The Geothermal Development Company (GDC) has posted Ksh 2.1 billion profit before tax for the Financial Year 2017/18.
GDC Chief Executive Officer Johnson P. Ole Nchoe said the current financial results indicated a sharp increase of profits from the previous Ksh 896 million made in the 2016/2017 financial year.
“The increased revenues are an indication that we are stable and that the fortunes of the company are getting better,” said Ole Nchoe.
During the year under review, the state corporation’s asset base increased from Ksh 69 billion as of June 2017 to the current Ksh 77 billion.
“GDC entered into a steam sales agreement for the sale of 320MW of steam to Kenya Electricity Generating Company (KenGen). The increase in profits is attributed to a boost in steam sales from our geothermal wells in Olkaria to KenGen for electricity generation,” stated the CEO.
Ole Nchoe said Kenyans were inching closer to getting a relief of lower power bills when three independent power producers (IPPS) cleared by GDC start operations at the Menengai Crater Floor in Nakuru.
The three producers, Quantam Power East Africa, OrPower22 and Sosian Menengai, are expected to set up power plants under a build–own–operate model, giving hope for cheap electrical power in the country.
Each is expected to set up a 35MW modular geothermal power plant in the Menengai Crater field to generate a cumulative of 105 MW.
“Once complete, the Menengai GDC plant will produce enough electricity to serve almost half a million homesteads and 300,000 businesses. We have undertaken 95 percent of works on a 25km long pipeline which is expected to carry 150MW of steam to be used by the power plants in producing electricity,” Ole Nchoe said
The company has also generated more income from consultancy services. Ole Nchoe observed that as regional leader in geothermal technology, drilling and geo-scientific matters, GDC will continue to offer its expertise to countries endowed with geothermal resources in the greater Eastern Africa region.
“The path of profitability is exciting to us. It means that going forward GDC will be able to smoothly meet its financial obligations. This development will also afford GDC more capabilities to undertake bigger and diverse projects.
‘’From the 1950s to 2009 when GDC was established, Kenya had only exploited 167MW of geothermal power out of the vast 10,000MW available potential.
The country has more than tripled the amount of electricity from geothermal sources. Use of geothermal steam to generate electricity has displaced diesel and effectively saved the country huge sums of money in oil imports,” he said.
The country, he observed, is only exploiting 600 MW of geothermal out of a potential of 10, 000 MW.
“Geothermal is our base-load. It‘s the key enabler for the Big4 Agenda and Vision 2030. It’s only with affordable and reliable electricity, such as geothermal, that we can become an industrialised mid-income nation. The injection of additional green energy into Kenya’s Power mix has reduced the cost of power by 22% and 35% for domestic and industrial consumers respectively,” the Chief Executive explained.
GDC began drilling at Menengai site in February 2011 and has so far sunk over 43 wells, 24 of them have been tested giving 165 MW.
The rest of the wells are still undergoing tests. GDC plans to pump an extra 1065MW into the national grid in the next ten years.
The power will be generated from Menengai 465MW, Baringo-Silale 300MW and 300MW from South Rift region as the government seeks more geothermal energy.
“Geothermal energy will be critical in all the fronts because of its affordability. But critically, geothermal energy will drive the agenda of food security and manufacturing. GDC is banking on mining heat from steam to support manufacturing and food security,” noted Ole Nchoe