Italy’s FER2 Auction Approves Two Zero‑Emissions Geothermal Projects — What It Means for the Market Overview: FER2’s first geothermal auction and the winners Italy’s FER2 incentive mechanism — established by the Ministry of the Environment and Energy Security (MASE) to stimulate renewable investment through long‑term Contracts for Difference (CfDs) — has completed its first geothermal tender, awarding favourable rankings to two zero‑emissions projects with a combined capacity of 29.4 MW. The auction aimed to allocate a dedicated 30 MW quota for geothermal plants that operate with no net emissions, and it selected: - Pola 1: a 24.4 MW project in Jolanda di Savoia, Ferrara. - ITW & LKW Geotermia Italia: a 5 MW plant in Castel Giorgio, Terni. Two other bids — a 12.69 MW project in Castelnuovo di Val di Cecina by Magma Energy Italia and a 5 MW proposal in Monterotondo Marittimo from Enel Green Power Italia — were excluded from the final rankings. The FER2 framework sets explicit timeli...
Kenya's Geothermal Revolution: How the China-Backed OrPower 22 Plant is Powering a Sustainable Future
Kenya stands tall as a leader in Africa's renewable energy journey, with geothermal power taking center stage. Deep within the dramatic landscapes of the Great Rift Valley lies one of the continent's most abundant and reliable clean energy resources. Experts estimate Kenya's geothermal potential at over 10,000 MW, yet the country has so far developed only a fraction—approximately 950 MW—placing it among the world's top geothermal producers despite utilizing just a small portion of what nature offers.
In this exciting chapter of Kenya's energy story, the OrPower 22 geothermal power plant marks a significant milestone. This 35 MW facility, supported by China's Kaishan Group, is scheduled to start delivering electricity to Kenya Power in March 2026. With the plant now complete and testing set to begin shortly, the $92 million (approximately Sh11.86 billion) project highlights Kenya's determined efforts to achieve energy security, reduce electricity costs, and build a more sustainable national grid to meet rapidly growing demand.
The Journey of OrPower 22: From Vision to Reality
The story of OrPower 22 began back in 2013 when the Geothermal Development Company (GDC), Kenya's state-owned geothermal developer, awarded contracts for three independent power producer (IPP) projects at the Menengai geothermal field in Nakuru County. Each project was designed to generate 35 MW, combining to deliver 105 MW in the first phase of Menengai's development.
Under this innovative public-private partnership model, GDC takes responsibility for resource exploration, well drilling, and steam supply, while the IPPs—such as OrPower 22—concentrate on constructing, owning, and operating the power plants for a period of 20–25 years on a Build-Own-Operate (BOO) basis.
Initially associated with a US-based developer, the project experienced delays before China's Kaishan Group acquired full ownership in late 2023. This shift brought renewed momentum, fresh investment, and advanced technology. Kaishan, originally known for industrial compressors, has successfully expanded into renewables and previously served as the EPC contractor for the neighboring Sosian Menengai plant, which started supplying the grid in 2023.
The official groundbreaking ceremony for OrPower 22 took place on October 25, 2024, attended by high-level dignitaries including President William Ruto. The event symbolized strong collaboration between the Kenyan government, private investors, and international partners.
Construction progressed swiftly, led by PowerChina, with an original timeline of 14–17 months aiming for commissioning around mid-2026. Recent announcements confirm the facility has reached substantial completion, with testing phases imminent and commercial supply to Kenya Power expected in March 2026.
Why Geothermal Matters: Meeting Kenya's Clean Energy Needs
Geothermal energy stands out because it provides baseload power—steady, round-the-clock generation unaffected by weather conditions, unlike hydro or solar. In Kenya, geothermal already accounts for more than half of the national electricity mix, helping reduce dependence on costly thermal generation and unpredictable power imports from neighboring countries.
With population growth, industrialization, urbanization, and widespreaXd electrification driving electricity demand higher each year, projects like OrPower 22 are essential. Once online, the plant will contribute to more stable supply and help lower overall electricity costs. Geothermal tariffs remain highly competitive at around $0.069 per kWh (approximately Sh8.9), making it one of the most affordable sources available.
The full commissioning of Menengai Phase 1's 105 MW—including the already operational Sosian plant and the nearing-completion Globeleq facility—will deliver clean, reliable power to hundreds of thousands of households and support industrial expansion in regions like Nakuru.
Beyond OrPower 22, Kaishan continues to deepen its footprint in Kenya's energy sector. In late 2025, the company signed a major steam supply agreement with KenGen for a 165 MW geothermal-powered green ammonia production facility at Olkaria, representing an investment of roughly $800 million. This ambitious initiative positions Kenya as a potential leader in green hydrogen and sustainable fertilizer production.
Energy leaders, including Principal Secretary Alex Wachira, continue to champion technical excellence, collaboration, and inclusive development in the sector.
Challenges on the Path and the Bright Road Ahead
Like any large-scale energy project, geothermal development faces challenges. High initial capital costs, potential environmental impacts (including localized noise, minor air emissions, and community concerns around land use in the Menengai caldera), and the need for thorough stakeholder engagement have occasionally led to debates and legal reviews.
However, the GDC's steam-sales model significantly reduces risks for private developers, while modular plant designs from companies like Kaishan enhance construction speed, efficiency, and scalability. Kenya's evolving energy policies, including competitive bidding and auctions, continue to accelerate progress toward the national vision of a 100% green energy grid by 2030.
With only about 10% of the country's geothermal resource currently tapped, vast opportunities remain—especially at Menengai (with an estimated 1,600 MW potential) and emerging fields in Baringo-Silali. The successful completion of OrPower 22 will mark the full realization of Menengai Phase 1 and set the foundation for even larger expansions in the years to come.
Towards a Greener, More Prosperous Kenya
As OrPower 22 prepares to feed power into the national grid in March 2026, it represents far more than just another power plant. This China-Kenya partnership boosts national capacity, generates employment, stimulates economic growth, and advances global climate objectives. From the steaming vents of Menengai to homes, businesses, and industries across the country, geothermal energy is quietly but powerfully shaping a sustainable future.
In an era defined by the urgent need to combat climate change, Kenya's geothermal success story offers real inspiration: by responsibly harnessing the Earth's natural heat, the country is proving that clean, reliable, and affordable energy is not a distant dream—it's a reality being built right now, one megawatt at a time.
Source: Business Daily
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