LB: World Bank has supported geothermal in Africa before, back as far as 1978 in Kenya. What were some lessons that the Bank is implementing into its Djibouti experience?
WB: The World Bank Group has been supporting Kenya’s geothermal development since the 1970s. Geothermal power now accounts for over 12 percent of the installed capacity in Kenya’s national grid, including a geothermal IPP, and the vulnerability of the country’s power supply to hydrological risks and fuel price volatility has been reduced. It has significantly contributed to stabilize supply of electricity, which has helped improve people’s livelihoods and fostered income-generating activities. The video link below shows some of the impacts geothermal power has had in Kenya:
Some of the key lessons learned from the Kenya experience include: (i) government commitment and support to geothermal development is key; (ii) approach to geothermal development should be tailored depending on site and stages of development; (iii) having a dedicated unit accountable for geothermal activities is important; and (iv) there must be conscious effort to accumulate technical capabilities on the ground through learning-by-doing and extensive capacity development activities.
These lessons have been incorporated into the Djibouti Project through (i) the Government’s investment and acceptance of concessional financing for exploratory drilling, (ii) the development of a site-specific drilling program resulting in certified well test results which will be incorporated into any future tendering documents of (iii) the establishment of a clear chain of responsibility and authority over the project that runs through the project management unit (PMU) to the Director General of the electricity utility Electricite De Djibouti (EDD), and (iv) capacity building through direct interface and training of the EDD and Centre for Studies and Research of Djibouti (CERD) staff with international geothermal teams which are taking the project lead.
LB: Africa’s economy is growing faster than any other continent, something that then-Kenyan ambassador Elkhana Odembo mentioned at a Geothermal Energy Association event earlier this year. How does WB react to this draw and related aspects like involving the local community and ensuring environmental steps?
WB: To accommodate and foster rapid growth in the continent, investment in key infrastructure including reliable power supply will be crucial. Geothermal power presents a unique opportunity by enabling clean and sizable baseload power supply in a cost-competitive manner. In many countries, it also enables both mitigation and adaptation to climate change by allowing low carbon growth while reducing vulnerability of the electricity grid to hydrological risks. Governments in the region are trying to harness geothermal resources in an environmentally and socially sustainable manner. In Kenya, for example, consultations with local communities are undertaken and the entities concerned are supporting livelihood improvement activities benefiting them. In the future, geothermal resources could also support social development through direct use of residual heat. The World Bank is also encouraging the entities to conduct cumulative environmental impact assessments whereby environmental impacts are assessed holistically in targeted geothermal fields.
LB: At geothermal industry events in the U.S. we have seen growing interest and excitement in regard to opportunities in East Africa. How is geothermal energy being received in Djibouti?
WB: Geothermal exploration started in the 1970s in Djibouti and several attempts were made to develop the country’s potential. The development of geothermal energy is today a national priority of the Government of Djibouti, and Djiboutians are eager to see it finally happen, as it would help replace expensive thermal power generation and reduce electricity cost, thus enabling a greater access to electricity.
In other parts of East Africa, and spearheaded by Kenya, geothermal development has been progressing steadily since the 1970s. East African countries, such as Ethiopia, Kenya, Tanzania, Uganda, have been experiencing steady economic growth over the last several years. This economic growth increased the electricity demand in general, and the countries have to look for new energy resources to meet this growing demand. Countries with limited energy resources had to depend on expensive thermal power plants running on imported fuels. To ensure sustainable growth and competitiveness, countries decided to invest in developing indigenous renewable energy sources. Initially, the countries started with developing their hydro power resources and then continued to tap into their wind power resources. Given the relatively higher risk perception and upstream capital requirement to develop geothermal energy, progress in this area was initially limited. However, the high level of reliability, the low level of meteorological risk, and the baseload power supply characteristics of geothermal energy have increased East African countries’ interest to invest in this energy resource over the past years.
LB: World Bank’s funding will be for the assessment phase. What are the biggest factors and risks considered at the current stage?
WB: During the exploration phase, the highest risks are geological in nature. In the case of Djibouti’s geothermal program, geological mapping identified the rift anomaly and confirmed potential geothermal resources through exploratory drilling starting in the 1970s. More recently, additional professionally executed geological surface studies were performed by Reykjavik Energy Incorporated (REI) in 2010. These studies have led to the identification of the Fiale Caldera area drilling targets. Given the vertical fracturing of the caldera, directional drilling will be used to reduce risk by increasing the probability of locating the fluids that move through these permeable fractures. Finally, the drilling program design includes the engagement of a qualified international Geothermal Consultant, whose responsibilities will include development of the final well design, the targeting of four full size production wells, and the management of the technical field drilling operations.
Djibouti’s 36-month exploratory drilling program is currently in the initial stages of tendering the program positions that will be held by international companies with proven technical and management expertise in the geothermal arena.