The persistent drought in Kenya is causing severe power shortages across the nation as around 74 percent of Kenya’s electricity is generated by hydropower in the Tana River basin and in the Turkwei River gorge. The country has been experiencing low rainfall for some time now and the long rains normally experienced from March to May failed causing a dramatic drop in water levels at many of the reservoirs that supply Kenya’s hydroelectric plants, resulting in a serious decline in Kenya’s ability to generate sufficient power for its populace and its industries.
The effect on Kenya’s export industries is catastrophic as much of the country’s exports are based on fresh produce and a lack of reliable power supply creates havoc with irrigation and temperature controls in both green and cooling houses. Power is needed for pumping much needed water, in post harvest handling and in cooling before grading. In fact, many farms may be forced to close operations if the power crisis is not ended. These massive closures will result in workers being laid off, across the country, and the loss of market share to other countries.
Much of East Africa is dependent upon hydropower for its energy supplies. As with most of the world’s developing regions, the power demands of both population and industry are increasing steadily, and it is frequently the case that the country’s investment into new power infrastructure has not kept pace with the rapid demand curve. Therefore, when a prolonged drought occurs, the effect on power supplies will become relatively severe. Countries in the region such as Rwanda, Uganda, Kenya and Tanzania are all currently affected.
A temporary power solution
To alleviate this severe power shortage, caused by the prolonged drought, the country’s state owned utility, Kenya Electricity Generating Company Ltd (KenGen), awarded a contract to Aggreko for the provision of a 100 MW temporary power plant to support the national grid and ensure uninterrupted power for Kenya’s industrial sector. The contract is estimated to be worth approximately US$34 million over a twelve month period.
This temporary power plant will assist the Kenyan authorities to maintain reliable power supplies and thus support Kenya’s continued economic growth. Without additional generating capacity KenGen would be unable to maintain electricity supplies. The 100 MW will account for about 10 percent of the country’s total generating capacity. KenGen is wholly owned by the Kenyan Government and is responsible for public power generation in Kenya.
The 100 MW temporary power plant contract was awarded to Aggreko following an open tender which was advertised in the local media and on the World Bank DG Market Online website. The power plant tender was eventually purchased by sixteen companies. In the end five, five of the companies submitted their bids within the given tender period. The official opening of the bids was carried out in public in the presence of representatives of the bidders and the emergency power supply committee of Kenya.
Following the contract award, Aggreko immediately went ahead with their mobilization process of equipment needed for the 100 MW temporary power plant from Aggreko’s regional headquarters in Jebal Ali, Dubai UAE. This work will be carried out in planned phases and the commissioning of the power plant is expected to be completed by August 2006. The new Embakasi temporary power plant is located in Embakasi, Nairobi. The Embakasi power plant is located next to an existing KenGen substation and is synchronised to Kenya’s national grid.
The scope of the contract award is for Aggreko to be turnkey suppliers of the power plant; the supply includes the plant’s generators, transformers, switchgear, control rooms, fuel tanks, fuel management plus other ancillary equipment and services. In addition to supplying and installing the power plant, the contract award included the commissioning plus the operation and maintenance of the Embakasi plant. Specialised engineers, from the company, are manning the plant 24/7 to ensure that the plant’s equipment operates at peak efficiency.
An overall understanding of the supply logistics that can help avoid problems is a vital factor in the smooth running of supplying, installing, commissioning and operating any power plant in this region. The fact that the company had supplied a similar temporary power plant to KenGen some years ago was a positive component in the experience aspect of the contract being awarded to Aggreko. The company has been running plants like this in Africa for many years so they know how to apply their equipment and know what they can and cannot do.
For the Embakasi plant it is essential that throughout the contract period there is a close working relationship between both KenGen’s and Aggreko’s operating and management personnel. This operational association between the two goes from operations (daily) through to senior management (weekly and monthly). This ongoing liaison between the two organisations ensures that the project runs smoothly and that everyone is in touch with events and decisions.
The contract award for the temporary power supply is over a fixed period of time, this time frame has been estimated by Kenya’s Government officials. However, should the rains come early then an early termination could be negotiated. On the other hand, should the rains fail to materialize then an extension of the fixed contract period can be discussed. This flexibility of contract is one of the main advantages of rentals.
A good reputation in Kenya
The 100 MW temporary power plant contract with KenGen is Aggreko’s second utility contract in Kenya. Under the first emergency power supply contract, which was awarded in 2000, Aggreko provided a 45 MW at 11 kV power plant at Embakasi in Nairobi for a period of ten months. Aggreko Area Director, Robin James believes that it was Aggreko’s performance in Kenya in 2002 and 2001that underpinned the company’s successful bid for the KenGen contract.
“Aggreko has an excellent track record with the Kenyan Government and KenGen. Our work on the new temporary power contract is a continuation of our good relations. The Government of Kenya understands the importance of power continuity to the people and the economy following the 2000 contract. This emergency power solution proved that temporary power is a cost effective solution in such moments”, comments James.
Back in 2000, Kenya was experiencing similar drought conditions as those of today. The country faced a crippling power shortage after the failure of seasonal rains reduced or in some cases stopped the output of the hydroelectric power plants. Power rationing was introduced, costing the economy an estimated US$10 million a day in lost production and exports. In response, the Kenyan Government, with support from the World Bank, issued a competitive tender for the emergency supply of a large temporary power plant at Embakasi in Nairobi.
First power within three weeks
The contract was awarded to Aggreko who supplied, installed, commissioned and operated the 45 MW/11 kV temporary power plant. A full range of equipment was provided including generators, transformers, switch gear, control rooms and fuel tanks plus other ancillary equipment. The plant’s first power supplies were provided to Kenya’s grid at Embakasi within three weeks of the effective contract date.
Engineers from Aggreko manned the power plant on a 24 hour basis to manage operations and to ensure that the equipment operated at peak efficiency. The Embakasi plant provided baseload power to Kenya’s grid continuously for ten months until Kenya’s reservoir’s had been replenished. Throughout the execution of the contract, Aggreko maintained a high availability of the equipment and supplied the temporary power to KenGen’s satisfaction. In fact, 100 percent equipment availability was maintained throughout the duration of the contract.
This year’s temporary power plant award means that with 100 MW in a single location, this will be the largest temporary power plant Aggreko has delivered and is the third major contract Aggreko has won in East Africa in the last 12 months. In 2005, Aggreko installed 50 MW in Uganda and 15 MW in Rwanda.