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Geothermal dominance shrinks to three-year low on shut plant
Kenya Electricity Generating Company PLC (KenGen) Olkaria Geothermal well undergoing tests through discharging in preparations for electricity in this picture taken on February 21, 2025.
A scheduled shutdown of KenGen's oldest geothermal plant in Olkaria for upgrade has cut the dominance of geothermal power in the national grid to a three-year low amid a jump in electricity imports from Ethiopia and improved local hydro-power generation.
Fresh data by the Energy and Petroleum Regulatory Authority (Epra) shows that the share of geothermal power shrank to 39.8 percent in the year ended December 2024, down from 44.6 a year earlier, while the imports nearly doubled and production from dams also grew.
The shrinking of the dominance of geothermal power came following the shutdown of KenGen’s Olkaria 1 plant for a capacity upgrade from 45 to 63 megawatts. The upgrade is set to be completed in December 2026.
Electricity imports from Ethiopia grew, lifting the share in the national grid to 10.41 percent compared to 6.2 percent in December 2023 while hydro-power grew to 24.7 percent from 22.5 percent in the same period.
“Geothermal sources accounted for 39.81 percent of the total generation in the review period, down from 44.55 percent in a similar period last year.
“This can be attributed to the shutdown of the 45-megawatt Olkaria 1 power plant for rehabilitation and an increase in electricity imports from Ethiopia,” says Epra.
Olkaria 1 was the first geothermal power plant to be built in Kenya and generated the first units of electricity in 1981. It is one of the plants and wellheads owned by KenGen, which supplies electricity to Kenya Power.
KenGen awarded a Chinese firm, SEPCOIII Electric Power Construction Co Limited a multi-billion deal to upgrade Olkaria 1.
Geothermal has for years been the mainstay of the national grid but Kenya has been growing the amount of electricity imported mainly from Ethiopia, in a bid to avert power outages amid a growing demand.
The dominance of geothermal power, increased imports from Ethiopia and hydro-power production have been key to averting a spike in electricity prices tied to the use of thermal plants.
Locally-generated hydro is the cheapest source of electricity at an average cost of Sh3.83 per followed by geothermal and Ethiopian imports at Sh10.28 a unit and Sh10.69 a unit respectively.
Modernisation of the plant is one of KenGen’s key measures to significantly increase the amount of electricity supplied to Kenya Power, further cementing its dominance in the national electricity generation mix.
KenGen is also set to upgrade Olkaria IV and Olkaria 1 Unit IV and V, as part of a wider plan to push the total installed capacity of its geothermal plants beyond the current 799MW.
