KENYA COUNTRY UPDATE

PEKETSA MANGI & DR. PETER OMENDA

ARGEO C6, 2ND – 6TH NOV 2016

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Kenya In Africa

44 MILLION PEOPLE

LOCATION: Eastern part of Africa

INSTALLED CAPACITY: 2.3GW

POWER OUTPUT: 8,840 GWh

TOTAL GEOTHERMAL INSTALLED CAPACITY: 676.8

MW (30%)

GEOTHERMAL POTENTIAL: > 10,000MW

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Power Sector Overview

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Ministry of Energy and Petroleum

ERC

Energy Tribunal

KenGen Imports IPPs REA

GDC –steam developer

KETRACO – Transmission operator

KPLC – Distribution/Supply

Customers

Electricity sub sector

unbundled

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Peak demand estimated to reach 7,000 MW by 2025, requiring 8,100 MW

generation capacity at a 15% reserve margin

10,000

8,000

6,000

4,000

2,000

0

Peak demand

8,949

21

7,729

3,605

2025 23

7,729

22

7,041

Peak demand with

15% reserve margin 8,097

24

7,754

20

5,219

19

4,186

18 17 16

2,552

3,078

2015

2,299

7,754

Projected contracted capacity and peak demand

in MW

SOURCE: Team analysis; KPLC PPA list of projects, interviews with most developers, KenGen, ERC Kenya ten year power sector

expansion report

Capacity increases

significantly as Lamu (960

MW) and Kitui (960 MW)

coal plants come online

Demand and Supply for the Country

900 MW excess contracted capacity

expected by 2025 with 15% reserve

margin – speed will be key to

deliver projected plan

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Geothermal Sites in Kenya

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• 23 prospects

• Located within the Kenya rift

which is part of the continental

East African Rift system

• Three (3) fields are currently

under development, namely, (a)

Olkaria [KenGen, OrPower,

AKIIRA], (b) Eburru [KenGen],

and (c) Menengai [GDC]

• Other prospects are at

exploration stage

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History of Geothermal Development in

Kenya

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• Exploration wells drilled in 1959 – 1960;

1973-1975

• Discovery well was drilled in 1975 (OW-2)

• Appraisal and production wells drilled at

Olkaria between 1975-1981

• 1st geothermal power plant commissioned in

stages: 1981-1985 (45MW)

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• Testing of well OW-X2 at Olkaria on 8th September 1971

• 1st geothermal well to discharge high pressure steam in

Kenya

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Geothermal generation

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Public Sector

• KenGen

• GDC

Current Private Investments

• OrPower4 Inc. (Ormat)

(139MW)

• Oserian Development

Company (4.3MW)

Coming soon:

• AGIL

• Marine Power

(AkiiraOne)

8

3,4

42

1,9

04

1,3

33

1,0

05

901

895

676.8

664

537

275

208

204

104

97

56

42

29

29

8

# 7 WORLDWIDE

12,328 MW WORLDWIDE

Global Geothermal Development • First African country to develop commercial Geothermal Energy utilization

• One of the fastest growing geothermal markets in the World

• World’s seventh largest geothermal power producer

• Current installed interconnected capacity= 676.8 MWe

Modified from GEA, 2013: Geothermal Power International Market overview report

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DRILLING AT OLKARIA GEOTHERMAL FIELD, NET ORPOWER AND AKIIRA WELLS 9

1 1 1 3 1 2 4 6 3 3 4 3 5 2 3 9 10 14

8 4 4 2 3 1 3 2 2 7 12 14 21 20

35 30 38

1 2 3 6 7 9 13 19 22 25 29 32 37 39 42

51 61

75 83 87 91 93 96 97 100 102 104

111 123

137

158

178

213

243

287

-

50

100

150

200

250

300

Wells Per Year Cummulative No. of Wells

287 DRILLED WELLS

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TOTAL GEOTHERMAL INSTALLED CAPACITY 2016

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Olkaria Olkaria I 1981-1985 3 Operating 1F 45

Olkaria Olkaria II 2003 3 Operating 1F 70

Olkaria Olkaria II Unit 3 2010 3 Operating 1F 35

Eburru Eburru 2012 1 Operating B 2.4

Oserian Oserian-1 2003 1 Operating B 2.5

Oserian Oserian-2 2006 1 Operating 1F 1.8

Olkaria Olkaria Wellhead 2016 6 Operating 1F 81.1

Olkaria OrPower 4 Plant I 2000 6 Operating B 60

Olkaria OrPower 4 –Plant 2 2008 3 Operating B 45

Olkaria OrPower 4 –Plant 3 2014 1 Operating B 22.5

Olkaria OrPower 4 –Plant 4 2015 1 Operating B 11.5

Olkaria Olkaria IV Unit 1 2014 1 Operating 1F 75

Olkaria Olkaria IV Unit 2 2014 1 Operating 1F 75

Olkaria Olkaria I AU1 2014 1 Operating 1F 75

Olkaria Olkaria I AU2 2014 1 Operating 1F 75

Menengai Menengai 2014** 3 Construction Ongoing 1F -

Silali Silali 2017** NYD Planned - -

Longonot AGIL 2017** " Planned - -

Suswa Suswa 2017** " Planned - -

Olkaria AKIIRA One 2017** " Planned - -

Menengai Menengai 2017** " Planned - -

Eburru Eburru 2018** " Planned - -

Total 676.8

Key: 1F- Single Flash. B- Binary

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Direct Uses in Kenya

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Use Installed

Capacity1)

Annual Energy

Use2)

(MWt) (TJ/yr = 1012 J/yr)

Individual Space Heating

District Heating

Air Conditioning (Cooling)

Greenhouse Heating 16 126

Fish Farming

Animal Farming

Agricultural Drying 1 10

Industrial Process Heat

Snow Melting

Bathing and Swimming 5.4 46

Subtotal

Geothermal Heat Pumps

TOTAL 22.4 182

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Geothermal utilization

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Orpower4 -1998-2016 (139MW) Greenhouse heating

Panoramic view of the Olkaria Geothermal Spa

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45 MW Olkaria I Power Plant

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105 MW Olkaria II Power Plant

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150 MW Olkaria IV

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Olkaria I Units 4 and 5 (150MW)

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5MW Wellhead Unit at Olkaria

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(i) Cut Roses Greenhouse Heating (50 acres), (ii) Fumigation of soils and sterilization of liquid recycled plant fertilizers, (iii) carbon dioxide enrichment

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Eburru Geothermal field

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Geothermal Outlook: 2015-2017

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• Estimated Potential =

10,000MW

• Installed capacity – 676.8 MWe

• Target by 2017: 1,967MWe

• Target by 2030: 5,000MWe

• Direct use energy growth from

current installed capacity of

22.4MWt to > 200MWt by 2020

Geothermal Growth Projections for Kenya

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Additional Power plants at Olkaria • 140 MW Olkaria V –

Ground breaking:

December 2016

• Expected

commissioning

2018

• 70 MW Olkaria 1 AU

6 by

2018/2019

• 140 MW PPP Project

Expected commissioning:

2018/2019

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Additional capacity at Olkaria

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46.3 MW Modular power plants (Package 1 &

2)

Advertised 22nd Sep 2016. Closing: 22nd

December 2016 Expected commissioning

2018

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Menengai Geothermal field: 105MW Phase 1

• Drilling ongoing for

105MW power plants

• 7 drill rigs being used

• Power plant

commissioning expected in

2017/18

• Additional 60MW plant

expected by 2019

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Menengai Geothermal Field

• 30 wells so far drilled

within caldera floor

• Maximum temp ~400oC at

2.3km depth – hottest well

in Kenya!

• Well output of up to

32MWe

• Dry and wet wells present

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Drilling Rig at Menengai Field

Photo of one of the 7 rigs currently drilling at Menengai field

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Baringo-Silali Geothermal Prospect

• Comprise Baringo,

Korosi, Paka and Silali

prospects

• Planned for 200MWe

Phase 1 development

• Road and water works

under construction

• Drilling expected to

commence in 2017

• Financing from KfW,

UNEP, JICA and

Government of Kenya

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Other Geothermal Projects

AGIL, Inc. to start exploration drilling at Longonot

prospect in 2017. Target 70MWe by 2019

GDC to develop Menengai Phase 2 - 60MWe by

2019

AkiiraOne, commenced exploration drilling at SE

Olkaria in 2015. Target 70MWe by 2019.

GDC is planning to undertake exploration drilling in

Suswa in 2017 (150MWe).

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JOH-KGN001-20070825-JvW-P1

Period Research & Development Incl. Surface Exploration & Exploration

Drilling

Field Development

Including Production Drilling & Surface

Equipment

Utilization Funding Type

Direct Electrical Private Public

Million US$ Million US$ Million US$

Million US$

% %

1995-1999 9 5 0 14 0 100

2000-2004 0.1 20 8 194 13 87

2005-2009 1.0 186 0 195 24 76

2010-2014 17 1,004 1 1,137 21 79

Total Investments in Geothermal in 2014

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JOH-KGN001-20070825-JvW-P1

Olkaria Model

KenGen

SURFACE EXPLORATION

EXPLORATION, APPRAISAL AND

PRODUCTION DRILLING

FEASIBILITY STUDY

CONSTRUCTION AND MANAGEMENT

OF STEAM GATHERING SYSTEM

CONSTRUCTION & OPERATION OF

POWER PLANT

ENVIRONMENTAL IMPACT ASSESSMENT AND ENVIRONMENTAL

MANAGEMENT PLAN

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GDC Model 1

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GDC

SURFACE EXPLORATION

EXPLORATION, APPRAISAL AND

PRODUCTION DRILLING

FEASIBILITY STUDY

CONSTRUCTION AND MANAGEMENT

OF STEAM GATHERING SYSTEM

CONSTRUCTION & OPERATION OF

POWER PLANT

PRIVATE

ENTITY

Sale of steam

ENVIRONMENTAL IMPACT ASSESSMENT AND ENVIRONMENTAL

MANAGEMENT PLAN

GDC & PRIVATE PLAYER

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GDC Model 2

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GDC & Private Sector

SURFACE EXPLORATION AND

EXPLORATION DRILLING

EXPLORATION, APPRAISAL AND

PRODUCTION DRILLING

FEASIBILITY STUDY

CONSTRUCTION AND MANAGEMENT

OF STEAM GATHERING SYSTEM

CONSTRUCTION & OPERATION OF

POWER PLANT

PRIVATE

ENTITY

Sale of steam

ENVIRONMENTAL IMPACT ASSESSMENT AND ENVIRONMENTAL

MANAGEMENT PLAN

GDC & PRIVATE PLAYER

EPC

GDC

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Conclusions

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Kenya is the new global investment hub for

geothermal development.

Opportunities include the following:

- Supply of steamfield and power plant

equipment

- Supply of drilling materials and services

- Engineering and scientific consultancies

- EPC contracts

- IPP

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GROWTH CATALYSTS Resource availability

Bilateral partners support

Regulatory framework – Both Public and Private

sector participation

Government commitment

Expertise and equipment

Environmental management- mitigation of

geothermal dev impacts

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JOH-KGN001-20070825-JvW-P1

THANK YOU