training in the region. We also ensure we keep it green by aligning activities with environmental laws.

What are your final thoughts to stakeholders and potential investors in the geothermal sector?

Geothermal development has its risks, but is one fulfilling journey worth undertaking.

Kenya has a huge geothermal potential estimated at 10,000MW. We welcome investment in geothermal to meet the country’s future energy needs.