CDM projections for Kenya : towards a green geothermal economy - the case of Olkari and Menengai geothermal power projects

Abstract

The current climate-energy concerns and effects have resulted in shifting developmental perspectives towards clean development mechanisms (CDM). Sustainable economic development has its roots in clean energy development. The 1997 Kyoto protocol, a legally binding instrument, implemented the CDM for the first commitment period, 2008-2012, as investments by Annex I countries in non Annex I countries to foster emission reductions and sustainable development. Developed nations fund ‘green’ projects in developing nations and gain Certified Emission Reductions to achieve their emission reduction targets. In the energy sector, several renewable environmentally friendly projects like geothermal have qualified under the CDM, with less green house gas emissions. Geothermal energy projects are environmentally benign and, globally, about nine projects are registered with the United Nations Framework Convention on Climate Change (UNFCCC), accruing CDM benefits. Kenya, with a current energy deficit of about 8% per annum, is in the process of expanding existing energy resources with a focus on clean renewable energy. Hydropower yields most of the energy but has been unreliable due to unpromising hydrological conditions. Contributing about 12% of installed capacity, geothermal energy presents a potential in excess of 7000 MWe along the Kenyan Rift Valley, and the thrust to develop 5000 MWe by the year 2030.

Although a high initial capital investment is required, CDM could help unlock this potential. Three 140 MWe geothermal power plants are envisaged: Menengai I, Olkaria IV (Domes) and Olkaria I (Units 4 and 5) between the years 2012 and 2014. This report examines the CDM potential for the three projects and the estimated emission reductions upon implementation of each project. The Approved Consolidated Methodology ACM0002 version 12 was used in the computation of the emission reductions. Upon registration under the CDM, various environmental, economic and social benefits are expected. This achievement is anticipated to ensure both intra and inter-generational equity.