2011 Annual Report & Financial Statements - Kengen

Sustainability
KenGen
KenGen
42
2011 ANNUAL REPORT & FINANCIAL STATEMENTS “From Generation to Generation (continued)
2011 ANNUAL REPORT & FINANCIAL STATEMENTS
43
10. Carbon Credits
The Clean Development Mechanism (CDM)
KenGen is the pioneer Company in the Clean Development Mechanism (CDM) project development process in the country. The
objective of the CDM is to assist industrialized countries meet their emission reduction commitments cost-effectively and help
developing countries invest in clean energy projects and achieve sustainable development, thereby contributing to the global effort
to stem climate change. This is also in line with Kenya’s Vision 2030’s objective of achieving sustainable development through clean,
renewable energy.
The 35MW Olkaria II Geothermal Expansion Project is KenGen’s first registered CDM project. It was registered on 4th December
2010 and the expected annual carbon credits/Certified Emission Reductions (CERs) from the project are 149,000tonnes of
carbon dioxide emissions (tCO2e).The credits will be purchased by the Community Development Carbon Fund (CDCF) of the
World Bank.
KenGen already received an advance payment for the Olkaria II CDM Project in June 2011 and is the first Company in Kenya to
receive carbon revenue from a CDM Project. Ten percent of the total carbon revenue will be used for community projects which
include water, health and education.
Other CDM projects in the pipeline:
Project
Expected Annual CERs
20MW Re-development of Tana Hydropower Project 29,000tCO 2
e
20MW Optimisation of Kiambere Hydropower Project 29,000tCO 2
e
5.1MW Ngong I Wind Power Project
29,000tCO 2
e
280 MW Geothermal in Olkaria Early stage of CDM development
The Company will continue developing renewable energy projects under the CDM hence displacing fossil-based electricity
generation.
11. Resource Optimisation
KenGen is keen on managing the available energy production resources for sustainability. This includes optimisation of geothermal
generation through maximisation of steam usage. After an optimization study was carried out to determine the potential of
geothermal resource in the Olkaria I field, it was established that there was potential for an additional capacity of 140MW. As a
result, KenGen has realised a new opportunity to put up a 140 MW Plant.
The Company also re-injects brine back to the steam field for re-use in power generation.
In Hydro Power Plants, the Company carries out catchment conservation activities to minimize siltation in the dams. In addition to
rehabilitating and upgrading hydro-plants to optimise generation using the available water resources.
The Company has also embarked on a rigorous exercise to review its operational process in order to optimise costs and eliminate
wastage.
To leverage on information technology and create efficiency, KenGen implemented the SCADA system to operate and monitor
power stations. This has resulted in optimising human resources.