Engineering Local Value: Case Studies from Olkaria and Beyond

Abstract

Overcoming technical challenges associated with geothermal development – from frisky production wells to fine adjustments of reinjection chemistry – are essential to project success. Effective project management may play a less visible but equally important role in determining the positive impact of a plant. By tuning parameters of the project structure, both the overall quality and contributions to the well-being of the local population can be maximized. This paper covers the factors inherent to geothermal resources that can provide opportunities and challenges for home-country financial, engineering, operational, and supplier participation, despite the highly specialized equipment and folk wisdom required for certain aspects. We discuss strategies to support effective inclusion of in-country resources in project design, procurement, construction, and operation, with the aim of keeping these projects financially attractive, locally rewarding, and successful in the long-term. The Olkaria II Unit 3 project, constructed a decade after commissioning of Units 1 and 2, provides an interesting contrast of two sets of plants very similar technically but executed under different project structures. Other illustrative examples from the Americas, Europe, and Asia regarding local content considerations are provided. Among other factors, we propose that geothermally appropriate and clear divisions of responsibilities between local and foreign parties, integration of local entities throughout all project phases, and specialized knowledge transfer are all shown to assist in project execution and maximize long term benefits to the plant and community. Sections of this paper were originally presented at the 2010 World Geothermal Congress (Wallace et al, 2010) and have been updated with perspectives gained following the recent successful completion of the Olkaria II project.