| Title | Operational Cost Optimization by Building Internal Capacity |
|---|---|
| Authors | Gideon GITONGA |
| Year | 2020 |
| Conference | World Geothermal Congress |
| Keywords | Outsourcing, Internal Capacity, Under generating, Olkaria, Revenue loss |
| Abstract | For a long time design and construction of steam gathering systems were contracted services. Institutional inertia and bureaucracies of public companies like Kenya Electricity Generating companies made the process of outsourcing those services a prolonged process involving tendering and the assignments were carried out mainly by international firms at very high costs. Following several capacity building initiatives like specialized trainings for staff and procurement of specific design software, internal capacity was built to a level of undertaking such design and construction tasks. This paper reviews a case of operational cost optimization by utilizing internal capacity and resources to connect a makeup well to one of the under generating wellhead power plants. KWG-15 is one of the 15 wellhead units installed by Green Energy Group (GEG) in Olkaria geothermal field. The production properties of well OW-39 originally connected to KWG-15 were not optimal for the plant to generate full load. The plant was generating 1.8MW, about 30% of its installed capacity of 5.5MW with frequent well collapses that led to total outages of the plant. This had become a source of major revenue loss to the company. It was essential to connect another well with suitable production characteristics to boost up the plant generation. OW-39D drilled about 240 meters from the plant had the appropriate production characteristics. Construction activities to connect the well commenced in May 2018 and in September 2018 the project was successfully commissioned bringing the plant output up to 5.1MW. The total cost of the project was KES 12.9M. The project cost was cut down by more than 75% compared to what would be expected had the project been designed by a consultant and executed by a contractor. |