State-owned KenGen #ticker:KENGEN is seeking seeking consultants to help convert existing thermal plants generating about 720 megawatts (MW) into gas fired plants in fresh bid to lower cost of electricity for homes and businesses.
KenGen, which relies largely on hydropower and geothermal, said the conversion will help lower the cost of power in the country by eliminating reliance on the more costly heavy fuel oil that KenGen has resorted to in the past during dry spells.
The government has been striving to reduce the uptake of thermal power due to its high retail rate of Sh18 per kilowatt-hour (kWh), compared to other sources like hydropower (Sh3.2), solar (Sh6.7), geothermal (Sh9.1) and wind (Sh11.2).
The cost of a unit of natural gas–fired power is much lower compared to thermal.
“To reduce the cost of power supply in the country we plan to study the feasibility of converting the existing 720MW thermal power plants operating on HFO (heavy fuel oil) to operate on natural gas,” said KenGen in the tender notice.
KenGen is also mulling developing a gas-fired power plant that would run on imported liquefied natural gas (LNG).
The power producer said the gas fired plant whose expected capacity it did not disclose would help meet growing demand for electricity and help the country diversify its energy sources as well as cut greenhouse gas emissions.
To be based at the port city of Mombasa, the gas fired plant will be fuelled by LNG processed at a facility located nearby and would have an economic life of 20 years, the company said on Tuesday.
“The proposed natural gas infrastructure project would comprise of…development of a new natural gas fired generating plant if determined to be necessary by the study.”
Consequently KenGen has invited bids for a feasibility study on the development of the natural gas fired plant and infrastructure.
“The objectives of the feasibility study is to establish the viability of conversion of existing thermal (HFO) power plants with a total installed capacity of 720MW to operate on natural gas and resulting implication on cost of electricity,” it said in the notice.The government’s promise for cheaper electricity is heavily pegged on increased use of the renewable energy sources like geothermal, wind and solar, which cuts the costly thermal power and ultimately reduces the fuel cost adjustment levy in bills.The country generates a total of 2,763 MW from a mix of thermal, renewable energy and existing hydropower dams. KenGen plans to more […]
