Kenya Electricity Generating Company PLC (KenGen) has received carbon credits from its Olkaria I, Units 4 and 5 Geothermal Power plant at a time when it is working to solidify its lead in climate action in Africa.
According to the power producer, the milestone follows the issuance of an additional 2,040,515 Carbon Emission Reductions (CERs) for the Naivasha based project by the United Nations Framework Convention on Climate Change (UNFCCC).
This brings the amount of carbon credits issued to KenGen to date to 2,591,496 tonnes of Carbon Dioxide Equivalent (CO2e) valued at USD.3,887,244 which are now available for sale.
The sale process of the carbon credits has been initiated as guided by the applicable disposal laws and regulations for the public sector organizations.
The 140MW Olkaria I Additional Units 4 and 5 power plant, will reduce CO2 emission through the displacement of electricity generated by fossil fuel fired power plants connected to the national grid.
KenGen Managing Director and CEO Rebecca Miano said the UNFCCC’s issuance of the carbon credits is an affirmation of KenGen’s commitment to address climate change which is one of the biggest global environmental challenges currently.
She said the firm has set up a team that is spearheading environmental sustainability to help combat climate change.
KenGen plans to boost green energy in Kenya
“So far, we have developed and registered six (6) Clean Development Mechanism (CDM) Projects comprising of Olkaria II Geothermal Expansion Project, Redevelopment of Tana Hydro Power Station Project, Optimisation of Kiambere Hydro Power Project, Olkaria IV Geothermal Project, Olkaria I Units 4 and 5 Geothermal Project and Ngong Wind.”
Miano went on to say: “These projects together contribute to offsetting approximately 1.5 million tonnes of Carbon Dioxide (C02) equivalent annually.”
“The Olkaria IV Plant is currently undergoing a review process, which could see the issuance of an additional 2,025,813 CERs in the near future,” she added.
At the same time, KenGen which is listed on the Nairobi Securities Exchange (NSE), is poised to earn about Sh119 million from the 550,981 carbon credits that were issued as at July 2021.
The CDM projects contribute to national sustainable development by providing clean energy which ensures improved environmental quality, positive health impacts and increased productivity.
According to the company, CDM was developed as part of the output of a global concern to contribute to climate change mitigation and to foster sustainable development for non-industrialized countries.
KenGen has deliberately shifted its strategy to focus on the production of green energy and currently more than 86 percent of the energy produced by the Company is from clean sources namely wind, hydro and geothermal.
As a way of enhancing its portfolio of climate change mitigation projects, the Company says it intends to incorporate additional geothermal, wind and solar projects which will further reduce carbon emissions annually, in the process reducing the impact of climate change on the environment.
This comes month after the company announced that it had earned Sh2.6 Billion in revenues from commercial innovation initiatives over the last nine years.
KenGen half year profit drop 10.9 % as drought affects hydropower
The company also said it had made a savings to the tune of Sh1.3 billion drawn from process improvement and implementation of continuous improvement ideas.
In January, the power producer reported a 133 percent jump in net profit to Sh18.38 billion for the full year ending June 2020 on the increased output of cheaper geothermal and tax savings.
The company completed its Olkaria V geothermal plant in the year under review, which helped it cut reliance on thermal generators saving on costs while boosting its electricity sales by 11.3 per cent to Sh39.8 billion.
Costs from the use of the thermal plants, mainly fuel charges, declined 57.9 per cent from Sh10.1 billion to Sh4.2 billion.
“KenGen recorded a 13.4 per cent growth in electricity revenue mainly attributed to the full operationalisation of our 165MW (megawatts) of Olkaria V geothermal power plant in November 2019 which boosted geothermal production by 14 per cent,” Miano said at the time.
The electricity producer received a tax credit of Sh4.59 billion from the Kenya Revenue Authority during the period, in contrast with the preceding year when it had paid Sh3.79 billion.