Lake turkana wind power

#1
https://www.standardmedia.co.ke/bus...gy-ps-we-will-not-pay-lake-turkana-wind-power

This subject was posted here some time back. Apparently we owe them zilch as they are also not ready to produce power.

Energy PS: We will not pay Lake Turkana Wind Power for transmission line delays
By Macharia Kamau
Published: Nov 14th 2016 at 22:00, Updated: Nov 14th 2016 at 22:00
Marathon runners in action at the the Lake Turkana Wind Power Project with turbines towering over them at Turbine 15 in Loiyangalani District, ,Marsabit County over the Weekend. Photo by JOE OMBUOR.
“We do not have to pay the generator if the delay has been caused by factors that are beyond our control. It is the same way we would not penalise the company if there were delays on their end caused by reasons that were unavoidable,” said Njoroge in an interview.
He also said the firm is unlikely to be ready to start power production in December, contrary to what LTWP said. “I was on site last Tuesday and I can tell that they are not ready to start power production by December,” said the Energy PS.
The delays in constructing the line, according to Njoroge, had been caused by a lengthy land acquisition process, where the National Land Commission has faced challenges in acquiring way leaves for the transmission line.
He said, the 428-kilometre double circuit 400kv line traverses several counties and touches land owned by many different individuals, which has resulted in land acquisition negotiations taking long. He also noted that the speed the contractor has been moving with has also caused delay.
Issue a statement
Njoroge added that the transmission line will be ready by April next year, before June, when the power plant is expected to feed the entire 310MW to the national grid. He also said the Ministry is in talks with LTWP to ensure that the two get an agreement that works for the Government, power consumers and the company.
“We are in discussions on the way forward and plan to conclude these talks as soon as possible but before the firm can send the first bill,” he said.
Lake Turkana Wind Power General Manager Phylip Leferink said the firm will be ready to start generating the first 102MW by December. “We will be ready to start power production by December but the transmission line is not ready yet, which is a challenge that we have,” he said.
He, however, declined to comment on the billing to Government by the company but only said LTWP is in discussions with the Ministry of Energy and would issue a statement when the discussions are concluded.
The company has a 20-year deal to sell electricity at Sh8.6 per kilowatt/hour (kWh) to Kenya Power. This is lower than the Sh11 set in the feed-in-tariff for power generated through wind and almost half of what thermal power plants charge.
An insider privy to the agreement, however, noted that LTWP has obligations to its financiers and needed to start repaying the loans. The firm also has operational and maintenance costs, which the investors are probably no longer willing to foot and hence has to start generating some revenue to cover these.
The project is being put up at a cost of Sh70 billion. The money was provided by a consortium of financiers led by the African Development Bank (AfDB) and it is a mix of both debt and equity. The provisions of getting the debt included in the agreement that the Government would guarantee against the risk of delay in transmission line.
Should LTWP start billing the Government in January, the Government is likely to pass this on to consumers. A modest industry estimate puts the amount that the consumers are likely to pay as penalty for the delay at Sh700 million per month, a substantial amount, considering the monthly power bill is already loaded with other items like foreign exchange and fuel surcharges that usually have the effect of pushing up the amount Kenyans have to pay for electricity.
The penalties from Lake Turkana Wind Power are not the only thing that consumers should be worried about. The plant is among the many that are planned to start feeding into the electricity grid over the next few years. Ordinarily this would be a good thing but the challenge has been slow growth in demand for power. Whether there is demand or not, consumers will have to pay to sustain the new plants.
In addition to the 310MW from the Marsabit wind firm, there are a host of other generators that plan to start feeding into the grid in over the next four years.
These include KenGen that plans to add some 720MW by 2020, Amu Power that is set to start generating 960MW from coal in Lamu, a planned joint venture between Kenya and China that will generate 350MW from geothermal as well as a host of other power plants that are scheduled to come online over the next few years.
These are mostly from renewable or cheap sources. Currently, the installed capacity stands at about 2,333MW, against a peak demand of about 1,600MW as of December 2015. This means that when every consumer, even the heavy industrial consumers, is switched on, the country has a reserve capacity of more than 600MW.
While the excess power guarantees continued power supply even when some plants are out in cases of emergencies or repair and maintenance, the planned additional power might mean having excess capacity and in turn the bills will stay high.
Diesel plants
Ministry of Energy and Petroleum Cabinet Secretary Charles Keter said there are plans to retire diesel fired thermal generators and hence the new capacity from the renewable sources will come in handy. “There is demand for the new capacity that is coming on board.
You will note that all of the new capacity is from cheap sources. We still run some diesel plants that are generating over 900MW and need a lot of power to replace the diesel plants, which are expensive. Once we have adequate cheap power, we can step down those that are very expensive,” said Keter.
He spoke last Tuesday when he signed an agreement with Chinese firm CNPC which will partner with KenGen and Geothermal Development Company (GDC) in putting up geothermal power plants.
This would imply that more installed capacity from cheap power sources would result in lower bills. This might however not be the case. If this power is not consumed because capacity exceeds demand by a substantial margin, the cost of sustaining the power plants is still passed on to the consumer.
Power purchase agreements signed between the Government and power producers provide for payment even in instances where they are not feeding electricity to the grid.
Such contracts typically run for a period of between 20 and 25 years, which is deemed adequate time for the producers to recoup their investments, make a margin and give value to power consumers.
While the contracts cushion the producer, they put pressure on the consumer over a long period of time, who have to foot the bill for the producers even when they are dormant.  Share  Tweet  
Energy
Lake Turkana Wind Power
General Manager Phylip Leferink
 

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Energy PS: We will not pay Lake Turkana Wind Power for transmission line delays



Marathon runners in action at the the Lake Turkana Wind Power Project with turbines towering over them at Turbine 15 in Loiyangalani District, ,Marsabit County over the Weekend. Photo by JOE OMBUOR.


“We do not have to pay the generator if the delay has been caused by factors that are beyond our control. It is the same way we would not penalise the company if there were delays on their end caused by reasons that were unavoidable,” said Njoroge in an interview.

He also said the firm is unlikely to be ready to start power production in December, contrary to what LTWP said. “I was on site last Tuesday and I can tell that they are not ready to start power production by December,” said the Energy PS.

The delays in constructing the line, according to Njoroge, had been caused by a lengthy land acquisition process, where the National Land Commission has faced challenges in acquiring way leaves for the transmission line.

He said, the 428-kilometre double circuit 400kv line traverses several counties and touches land owned by many different individuals, which has resulted in land acquisition negotiations taking long. He also noted that the speed the contractor has been moving with has also caused delay.

Issue a statement

Njoroge added that the transmission line will be ready by April next year, before June, when the power plant is expected to feed the entire 310MW to the national grid. He also said the Ministry is in talks with LTWP to ensure that the two get an agreement that works for the Government, power consumers and the company.

“We are in discussions on the way forward and plan to conclude these talks as soon as possible but before the firm can send the first bill,” he said.

Lake Turkana Wind Power General Manager Phylip Leferink said the firm will be ready to start generating the first 102MW by December. “We will be ready to start power production by December but the transmission line is not ready yet, which is a challenge that we have,” he said.

He, however, declined to comment on the billing to Government by the company but only said LTWP is in discussions with the Ministry of Energy and would issue a statement when the discussions are concluded.

The company has a 20-year deal to sell electricity at Sh8.6 per kilowatt/hour (kWh) to Kenya Power. This is lower than the Sh11 set in the feed-in-tariff for power generated through wind and almost half of what thermal power plants charge.

An insider privy to the agreement, however, noted that LTWP has obligations to its financiers and needed to start repaying the loans. The firm also has operational and maintenance costs, which the investors are probably no longer willing to foot and hence has to start generating some revenue to cover these.

The project is being put up at a cost of Sh70 billion. The money was provided by a consortium of financiers led by the African Development Bank (AfDB) and it is a mix of both debt and equity. The provisions of getting the debt included in the agreement that the Government would guarantee against the risk of delay in transmission line.

Should LTWP start billing the Government in January, the Government is likely to pass this on to consumers. A modest industry estimate puts the amount that the consumers are likely to pay as penalty for the delay at Sh700 million per month, a substantial amount, considering the monthly power bill is already loaded with other items like foreign exchange and fuel surcharges that usually have the effect of pushing up the amount Kenyans have to pay for electricity.

The penalties from Lake Turkana Wind Power are not the only thing that consumers should be worried about. The plant is among the many that are planned to start feeding into the electricity grid over the next few years. Ordinarily this would be a good thing but the challenge has been slow growth in demand for power. Whether there is demand or not, consumers will have to pay to sustain the new plants.

In addition to the 310MW from the Marsabit wind firm, there are a host of other generators that plan to start feeding into the grid in over the next four years.

These include KenGen that plans to add some 720MW by 2020, Amu Power that is set to start generating 960MW from coal in Lamu, a planned joint venture between Kenya and China that will generate 350MW from geothermal as well as a host of other power plants that are scheduled to come online over the next few years.

These are mostly from renewable or cheap sources. Currently, the installed capacity stands at about 2,333MW, against a peak demand of about 1,600MW as of December 2015. This means that when every consumer, even the heavy industrial consumers, is switched on, the country has a reserve capacity of more than 600MW.

While the excess power guarantees continued power supply even when some plants are out in cases of emergencies or repair and maintenance, the planned additional power might mean having excess capacity and in turn the bills will stay high.

Diesel plants

Ministry of Energy and Petroleum Cabinet Secretary Charles Keter said there are plans to retire diesel fired thermal generators and hence the new capacity from the renewable sources will come in handy. “There is demand for the new capacity that is coming on board.

You will note that all of the new capacity is from cheap sources. We still run some diesel plants that are generating over 900MW and need a lot of power to replace the diesel plants, which are expensive. Once we have adequate cheap power, we can step down those that are very expensive,” said Keter.

He spoke last Tuesday when he signed an agreement with Chinese firm CNPC which will partner with KenGen and Geothermal Development Company (GDC) in putting up geothermal power plants.

This would imply that more installed capacity from cheap power sources would result in lower bills. This might however not be the case. If this power is not consumed because capacity exceeds demand by a substantial margin, the cost of sustaining the power plants is still passed on to the consumer.

Power purchase agreements signed between the Government and power producers provide for payment even in instances where they are not feeding electricity to the grid.

Such contracts typically run for a period of between 20 and 25 years, which is deemed adequate time for the producers to recoup their investments, make a margin and give value to power consumers.

While the contracts cushion the producer, they put pressure on the consumer over a long period of time, who have to foot the bill for the producers even when they are dormant.
 

spear

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#5
Our power game changer will happen in the next few years when the current ongoing and planned geothermal plants in Naivasha(Kengen), Menengai (consortium of different private companies) and Baringo (Chinese companies). In total they could generate 1000-1500MW at the initial stage. Once this Turkana 400KV transmission line is complete in June 2018. We can finally evacuate 1000-2000MW of the cheapest power in Africa from Ethiopia at 3 cents. All these are stable load power for our short and medium term needs. Ketraco is busy building the transmission lines in all 47 counties, contractors are erecting last mile transmission lines to areas that have never had power and Kenya Power will handle the connections to the house for billing. So far 60% national power connections is a good progress but I await universal connection 100%. I was reading in Ethiopia skyscrapercity that their own citizens are annoyed that they are selling us their cheap power to develop while their national connection is a poor 27%. @lipsy your input please.
 

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