Companies
US power firm OrPower plans upgrade in Kenya
Friday July 07 2023
The 35MW geothermal power plant in Menengai, Nakuru County which is being undertaken by Sosian Menengai Geothermal Power Limited, QPEA GT Menengai and Orpower Twenty-Two contracted by Globeleq Africa Limited in this photo taken on June 8, 2023. PHOTO | BONIFACE MWANGI | NMG
US-owned OrPower 4 is expanding the generation capacity of its geothermal wells to boost electricity sales.
The independent power producer generates 120 megawatts from its four geothermal wells in the Olkaria Three Complex. However, it did not disclose the anticipated increase in capacity under the project set for completion by the end of this year.
OrPower, the third biggest electricity supplier to Kenya Power, has seen its supplies drop over the years prompting the move to expand generation capacity even as it grapples with increased delays in payments for its electricity sales.
Read: Orpower bags Sh12bn for 35MW well
“We are performing a drilling campaign and expect to increase plant capacity in 2023,” says OrPower in its latest annual report.
The firm’s decision to upgrade the capacity of its plants is driven by Kenya’s move to fully transition to clean energy by 2030, driven by increased tapping of geothermal, solar and wind energy sources.
Currently, an estimated 80 percent of Kenya’s electricity is from clean sources mainly geothermal and wind.
OrPower’s electricity sales to Kenya Power have declined over the years to 976 gigawatts-hour (GWh) in the year to June 2022 from a high of 1,285 GWh between 2018-19.
The disclosures show that Kenya Power is yet to pay the power producer $11.8 million (Sh1.76 billion at current exchange rates) for electricity supplied last year.
The total debt was $27 million but Kenya Power paid $15.2 million (Sh1.9 billion) in February even as OrPower flagged the delays in the payments.
“There has been a deterioration in the collection from KPLC that became slower than in the past and as of December 31, 2022, the amount overdue from KPLC in Kenya was $27.0 million of which $15.2 million was paid in January and February of 2023,” it said.
OrPower 4 Inc. supplied 976 GWh to Kenya Power in the year ended June 2022, making it the third biggest producer behind Turkana Wind Power at 1,573 GWh and KenGen (7,911 GWh).
Kenya Power is the third biggest customer for OrPower 4 Inc. and accounted for 14.4 percent of the revenues in the year ended December, behind US utilities, Southern California Public Power Authority and NV Energy at 16.9 percent and 21.5 percent respectively.
Read: Kenya Power pays Sh1 billion to US energy firm Ormat
OrPower 4 Inc. has a twenty-year power purchase deal with Kenya Power that lapses between 2033 and 2036.
The PPA deal for the firm’s Plant Two will lapse in 2033 followed by the deal for Plant One and Three that ends in 2034 and that for Plant Four in 2036.
