The CEO of Tulu Moye Geothermal Operations, Darrell Boyd, and the CEO of KenGen, Rebecca Miano, signed the drilling contract on October 23, 2019.
Tulu Moye Geothermal Operations Plc (TMGO) has hired a drilling contractor for its two-phase geothermal project with an estimated capacity of generating 150MW.
The drilling contract signed by the CEO of Kenya-based KenGen, Rebecca Miano, and Darrell Boyd, CEO of TMGO, states that the agreement advances geothermal energy, which in turn encourages sustainable development in Ethiopia.
The Tulu Moye geothermal prospect site is situated in the Ethiopian Rift Valley in Oromia Regional State.
According to Yitemgeta Fantu, the chief deputy technical officer of TMGO, the company conducted a study for the last eight years on the site, a place located 50Km away from Adama, close to the eastern margin of the Rift Valley. The area has high tectonic and volcanic activities.
Phase one of the project will generate 50MW of power, while the second phase is planned to have an output of 100MW, which will be sold to the Ethiopian Electric Power Authority.
Tulu Moye floated an international competitive bid before awarding the contract to KenGen over two other competitors. Tulu Moye and KenGen officially started negotiations in February 2019.
TMGO will design, finance, build, operate and maintain the geothermal power plant.
According to Yitemgeta, geothermal processing requires three procedures. The first process is identifying potential locations, the second is constructing roads to the site and the third one is drilling wells. KenGen is expected to carry out the drilling for phase 1 by drilling 10 wells, each with the capacity of producing 15MW and two additional wells for the condensed water. However, the Kenyan company will not have a role in power generation activities.
Phase 1 of the project has an estimated cost of 260 million dollars, and the second phase will cost 540 million dollars. The capital funding, which is covered by Meridian and Reykjavik Geothermal (RG) Company, will be managed by TMGO. The first phase is planned to be completed by September 2022.
Geothermal power was not considered as important as mineral mining before a proclamation administered by the Ministry of Mines & Petroleum was approved in 2016 that regulates geothermal operations.
In 2017, the Geothermal Resources Development License and Administration Directorate was set up under the wing of the Ethiopian Energy Authority to issue licenses to explore geothermal resources.
"The project is expected to generate power for the next 50 years and plays a significant role in technology transfer," said Yitemgeta. The Plc has a 25-year agreement to sell power to the government. By mid-January, KenGen will start drilling.
Tadesse mamo, former senior expert geologist at the Geothermal and Geological Survey of Ethiopia explained several advantages of geothermal energy. "It is guaranteed that there is a huge potential of the geothermal resource in Ethiopia, and geothermal power is not affected by drought unlike hydro and other types of resources."
According to the expert, using geothermal energy is an advanced and new science. So the partnership between KenGen and Tulu Moye will have a great role in innovation and technology transfer.
Aklilu Hailu, a geophysicist who worked in the geothermal sector for the past 21 years, remarked that the project will help the country to get a large amount of geothermal wealth. "One of the special features of geothermal energy that makes it different from other sources of power is that it can be established on a small surface area," said Aklilu.
Both experts indicated that if Ethiopia utilises this sort of energy, the country would have the ability to become a centre of excellence in power generation.