Well Head Technology Concept as an Early Financing Strategy in Geothermal Development. Case Study- Baringo-Silali Geothermal Field, Kenya

Abstract

ABSTRACT Developing a geothermal project from an initial stage to operation stage is difficult, complex, expensive and time consuming. Most investors/Independent Power Producers (IPPs) in the geothermal business prefer an assessment to be done to determine project viability before committing investors’ shareholders resources. The decision to invest is made based on project investment advantages versus the risks involved in the project. To fast track and increase the investment appetite for geothermal business in Kenya, the use of wellhead technology to generate early revenue is becoming a desirable concept. The wellhead technology seeks to take advantage of the idle time between completion of drilling and the start and finishing the drilling of wells to be used for a typical conventional power plant. The idea is to harvest steam as soon as it is available and generate revenue stream from electricity sales. The main purpose of this study is therefore, to illustrate the influence of installing a wellhead power plant after the completion of the first wells for a typical 5 MW project and illustrate the financial impact to the development of 35MW geothermal power project in Baringo geothermal field in Kenya. A modified excel based profitability model was used to develope the analysis considering several project assumptions. The results of the study indicated that the introduction of wellhead units every time a well is completed contributed a significant financial cost reduction of 60.3MUSD which is 40.8% of the total project cost. This means wellhead technology has an advantage of generating early revenue by utilizing already completed drilled and tested wells rather than wait for the installation of long-time-lag conventional geothermal power plants, it also allows faster revenue returns on overall project investment.