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East Africa Sees a Flurry of Geothermal Activity

The Great Rift Valley, an area of Eastern Africa with strong tectonic activity, offers immense potential for large-scale geothermal projects. Some estimates put the resource potential along the rift at 15,000 MW.

In order to take advantage of that baseload resource (and become less dependent on the seasonal variability of hydropower) a few countries are adopting strong targets for geothermal development.

In a region where the population has limited access to electricity, the slew of geothermal projects under development could expand that reach – assuming the grid and workforce in countries like Kenya, Rwanda and Uganda can handle the coming expansion of power plants.

Kenya is the leader in African geothermal power production. Last year, the country's main power plant developer, KenGen, announced plans to develop 280 MW of geothermal by 2013. And the government-owned developer, Geothermal Development Company (GDC), set a target of 200 MW per year over the next decade.

With over 210 MW of projects completed, Kenya is no stranger to geothermal. But the lack of a qualified workforce and a shortage of drilling rigs may hinder the goal of getting 2,300 MW of projects in the ground by 2020.

Last October, GDC said it didn't have enough domestic workers to develop the projects in its pipeline. The company is using workers from China who are flown in and work month-long shifts – significantly increasing the cost of developing projects.

In order to alleviate the problem, the United Nations University Geothermal Training Program has been providing six-month intensive training courses in exploration, reservoir engineering, environmental studies and drilling since the late 70's. Many of the students come from Africa. However, the yearly turnover hasn't been enough to meet the rising demand for workers in the growing geothermal industry.

The other problem has been drilling rigs. Because of competition with the oil and gas industry, the lack of rigs has been a big hinderance for geothermal developers around the world. The Icelandic bank Islandsbanki projects that the need for drilling rigs will increase by almost 150% in the U.S. alone by 2013.

To assist the Kenyans with equipment needs, the Export-Import Bank of China and the French Development Agency said last week that they would loan the Kenyan government more than USD $160 million to purchase five drilling rigs. If the government can acquire the rigs, that will bring the total number in the country to 10, which is close to the 12 rigs needed in the next few years.

In nearby Rawanda, government officials have called for a target of 300 MW of geothermal projects by 2017. Those projects will be developed in tandem with additional investment in grid infrastructure. The goal is to get half of all households connected to the grid by then, with 50% of the electricity coming from geothermal. That increase of 300 MW would be huge for the country, as it currently only has 70 MW of installed electricity capacity.

With some help from the World Bank and the African Development Bank, the Rwandan government is planning on drilling three geothermal wells this year at a cost of USD $20 million. As in Kenya, with such poor grid infrastructure and a limited workforce, it's unclear if Rwanda can meet that desired target. But the aid from international lenders will surely help.

In a final piece of news last week, Uganda set a feed-in tariff for various renewable energy technologies, including geothermal.

The tariffs will guarantee energy producers a payment of USD $.077 for a 20-year period of time. As part of the FIT program, the government hopes to stimulate over 100 MW of development by 2014. The country's total geothermal resources are estimated at 450 MW.

The technical and financial challenges in these East African countries will be immense: But with governments and developers showing intensions to support the industry, development will likely be strong in the region.

Last October, Deutsche Welle put together a great mini-documentary on Kenya's geothermal power development, highlighting many of the challenges to scaling the industry. It's worth a watch.

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