Kenya to build Africa鈥檚 largest wind project
Kenya is planning to build the largest wind project on the continent of Africa. If the project delivers as promised, it would allow the country to spend less in fuel costs each year and allow its population more access to electricity.
Kenya is planning to build the largest wind project on the continent of Africa. If the project delivers as promised, it would allow the country to spend less in fuel costs each year and allow its population more access to electricity.
Kenya may soon be home to the largest wind project on the continent of Africa.
Danish wind company Vestas聽won a contract聽to provide 365 turbines for a 310 megawatt wind power project in Kenya.聽The Lake Turkana Wind Power聽project will be the largest of its kind in Africa, and is expected to generate 15-20 percent of Kenya鈥檚 electricity needs when completed. According to project developers, the site is a聽unique location聽that is favorable for wind. It is situated at high altitude (2,300 meters), and has consistent and predictable wind patterns.
If the project sticks to its schedule, it could have 50 to 90 megawatts up and running in 2015, with full completion by 2016. Backed by loans from the African Development Bank, the more than US$800 million Lake Turkana Wind Power project is expected to be Kenya鈥檚聽largest private investment ever.
Kenya produces almost no oil or natural gas, and has to import the fossil fuels that it needs. The wind project will allow the country to avoid paying聽$186 million聽in fuel costs each year.(Related:聽Emerging Energy Trends In Africa)
The project is also critical because just 18 percent of Kenya鈥檚 population has聽access to electricity, while most Kenyans use biomass 鈥� wood, manure, and charcoal 鈥� for heating and cooking.
鈥淲e are very pleased to continue this great journey with Vestas as we progress toward our aim of reducing Kenya鈥檚 need for hydro and expensive fossil fuel-based power generation,鈥� Mugo Kibati, the Chairman of Lake Turkana Wind Power,聽said in a statement. 鈥淲e want to ensure that Kenya has access to low and consistent power prices, and with the Lake Turkana Wind Power Project, we can do that.鈥�
The development of wind does not preclude Kenya鈥檚 drive for oil and gas development, however. The country is pursuing both wind and fossil fuels in an effort to develop energy supplies.
In fact, the Kenyan government is laying out ambitious plans to beef up infrastructure in an effort to kick start its oil and gas industry. The motivation comes from a 2012 discovery by British oil exploration company Tullow Oil. Tullow believes it is sitting on聽600 million barrels of oil.
With these substantial reserves, other oil and gas companies have rushed in, hoping to book some major discoveries in a region that has yet to be fully explored. On December 15, a small oil exploration company called Taipan Resources聽signed up a rig contractor聽to drill on territory that it expects is holding around 251 million barrels.
And it is not just small oil companies that have flocked to Kenya. Much bigger ones like Anadarko, BG Group, Total, and Eni are considering drilling plans.
The Kenyan government鈥檚 stated priority is to build up natural gas production to provide more electricity for the country, and export any excess production.(Related:聽Africa and Belgium Generate the Same Amount of Electricity 鈥� But That鈥檚 Changing)
But all of the interest in Kenya鈥檚 oil and gas potential may evaporate given the recent decline in oil prices. Tullow has had to聽slash its exploration budget, and said that its long-term plans in Kenya could be derailed if聽oil prices stay below聽$70 per barrel. As an unexplored and relatively unknown oil region, Kenya does not rank high among the oil industry鈥檚 priorities.
Oil and gas investments are highly sensitive to the price of oil, which makes them risky when oil markets start to go haywire. And for national governments, the problems can be even worse. Gyrating prices can wreak havoc on government revenues. Nigeria and Angola have seen their聽currencies deteriorate聽as oil prices have fallen, and Ghana is聽working with the International Monetary Fund聽on financial aid as it deals with huge budget woes because of low oil prices.
But wind power does not have such problems. For Kenya, the Lake Turkana Wind Power project was deemed to be the least costly form of electricity, and is likely to be 60 percent聽cheaper聽than fossil fuel power plants. And with zero fuel costs when in operation, it won鈥檛 suffer from the price volatility.
If the project delivers as promised, there may be more like it to follow.
By Nick Cunningham of Oilprice.com
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