Power firm starts Sh11bn Nairobi to Mombasa line

Workers arrange imported steel to build power transmission towers for the Ketraco project. The Mombasa-Nairobi line is expected to ease outages. Githua Kihara 

By GITHUA KIHARA  (email the author)

Posted  Thursday, December 1  2011 at  00:00

State-owned electricity transmitter Ketraco has started construction of a Sh11 billion Mombasa-Nairobi power line that will have capacity to handle 1,500 mega watts of power— which is more than Kenya’s total installed capacity.

Indian based engineering firm, Kalpataru Power Transmission Ltd, which is working on part of the 450 kilometre transmission line, has already built 25 foundations for transmission towers that will be erected from mid next month.

The project, which is one of about 23 others that the Kenya Electricity Transmission Company (Ketraco) is undertaking around the country, is expected to be completed by mid next year.

“This is our biggest project so far, but we have many others going on around the country,” said Joel Kiilu, chief executive of Ketraco.

The power transmission firm was hived-off from Kenya Power to exclusively build infrastructure for high voltage electricity transmission.

Kenya Power retained the role of a power distributor in charge of smaller voltage lines for connecting end-users. The Mombasa-Nairobi line will be used to transmit up-country high voltage power generated from the coast. There are plans to set up a 300MW coal plant in Mombasa, which is also home to thermal power generation plants at Kipevu and Rabai.

Location of thermal generators at the coast will cut transportation costs incurred by in-land based diesel power producers, potentially benefiting consumers through cheaper electricity tariffs.

“It will be cheaper and easier to generate power at the cost and transmit it through this line,” said Mr Kiilu. Funding for the projects has been sourced from the Treasury, European Investment Bank, French Development Bank (ADB), Africa Development bank (AfDB).

The project will also include the construction of new transmission lines from Isinya to Embakasi substation in Nairobi and the expansion of the Rabai and Embakasi substations. A new sub-station will be constructed at Mariakani on a 200 acre land that Ketraco has already acquired from local authorities.

The two existing lines in use today have limited transfer capacity of 100 MW, limiting the capacity to generate power from the Coastal region.

About three power generation plants with a combined capacity of 290 MW are planned to start generation by the time the transmission line is built

“The Mombasa-Nairobi transmission line project is central to the country’s power infrastructure development plan since future thermal plants will be installed in Mombasa area near the port facilities,” said Raphael Mworia, Ketraco corporate communications manager.

The current peak electric power demand is estimated at 1,180 MW and it is projected to grow at 7 per cent annually over the next 10 years, to reach 2,263MW by 2018.

A feasibility study on the establishment of a 300 MW coal power plant in Mombasa shows that the plant will require 0.9 to 1.1 million tonnes of coal per year, all of which will be landed at the Mombasa port and transported to the power station. 

Courtesy of Business Daily

Botswana eyes more electricity generation

Tue Nov 29, 2011 11:38am GMT

* To add 1,200 MW to national grid by 2017

GABORONE Nov 29 (Reuters) - Botswana plans to add 1,200 megawatts (MW) of electricity to its national grid in the next six years as the diamond rich country battles to address power supply shortages, a senior government official said on Tuesday.

Boikobo Paya, Permanent Secretary in the Energy Ministry, said that in addition to the 600 MW power station to be commissioned in 2012, two other 300 MW power stations to be built by Independent Power Producers (IPP) should kick into the national grid by 2017/18.

"On top of the Morupule B power station which will add 600 MW to national supply next year, we expect a brownfield power station consisting of two 150 MW units to be built through IPPs by 2015/16," Paya told an energy conference.

He added: "Another 300 MW greenfield power station is also expected to be built by independent producers by 2017/18."

Botswana has only one power station, Morupule A plant, which produces 120 MW, with the remainder of its power needs, about 80 percent, being imported mainly from South Africa.

The first phase of $1.5 billion Morupule B power station is expected to be commissioned by March 2012.

In anticipation of the higher demand for coal from the power plants, plans are under way to increase production at the country's only coal mine, Morupule Colliery, from 1.2 million tones per annum to 2.8 million tonnes.

Botswana has coal reserves estimated at 212 billion tones, but only one operating mine. Three companies, CIC Energy, African Energy and Aviva Corporation, have expressed intentions to open new mines for both local use and exports.

Government officials said at the conference that there are currently 190 coal and coal bed methane prospecting licences issued to 43 companies, mostly from Australia and China. (Editing by Olivia Kumwenda)

Courtesy of Reuters

Tanzania: Symbion injects 60MW to grid

Monday, 28 November 2011 22:56

By Sylivester Ernest The Citizen Reporter Dar es Salaam. US-based energy firm Symbion Power has added 60MW into the national grid in its emergency power plan. The power has been connected to the grid from the company’s plant in Dodoma.The move would most likely relieve millions of Tanzanians from the prolonged power rationing that has been the norm for more than a year now. Under the government-driven emergency power plan, key private partners - - Symbion Power, National Social Security Fund (NSSF) and Netherlands energy firm Aggreko have been assigned to assist the government in adding a total of 572 MW to the national power grid by the end of December this year. Symbion alone has been assigned to contribute a total of 205MW. Briefing reporters in Dar es Salaam yesterday, Symbion Power-Dodoma Project manager Don Brindle said construction and installation of the company’s 60MW plant, in the context of government’s emergency-comprehensive power plan, has been completed in Dodoma, and that power had already been connected to the national grid. "Power connection to the national grid was done on Sunday (last week)," Mr Don Brindle said. According to Mr Brindle, Symbion’s 60MW facility which arrived in the country from Dubai recently is expected to deliver a continuous supply of 50MW directly to the Dodoma network. “This will help to alleviate the severe power shortages that the country has faced this year…it would really help to relieve Tanzanians from the burden of prolonged power blues,” he said. The construction and installation of Symbion’s 60MW generators, he explained, took around two weeks since they arrived in Dodoma.He told reporters further that his site team had worked around the clock to get the power connected and that he was pleased that everything had gone according to plan. The official noted that Symbion's next task for the government would be to build another plant (150MW) in Arusha, observing that site preparation work was expected to commence within a week. Courtesy of thecitizen.co.tz

UK's Durham Crematorium May Sell Body Heat To Great Britain's National Grid

The Durham Crematorium plans to sell it's excess energy to Great Britain's National Grid.

First Posted: 11/28/11 04:34 PM ET Updated: 11/28/11 04:34 PM ET

Bringing new meaning to the term "body heat," a UK crematorium is hoping to make some extra cash by selling energy produced during the cremation process.

If all goes as planned, the Durham Crematorium will install turbines in two of its burners and sell the excess energy to Great Britain's National Grid, The Telegraph reports.

A third burner will continue to warm the site's chapel and offices.

Engineers estimate that each turbine can generate 250 kilowatt-hours, enough electricity to power 1,500 televisions, according to The Daily Mail.

While the proposition may seem a bit morbid, the crematorium insists that most of the energy will come from gas used during the cremation process, with a negligible amount coming from the actual bodies. In addition, the innovations will help address mercury emissions escaping into the atmosphere, a common problem in UK crematoria.

"Apart from it being common sense for us to try to conserve energy, it also enables us to keep the fees down," crematorium superintendent and registrar Alan Jose said, according to The Northern Echo.

"If there is genuine spare capacity to generate electricity then we are certainly interested in investigating that. And if it was thought to be acceptable in the eyes of the public we would almost certainly pursue that," Jose added.

The Durham Crematorium wouldn't be the first facility to repurpose its excess heat. According to a Jan. 25 article from The Telegraph, the Borough Of Redditch Cemeteries & Crematorium is commissioned to use its excess energy to heat a swimming pool at nearby Abbey Stadium Sports Centre.

Ireland: Financing system operator preferred connection method in contestable builds

November 28 2011

Introduction

On October 26 2011 the Commission for Electricity Regulation (CER) issued a important decision paper(1) that should be reviewed by anyone that is considering a contestable build of connection works(2)to connect its generation assets to the distribution or transmission system.(3)

Sections 34(1)(A) and 34(1)(B) of the Electricity Regulation Act 1999 (as amended) confer on generators the right to construct all or part of their connection to the transmission system and the distribution system. A party typically opts for a contestable build in order to ensure that the connection works are carried out more quickly than would typically be the case if constructed by ESB Networks Limited or EirGrid plc.

The purpose of Consultation Paper CER/11/027, which is entitled "Consultation on Financing of the System Operator Preferred Connection Method in Contestable Builds", is to set out proposals by EirGrid plc and ESB Networks Limited to overcome issues faced by independent power producers(4) when choosing the contestable build option (ie, where they carry out the connection works themselves, rather than the relevant asset owner (ie, EirGrid plc or ESB Networks) doing so, which is the default 'non-contestable' scenario), and when the connection method specified by the system operator results in costs greater than the 'least cost chargeable' or 'least cost technically acceptable' connection method, thus imposing an additional financing burden on the independent power producers.

Position prior to decision

Contestable builds For a contestable connection built by the independent power producer where the system operator specified a connection method greater than least cost chargeable/least cost technically acceptable, the approach prior to the new CER decision paper was that the transmission asset owner or distribution asset owner, on behalf of the use-of-system customer, would be responsible for paying these extra costs to the independent power producer.

Previously, those extra costs would be paid following the satisfactory completion of the connection in line with the system operator's specification, and after the asset had been transferred to the asset owner (ie, the distribution asset owner or the transmission asset owner) and the extra costs added to the regulated asset base.(5)

Prior to the decision, no advance payments or stage payments were made by the relevant asset owner to the independent power producer.

Where a connection method greater than least cost chargeable/least cost technically acceptable had been specified by the system operator, independent power producers(6) had two concerns with respect to those extra costs. They were concerned that:

• a higher amount of borrowing for the additional Capex would be required; and
• a financing cost would be incurred in relation to the extra capital raised.

The paper set out the options with regard to how the independent power producer could be assisted in relation to those concerns, without any adverse impact on the use-of-system customer.

Non-contestable builds

A 'non-contestable build' is one which is carried out by the relevant asset owner itself. The independent power producer always retains the right to opt for a non-contested connection (in which case only the regulatory approved rates for the least cost chargeable/least cost technically acceptable will be payable). However, the independent power producer may opt for a contestable build to ensure that the connection works are carried out more quickly than would typically be the case if constructed by the relevant asset owner.

The position with respect to non-contestable builds (which remains unchanged following the decision) is as follows:

• Assets are added to the regulated asset base as they are built. The use-of-system customer incurs tariffs that reflect the return and deprecation of the extra costs of the connection which are added to the regulated asset base on an as-incurred basis. In practice, this will typically mean additions to the regulated asset base over a number of years until project completion.
• The independent power producer is not required to obtain finance or incur any financing cost for the incremental cost of the connection over and above the least cost chargeable/least cost technically acceptable requirements.

Decision

In making its decision, the CER sought to balance the interests of system operators and independent power producers, while leaving the use-of-system customer in a position of neutrality as to whether works are completed contestabily or non-contestabily.

The CER made decisions in relation to the following areas:

• stage payments;
• standard or vouched costs for transmission build;
• financing costs; and
• threshold of the scheme.

Stage paymentsStaged payments at certain intervals will be provided to independent power producers where system operator specified 'overbuild' is required in a contestable project (ie, where the costs are greater than the least cost chargeable or least cost technically acceptable connection method). System operator or asset owner engineer sign-off will be required before payment is made to the independent power producer to ensure that the work carried out is in line with system operator specifications and standards.

The format of the staged-payment structure is outlined in the table below. The relevant asset owner will provide payments for works in excess of the least cost technically acceptable or the least cost chargeable at particular stages, which will be passed to the relevant system operator, which will then disburse this to the independent power producer.

At the start of a project, the relevant asset owner will also provide to the independent power producer a clear written undertaking demonstrating its obligation to pay moneys for the satisfactory completion of certain stages of the build. It is intended that this should afford comfort to financiers providing the additional capital funding to the independent power producers.

If required, provisions will be drafted in to the relevant connection agreement to facilitate sign-off by the system operator and asset owner at each milestone.

Timing of staged payment	Level of staged payment	System operator/asset owner engineer sign-off required for payment
At completion of civil works	20% of expected standard charges > least cost technically acceptable or least cost chargeable	Yes
At completion of installation of electrical assets	30% of expected standard charges > least cost technically acceptable or least cost chargeable	Yes
At project completion (full commissioning) and post asset transfer to asset owner	50% of expected standard charges > least cost technically acceptable or least cost chargeable	Yes

Financing costsPayment in respect of the financing costs will be made at the regulated CER-approved cost of capital(8)(in nominal terms) and at the same intervals (as shown in the table) when the principal payments for the overbuild elements of the connection works are being made.(9)

However, as the cost of capital provided for by the CER is measured in real (ie, non-indexed) terms, the interest payable would be adjusted for the rate of general price inflation (ie, according to the harmonised index of consumer prices) pertaining at that time. Under this methodology, inflation is applied to the interest rate and interest is compounded with interest applied to the interest accrued to date.

The amount payable to the independent power producer in respect of the interest will be calculated in accordance with the following formula:

Interest payable = [(1+ regulated approved cost of capital) x (1+ applicable harmonised index of consumer prices)] x assumed amount of principal overbuild expended

Financing costs, like staged payment, will not be paid until sign-off is received by the system operators and asset owners.

As noted above, at the start of a project the system operators will also provide the independent power producers with a clear written undertaking demonstrating the asset owner's obligation to pay moneys (including financing costs) for the satisfactory completion of certain stages of build. This should provide comfort to financiers that are providing the additional capital funding to independent power producers.

Scheme threshold The threshold payments for overbuild will be made available to independent power producers where additional capital costs exceed €250,000 or 5% of capital outlay.

For further information please contact Garret Farrelly or Michael O'Connor at Matheson Ormsby Prentice by telephone (+353 1 232 2000), fax (+353 1 232 3333) or email (garret.farrelly@mop.ie ormichael.oconnor@mop.ie). 

Courtesy of www.internationallawoffice.com 

Kenya Geothermal Conference 2011 Held

                                

A two day conference organised by Geothermal Association of Kenya (GAK) brought together over 300 delegates from around the world to seek ways of accelerating geothermal to be the dominant energy source in the East African region. 

Amongst other deliberations, participants sought ways and means to unlock geothermal resource's potential was in financing through local and international investors by tapping the resource that is available on numerous African Nations along the Great Rift Valley. 

Held between 21-22 November, 2011 one of the conference outcomes was the formation of the East Africa Geothermal Association. GAK was requested to extend secretariat services to the new body in the meantime. The body was also charged with the responsibility of organising the African Region Geothermal Organisation (ARGEO) Conference in Nairobi next year. 

The conference was officially opened by H.E. Vice-President, Hon. Kalonzo Musyoka and closed by Ministry of Energy Assistant Minister Hon. Amb. Eng. Mohamed M. Mahamud. 

KETRACO Ag. MD, Agnes Ongadi made a presented tilted "Strategies for evacuation of geothermal power from Kenya’s geothermal prospects" which was well received and outlined ways of evacuating power from future geothermal generators to the load centres around the country. 

Report by Raphael Mworia

Kenya Moves Full-Steam Ahead on Geothermal Production

Cathy Majtenyi | Menengai, Kenya

Kenya is expanding plans to become one of the world’s top geothermal power producers with the start of explorations at a site called Menengai. The government is also aiming to make geothermal Kenya’s main power source.

Menengai, in Kenya’s Rift Valley, may hold the clue to boosting the country's electricity production.

Kenya is already Africa’s largest producer of geothermal power. It was the first country on the continent to drill for geothermal energy.

Last year, the International Geothermal Association ranked Kenya as the world’s 10th largest producer of geothermal power, calling the country’s potential “massive.” But that was before the first well opened at Menengai earlier this year.

Ruth Musembi, public relations manager at Kenya's Geothermal Development Company, says explorations so far are exciting.

“When you get the first well being eight megawatts, then that tells you something," she said. "The second well which has discharged - the temperatures are very high, they are almost over 300 degrees. That tells you that this is not an ordinary geothermal field. It’s going to be a major, major breakthrough for this country in terms of electricity.”

Experts estimate that the site alone contains some 1,600 megawatts, or about 300 megawatts more than Kenya’s entire energy use.

The first phase of the Menengai Geothermal Project is expected to contribute 400 megawatts to Kenya’s power grid by 2016, an increase of 30 percent.

Geothermal energy comes from the earth’s core, made up of molten rock, or magma. Temperatures there are extremely high. In some areas, the magma is closer to the earth’s surface, heating up layers of rock that contain pores of water. Some of this water rises to the surface in the form of hot springs and geysers.

Steam is trapped within the rock layers and can be accessed through drilling. The steam is then harnessed to produce electricity.

Africa’s Rift Valley is an ideal location for geothermal energy.

“Basically, you can drill for geothermal anywhere, but it will be very expensive because we’ll have to drill very far down," explained Ruth Musembi. "But in the Rift Valley, the heat has come closer to the surface, so when you drill about two-and-a-half [or] three kilometers, you are able to get the heat source. In other places, probably you will go many kilometers.”

Kenya’s Rift Valley contains 14 geothermal sites. Officials estimate that there are between 7,000 to 10,000 megawatts of potential geothermal energy in Kenya.

Hydro-electricity has long been Kenya’s primary power source. But massive deforestation and other factors have led to decreasing rainfalls and the drying up of rivers and lakes, making hydroelectric power less of an option.

Kenyan Vice President Kalonzo Musyoka told a recent conference in Nairobi that increasing the use of geothermal power is key to Kenya’s development.

“Power produced from geothermal resources is a sure means of improving our peoples’ quality of life," he said. "Besides, with the Kenya Vision 2030 angling for an industrialized economy, novel sources of electric energy must be found in order to power factories and processing lines.”

Currently, more than 80 percent of Kenya’s population does not have access to electricity.

Report Courtesy of www.voanews.com

See pictures of the Official Opening here

Saudi Electricity Signs Three Contracts Valued at $146 Million

By Mourad Haroutunian - Nov 27, 2011 3:15 PM GMT+0300More

Saudi Electricity Co. (SECO) signed three contracts valued at 546 million riyals ($146 million) to build power transmission lines and a transformer station in Riyadh and the Eastern Province, the state-owned utility said in an e- mailed statement.

One of the contracts, valued at 193.2 million riyals, is to build a transformer station in Jubail’s second industrial city within 29 months to provide electricity to the Sadara chemical joint venture being built bySaudi Aramco and Dow Chemical Co.

Courtesy of www.bloomberg.com