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KenGen Risks Losing Olkaria Geothermal Wells Over Licence Error

KenGen Risks Losing Olkaria Wells Over 18-Year Licence Blunder Kenya Electricity Generating Company (KenGen) faces a serious legal and operational risk at Olkaria after an error in the coordinates of its geothermal licence left part of the company’s wells, steam infrastructure and other assets outside its legally recognised area. The licensing mistake, made nearly two decades ago, remains unresolved despite the Ministry of Energy and Petroleum acknowledging the problem in 2017.  The dispute has raised questions about the security of KenGen’s investments, the government’s management of geothermal resources and the potential consequences for Kenya’s electricity supply. Olkaria is the country’s most important geothermal centre and accounts for the overwhelming majority of Kenya’s installed geothermal generation capacity.  Licence Error Exposes Strategic Assets The problem dates back to September 19, 2008, when the Ministry of Energy and Petroleum issued KenGen a licence covering ...

Geothermal Drilling Operations Have Begun in Akharim, Afyonkarahisar, Türkiye

Geothermal Drilling Operations Have Begun in Akharim, Afyonkarahisar, Türkiye

Geothermal drilling operations have officially commenced in Akharim, a town in the Sandıklı district of Afyonkarahisar province in western Türkiye, marking a significant step toward unlocking the region’s thermal resource potential for tourism, agriculture, and local economic development.

The project, initiated by the Akharim municipality through a public tender, aims to reach viable hot-water aquifers that can underpin new investments in thermal tourism, greenhouse farming, and potentially district heating or small-scale power applications in the years ahead.

This development fits into a broader pattern of geothermal expansion across Afyonkarahisar, one of Türkiye’s most active geothermal provinces, where existing projects already support large greenhouse complexes, spa and hotel infrastructure, and growing interest in further resource characterization and wellfield development.

Against the backdrop of Türkiye’s national push to increase renewable energy capacity, reduce fossil-fuel dependence, and leverage domestic geothermal resources, the Akharim drilling campaign represents both a local opportunity and a microcosm of the country’s evolving geothermal landscape.

The following article provides a comprehensive analysis of the Akharim geothermal drilling initiative, situating it within Türkiye’s geothermal sector, examining the technical and economic dimensions of such projects, and exploring the implications for investors, policymakers, and communities in similar regions.

Project Overview: Akharim’s Geothermal Drilling Campaign

Location and Context

Akharim is a town (belde) within the Sandıklı district of Afyonkarahisar province, located in western Türkiye’s Aegean region. Afyonkarahisar has long been recognized for its geothermal endowment, with multiple known reservoirs feeding direct-use applications such as greenhouses, thermal hotels, balneology facilities, and, in some cases, binary power plants.

The province sits within a tectonically active zone characterized by extensional structures, fault-controlled fluid pathways, and elevated heat flow, conditions favorable for medium- to high-enthalpy geothermal systems.

The Akharim project is explicitly framed by local authorities as a strategic initiative to create new opportunities for the town in terms of thermal tourism, greenhouse agriculture, and diversified investment.

Rather than starting with a predefined power-plant concept, the initial phase focuses on exploration and resource confirmation: drilling wells to intersect hot-water-bearing formations, measure temperatures, flows, and chemistry, and thereby establish whether the resource can support larger-scale developments.

Project Initiation and Governance

According to local reporting, the geothermal drilling works in Akharim were launched after the municipality conducted a tender process to select a drilling contractor and service providers.

This public-procurement approach is common for municipal geothermal initiatives in Türkiye, where local governments seek to de-risk early-stage exploration before partnering with private developers or launching their own direct-use schemes.

Key elements of the project’s governance and implementation structure likely include:

Municipal leadership: The Akharim municipality acts as the project owner or sponsor, defining objectives such as tourism, agriculture, and local development while overseeing tendering and contracting.

* Drilling contractor: A specialized geothermal drilling firm is responsible for mobilizing rigs, executing the well program, and ensuring compliance with technical and safety standards.

* Technical advisors: Geologists, reservoir engineers, and geochemists are typically engaged to design well locations, interpret drilling data, and model the reservoir.

* Regulatory oversight: National authorities, including the General Directorate of Mining and Petroleum Affairs (MAPEG) and relevant environmental agencies, oversee licensing, environmental impact assessments, and operational permits.

While specific details on the number of wells, target depths, and budget have not been fully disclosed in early reports, the emphasis is clearly on establishing a credible resource base that can attract further investment.

### Objectives and Expected Outcomes

The stated goals of the Akharim geothermal drilling campaign are multifaceted:

* Resource confirmation: Determine the existence, temperature, flow rate, and sustainability of geothermal fluids beneath Akharim.

* Thermal tourism development: Enable new or expanded thermal hotels, spa centers, and wellness facilities that can draw domestic and regional visitors.

* Greenhouse agriculture: Provide low-cost, renewable heat for greenhouse complexes, extending growing seasons and improving crop yields.

* Local economic diversification: Create jobs during drilling and construction, and stimulate longer-term employment in tourism, agriculture, and services.

* Energy transition contribution: Align with Türkiye’s broader renewable-energy and decarbonization goals by developing a domestic, low-carbon heat source.

If successful, the project could transform Akharim from a small town into a geothermal-enabled hub, similar to other geothermal towns in Afyonkarahisar and neighboring provinces.

### Türkiye’s Geothermal Sector: National Context and Strategic Importance

### Resource Endowment and Geographic Distribution

Türkiye possesses one of the most significant geothermal potentials in Europe and the broader Eurasian region, driven by its position at the convergence of the African, Arabian, and Eurasian tectonic plates.

High heat flow, active fault systems, and extensive sedimentary and volcanic formations create favorable conditions for geothermal reservoirs across western and central Anatolia.

Key geothermal provinces include:

* Aydın–Denizli–Muğla corridor: Home to large-scale power projects, including Kızıldere, Salavatlı, and Alaşehir, alongside extensive direct-use applications.

* Afyonkarahisar–Kütahya–Uşak region: Characterized by medium- to high-temperature resources used for greenhouses, thermal tourism, and emerging power concepts.

* İzmir–Manisa–Balıkesir area: Hosts numerous geothermal fields supporting district heating, balneology, and some power generation.

* Central Anatolia, including Konya and Nevşehir: Lower- to medium-enthalpy systems with growing interest in direct use and innovative technologies.

Afyonkarahisar, where Akharim is located, sits within a particularly prospective zone, with multiple known geothermal fields already in operation or under development.

### Installed Capacity and Recent Developments

As of the mid-2020s, Türkiye ranks among the leading countries globally in terms of installed geothermal power capacity, with several hundred megawatts in operation and additional projects in various stages of development.

The country’s geothermal strategy emphasizes both electricity generation and direct use, recognizing that low- and medium-temperature resources can deliver substantial economic and social benefits even without power plants.

Recent developments illustrating this dual focus include:

* Large-scale power projects: In Aydın province, developers such as Maren Maraş are pursuing new geothermal power developments, including a planned 99 MW project in the Germencik district.

* Greenhouse expansion: In Afyonkarahisar’s Merkez district, İpeks Jeotermal, a subsidiary of Alarko Holding, has announced plans to drill 13 new wells, comprising 10 production wells and three reinjection wells, to expand geothermal greenhouse facilities.

* Direct-use infrastructure: Numerous geothermal district heating schemes, thermal hotels, and balneology centers operate across western Türkiye, leveraging moderate-temperature resources for space heating and tourism.

The Akharim drilling campaign fits neatly into this national picture: an early-stage, municipality-led exploration effort that could feed into direct-use schemes, power generation, or a hybrid model depending on resource characteristics.

### Policy and Regulatory Framework

Türkiye’s geothermal sector operates under a legal and regulatory framework primarily governed by the Geothermal Resources Law and related regulations administered by the Ministry of Energy and Natural Resources and MAPEG.

Key elements include:

* Licensing: Geothermal exploration and operation licenses are granted for defined areas and periods, with requirements for work programs, reporting, and environmental compliance.

* Incentives: Various investment incentives, including tax breaks, customs duty exemptions, and feed-in tariff mechanisms for power, support geothermal development.

* Environmental regulations: Environmental Impact Assessment requirements apply to larger projects, with specific provisions for water use, reinjection, and emissions.

* Local government role: Municipalities can initiate and participate in geothermal projects, particularly for direct-use applications that align with local development plans.

This framework has enabled a steady flow of projects, though challenges remain around permitting timelines, grid access for power plants, and social acceptance in some areas.

### Strategic Importance for Energy Security and Decarbonization

Geothermal energy holds strategic importance for Türkiye for several reasons:

* Domestic resource: Geothermal reduces reliance on imported fossil fuels, enhancing energy security and potentially improving the trade balance.

* Baseload renewable power: Unlike solar and wind, geothermal can provide continuous, dispatchable electricity, supporting grid stability as variable renewables expand.

* Decarbonization: Geothermal offers low-carbon heat and power, contributing to Türkiye’s climate goals and international commitments.

* Rural and regional development: Geothermal projects can catalyze economic activity in less-developed regions, creating jobs and infrastructure.

In this context, projects like Akharim are not merely local initiatives; they are building blocks in a national strategy to harness indigenous renewable resources for sustainable growth.

### Technical Dimensions of the Akharim Geothermal Drilling Project

### Geological Setting and Reservoir Concepts

While detailed geological data specific to Akharim may not yet be publicly available, the broader Afyonkarahisar region is characterized by:

* Extensional tectonics: Normal faulting creates permeable pathways for fluid circulation.

* Sedimentary and volcanic sequences: Carbonates, clastics, and volcanic rocks can host geothermal reservoirs, with fractures and karst features enhancing permeability.

* Elevated heat flow: Regional heat flow values are above the global average, supporting medium- to high-temperature geothermal systems.

For Akharim, the working hypothesis is likely that fault-controlled circulation allows meteoric water to descend, heat at depth, and ascend as geothermal fluid, potentially forming a convective system with temperatures suitable for direct use and possibly power generation.

### Drilling Program Design

Typical municipal geothermal exploration programs in Türkiye involve:

* Initial exploration wells: One to three deep wells, often between 1,000 and 2,500 meters, depending on the target.

* Slim holes or gradient wells: Shallower wells to measure temperature gradients and refine conceptual models before committing to deeper drilling.

* Directional or deviated wells: In some cases, these are used to better intersect fault zones or maximize reservoir contact.

Key design considerations include:

* Target depth: Based on regional analogs and geophysical surveys, planners estimate the depth at which target temperatures may be encountered. Temperatures of 80–150°C may support direct use, while higher temperatures may support power generation, depending on flow rates and other reservoir characteristics.

* Well trajectory: Vertical versus deviated drilling, depending on structural interpretation.

* Casing and completion: Designed to withstand expected temperatures, pressures, and fluid chemistry, including scaling and corrosion risks.

* Testing and sampling: Drill stem tests, flow tests, and fluid sampling to characterize productivity and chemistry.

For Akharim, the initial focus is likely on confirming the presence of a viable hot-water aquifer rather than immediately optimizing for power production.

### Drilling Technology and Operations

Geothermal drilling in Türkiye employs technologies similar to those used in the oil and gas sector, adapted for high-temperature, hard-rock environments.

Key technologies include:

* Rotary drilling rigs: Capable of drilling to several thousand meters, with high torque and pullback capacity.

* Drill bits: Polycrystalline diamond compact (PDC) and roller-cone bits designed for abrasive volcanic and carbonate formations.

* Drilling fluids: Water-based or specialized muds to control pressure, cool the bit, and remove cuttings while minimizing formation damage.

* Logging and monitoring: Downhole temperature and pressure logs, gamma-ray, resistivity, and other measurements to characterize the formation.

Operational challenges can include:

* Hard and abrasive formations: Leading to slow penetration rates and high bit wear.

* Lost circulation: Fractured zones can cause drilling fluid losses, requiring mitigation strategies.

* High temperatures: Affecting equipment performance and requiring specialized materials.

* Fluid chemistry: Potential for scaling, corrosion, and gas content, influencing well design and completion.

Successful drilling campaigns rely on experienced contractors, robust planning, and adaptive management as subsurface conditions are encountered.

### Resource Assessment and Next Steps

Once drilling reaches target depths and initial flow is encountered, a comprehensive resource assessment phase begins.

This includes:

* Flow testing: Measuring flow rates, temperatures, and pressures over extended periods to estimate well productivity.

* Fluid sampling: Analyzing chemical composition, including major ions, trace elements, and gases, to infer reservoir temperature, origin, and potential scaling or corrosion risks.

* Reinjection testing: Assessing the feasibility of reinjecting produced fluids to maintain reservoir pressure and sustainability.

* Reservoir modeling: Integrating drilling, testing, geological, and geophysical data to build numerical models of the reservoir’s behavior under various production scenarios.

Based on these results, stakeholders can decide whether to:

* Proceed with additional production and reinjection wells to develop a wellfield.

* Design direct-use systems for greenhouses, district heating, and thermal facilities.

* Evaluate power-generation options, such as binary Organic Rankine Cycle (ORC) or Kalina cycle plants, if temperatures and flows are sufficient.

* Seek partners or financing for larger-scale development.

### Economic and Investment Considerations

### Cost Structure of Geothermal Drilling Projects

Geothermal projects are capital-intensive, with drilling typically representing a significant portion of upfront costs.

Key cost components include:

* Exploration and permitting: Geological, geophysical, and geochemical studies, licensing, and environmental assessments.

* Drilling: Rig mobilization, drilling operations, casing, cementing, and testing.

* Surface facilities: Wellhead equipment, separators, pipelines, heat exchangers, and, for power plants, turbines and generators.

* Operations and maintenance: Staff, monitoring, well maintenance, and reinjection systems.

For a municipal project like Akharim, initial costs may be partially funded by local budgets, central government grants, or development funds, with the expectation of attracting private investment once the resource is proven.

### Revenue Models and Applications

The economic viability of the Akharim project depends on the end-use applications.

* Thermal tourism: Hotels, spas, and wellness centers can generate significant revenue, especially in regions with strong domestic tourism demand.

* Greenhouse agriculture: Geothermal heat reduces energy costs for greenhouse operators, improving competitiveness and enabling year-round production.

* District heating: Supplying heat to residential or commercial buildings can provide stable, long-term revenue streams.

* Power generation: If resource conditions allow, electricity sales under power purchase agreements or market mechanisms can offer attractive returns, though with higher upfront investment.

A hybrid model combining several applications may optimize resource use and economic returns.

### Risk Profile and Mitigation

Geothermal projects carry specific risks:

* Exploration risk: The possibility that drilling does not encounter a commercially viable resource.

* Technical risk: Challenges in drilling, reservoir performance, or facility operation.

* Market risk: Fluctuations in demand for tourism, agricultural products, or electricity.

* Regulatory risk: Changes in policies, incentives, or permitting processes.

Mitigation strategies include:

* Phased development: Starting with exploration and small-scale direct use before committing to larger investments.

* Insurance and guarantees: Utilizing exploration risk insurance or government-backed guarantees where available.

* Diversified off-take: Securing multiple revenue streams, such as tourism and agriculture, to reduce dependence on a single market.

* Stakeholder engagement: Building local support and addressing environmental and social concerns early.

### Investment Opportunities and Partnerships

For investors and developers, Akharim and similar projects in Afyonkarahisar present several opportunities:

* Early-stage partnerships: Collaborating with municipalities to co-fund exploration in exchange for future development rights.

* Direct-use projects: Investing in greenhouses, thermal facilities, or district heating systems once the resource is confirmed.

* Technology and services: Providing drilling, engineering, or equipment solutions tailored to Turkish geothermal conditions.

* Portfolio expansion: Adding Afyonkarahisar assets to existing geothermal portfolios in Aydın, İzmir, or other provinces.

Türkiye’s geothermal ecosystem and investment framework provide a foundation for further development, although project economics depend on resource quality, permitting, financing, and market conditions.

### Socioeconomic and Environmental Impacts

### Local Economic Development

For Akharim, successful geothermal development could be transformative.

Potential benefits include:

* Job creation: During drilling, construction, and operation phases, generating both skilled and unskilled employment.

* Business opportunities: New hotels, restaurants, transport services, and supply chains to support geothermal facilities and visitors.

* Infrastructure improvements: Upgraded roads, utilities, and communications benefiting the broader community.

* Fiscal revenues: Increased local tax bases and potential revenue-sharing from geothermal operations.

These benefits align with broader rural development goals and can help retain population in smaller towns by creating local opportunities.

### Social Acceptance and Community Engagement

Community support is critical for geothermal projects.

Key considerations include:

* Transparent communication: Clearly explaining project goals, benefits, and potential impacts to residents.

* Local participation: Involving community members in planning and decision-making where feasible.

* Benefit sharing: Ensuring that local populations see tangible benefits, such as jobs, services, or reduced energy costs.

* Addressing concerns: Proactively managing issues related to noise, traffic, water use, or environmental impacts during drilling and operation.

Municipal leadership can play a pivotal role in fostering trust and ensuring that the project aligns with community aspirations.

### Environmental Considerations

Geothermal energy is generally considered environmentally friendly, but responsible development is essential.

* Greenhouse gas emissions: Geothermal plants typically emit far less carbon dioxide than fossil-fuel plants, although some non-condensable gases may be released and require management.

* Water use and reinjection: Sustainable management of geothermal fluids, including reinjection, helps maintain reservoir pressure and minimize surface discharge.

* Land use: Geothermal facilities have a relatively small footprint compared with many other energy sources, but careful siting is needed to avoid sensitive areas.

* Seismicity: Although uncommon, induced seismicity can occur in some geothermal projects; monitoring and mitigation measures are important.

Türkiye’s regulatory framework includes provisions for environmental protection, and projects like Akharim will need to comply with applicable environmental assessment requirements and operational standards.

### Comparative Perspective: Akharim in the Context of Afyonkarahisar and Türkiye

### Afyonkarahisar’s Geothermal Landscape

Afyonkarahisar is already a significant geothermal province, with multiple active projects.

* Greenhouse complexes: Geothermal greenhouse operations, such as those developed by Alarko and İpeks Jeotermal in the Merkez district, demonstrate the potential of direct-use applications.

* Thermal tourism: Numerous thermal hotels and spa facilities leverage geothermal heat for balneology and wellness tourism.

* Exploration and expansion: Drilling campaigns, including İpeks Jeotermal’s announced plan for 13 new wells, indicate continued interest in the province’s geothermal resources.

Akharim’s project adds to this portfolio, potentially diversifying the province’s geothermal applications and geographic spread.

### Comparison with Other Turkish Geothermal Hubs

Compared with other Turkish geothermal regions:

* Aydın: More focused on large-scale power generation, with several hundred megawatts installed or planned.

* İzmir–Manisa: Strong emphasis on district heating and direct use, alongside some power projects.

* Denizli–Muğla: A mix of power and direct use, with significant tourism components.

Afyonkarahisar, including Akharim, leans more toward direct use, particularly greenhouses and tourism, while retaining potential for power generation if high-temperature resources are confirmed.

### Lessons from Other Projects

Experience from other Turkish geothermal projects offers valuable lessons for Akharim.

* Phased development: Starting with exploration and small-scale direct use reduces risk and builds confidence.

* Reinjection is critical: Sustainable reservoir management requires robust reinjection strategies from the outset.

* Community engagement matters: Projects with strong local support can benefit from greater trust and cooperation.

* Diversification enhances resilience: Combining power, heating, and tourism can optimize resource use and economic returns.

By applying these insights, Akharim can improve its chances of success and avoid common pitfalls.

### Future Outlook and Strategic Implications

### Scenarios for Akharim’s Geothermal Development

Several scenarios could unfold for Akharim, depending on drilling results and subsequent decisions.

* Moderate-temperature direct use: If temperatures are in the 80–120°C range, the focus may be on greenhouses, district heating, and thermal tourism.

* High-temperature hybrid: If temperatures exceed 150°C with sufficient flow, a binary power plant combined with direct-use applications could be feasible.

* Staged development: Initial small-scale direct use, followed by an expanded wellfield and potential power generation as demand and investment grow.

* Resource disappointment: If the resource is insufficient, the project may be scaled back or repurposed, although this risk is inherent in geothermal exploration.

The development pathway will depend on drilling results, reservoir performance, local demand, and available investment.

### Implications for Investors and Developers

For the broader geothermal community, Akharim signals several areas of potential interest.

* Continued opportunity in Afyonkarahisar: The province remains prospective for both direct use and potential power generation.

* Municipal initiatives as entry points: Local government-led projects can offer partnership opportunities for private developers.

* Importance of early engagement: Engaging at the exploration stage may create opportunities to participate in future development.

* Need for tailored solutions: Technologies and business models must be adapted to local resource characteristics and market conditions.

Investors with experience in Turkish geothermal will find familiar development patterns, while newcomers can learn from established players.

### Policy and Strategic Recommendations

To maximize the benefits of projects like Akharim, policymakers and stakeholders might consider:

* Streamlining permitting: Reducing bureaucratic delays for exploration and development licenses.

* Enhancing incentives: Targeted support for municipal geothermal projects and direct-use applications.

* Promoting knowledge sharing: Facilitating exchanges between successful geothermal regions and emerging projects.

* Supporting workforce development: Training programs for local technicians and engineers to build capacity.

* Encouraging sustainable practices: Reinforcing reinjection and environmental monitoring standards.

Such measures can accelerate geothermal deployment while ensuring long-term sustainability.

### Conclusion: Akharim as a Microcosm of Türkiye’s Geothermal Ambitions

The commencement of geothermal drilling in Akharim, Afyonkarahisar, is more than a local news item; it reflects Türkiye’s broader geothermal trajectory.

From large-scale power projects in Aydın to expanding greenhouse complexes in Afyonkarahisar, the country is working to unlock its geothermal potential to enhance energy security, drive regional development, and contribute to decarbonization.

For Akharim, the path ahead involves technical challenges, investment decisions, and community engagement, but the potential rewards include economic diversification, job creation, and sustainable energy development.

For investors, policymakers, and industry observers, the project offers insights into the dynamics of Turkish geothermal development and the opportunities that may exist in emerging geothermal towns across the country.

As drilling progresses and new data emerges, Akharim’s story will unfold, adding another chapter to Türkiye’s geothermal narrative and potentially serving as a model for similar initiatives in other regions.

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