| Abstract |
There is an abundant geothermal resource in the Rift Valley in Kenya, according to the geothermal exploration performed in the region. Currently, two geothermal prospects are undergoing production drilling; two are undergoing exploratory drilling while four geothermal prospects are planned for exploration drilling. Geothermal Development Company (GDC) is the Kenya government state agency spearheading the exploration and development of geothermal resources. Geothermal power plant development takes a long time from the exploration stage until the power plant is operational. This usually puts financial pressure on both the projects and the executing agencies. With the planned geothermal development in Kenya, there’s need to ensure the projects provide the highest benefits to developers and customers by thinking through the economics of the project. Geothermal projects should be feasible by understanding its risks, costs, and benefits. The objective of this work was to determine the viability of portable wellhead power plants (WHU) to accelerate the development of geothermal projects in Kenya before the commercial operation of central power plant. The study specifically focussed on the production drilling, well testing and plant construction and commissioning stages of the project development. A case study of Menengai geothermal field and a hypothetical steam field were used as scenarios where wellhead power plants were installed. The Net Present Value (NPV) method and payback period method based on the net power output were determined using the profitability assessment model. Possible Total Time differences between the production drilling and installation of the central power plants were considered. The study demonstrated that the use of wellhead power plants early in the development of geothermal resources was economically viable only if installed as a long term strategy for early revenue generation, continuous well testing and attracting private investors. The Wellhead units not only increases the NPV of the project but also increases the revenue of the project rather than waiting the construction of large sized conventional power plant with long lead time of around six years. Research results with a wellhead capacity of 5 MW reveals that at electricity prices of $0.088/kWh, the projected net revenue was $4.5 million and $6.3 million for time intervals (TI) of 3.5 years and total time interval (TTI) of 5.5 years respectively. It was also found that a 5MW wellhead unit generates positive Net Present Value of +4 and Internal Rate of Returns of 17% respectively over its economic life but the parameters turn negative over total time interval (TTI=5.5 years). The total capital outlay is estimated at 15 MUSD. This study proposes that there is need to shift focus from the traditional approach of installation of long lead time large conventional plants to a new approach that embraces deployment of short lead time (TTI) small sized portable wellhead plants for accelerated development and maximizing of revenue from green geothermal fields before commissioning of large geothermal plants. |