Johnson Ole Nchoe, Managing Director and CEO, Geothermal Development Company : Interview

Interview : Johnson Ole Nchoe

In what ways can other countries benefit from Kenya’s experience in developing clean energy?

Johnson Ole Nchoe: The development of a long-term strategy such as Kenya’s Vision 2030 is a good example for other countries to follow, enabling them to establish a regulatory framework that helps advance the sector, such as the formation of specific institutions and special economic zones. These kinds of initiatives remove initial risks, channel funds for the development of clean energy, stimulate electricity demand and lower the overall cost of power.

When it comes to international investment in Kenya, foreign expertise and cooperation have provided training, consultancy and advisory services. Independent power producers (IPPs) are mainly overseas companies that participate in the construction of power plants.

In the local geothermal market, foreign expertise from countries with more advanced industries has accelerated the development of the sector in Kenya. The strategy here is to allow the private sector to take up opportunities that have few associated investment risks. This does not, however, negate the participation of local companies.

How can investment in the generation of geothermal energy be made less risky?

NCHOE: In order to attract investment in this area, we have worked to remove the initial risks that are associated with the development of geothermal resources. For example, we have improved our ability to support infrastructure in project areas, enhanced community relations and undertaken exploration studies to identify available geothermal resources. Advanced drilling efforts of potential wells have enabled us to both confirm available resources and generate steam at a ground level to supply power plants. Alongside these works, we have carried out feasibility studies to increase project bankability.

What are the main challenges and risks associated with exploration efforts?

NCHOE: When drilling, the type of geological formation is a potential obstacle because it can slow down exploration efforts. Aside from the physical factors, human resources remain a challenge due to the lack of qualified technical personnel, and lengthy negotiation periods with funding agencies and development partners often delay project implementation. In terms of finances, losses due to fluctuations in currency exchange rates and hikes in commodity prices also negatively affect the time-line for project implementation, while players face persistent problems of inadequate funding.

How do you envisage the role of IPPs in geothermal generation in the coming years?

NCHOE: To increase the share of geothermal power, IPPs will play a big supporting and complementary role in the construction of power plants, and their contribution can be increased by ongoing efforts to further reduce the risk of geothermal exploration. This will result in accelerated development of geothermal power and reduced electricity tariffs.

What is being done to ensure an adequate supply of well-trained staff to the geothermal segment?

NCHOE: At present, the industry has inadequate human capital resources, and there is a need to invest in capacity building through grants from development partners, training for junior geochemists and support for those providing this training. It is important that we actively mobilise resources in order to develop employees’ skill base, which will facilitate subsequent knowledge sharing between staff. The Geothermal Centre of Excellence, for example, is providing development services to expand the sector to the neighbouring countries of Djibouti, Ethiopia, Tanzania, Rwanda and Uganda.