The Ethiopian Electric Power (EEP) is going to sign its first ever power purchase agreement with Corbetti Geothermal after a long delay on two separate power feeders. The agreement is expected to be sealed off next week.
The company had previously agreed with the then Ethiopian Electric Power Corporation in 2013. They were in the process of producing a total of 1,000MW power at the location called Corbetti and the surrounding area, Shalla Woreda, East Arsi Zone of Oromia, 270km southeast of Addis Ababa.
Mekuria Lemma, Strategy and Investment Director with the EEP, told Capital that the two bodies agreed on a feed in tariff in the beginning. He said that EEP has agreed to pay USD 0.075 cents per kwh for the Corbetti project. The Tulu Moye and Abaya projects which will be developed in the second phase will contribute to Corbetti Geothermal to gain USD 0.069 cents per kwh, according to Mekuria.
“They have a scale advantage on the Tulu Moye and Abaya projects so the price has also been reduced compared with Corbetti,” he added.
If the project becomes effective it would be the first large scale private power project for the country that will be connected with the national greed on the power purchase agreement basis.
Mekuria said that the first phase of the project that will take place at Corbetti will take 7.9 years and enable to generate 500 MW project.
“A Geothermal energy project by its nature is not expected to be fully operational in a few years,” EEP officials said. He said that because of this the power production will reach 500MW in the long run.
“We will receive the first 20MW within two years and it will continue on its growth step by step,” he added
Corgetti Geothermal was initially formed by Ethiopian affiliated company called Rift Valley Geothermal and its Icelandic partner Reykjavik Geothermal. Currently Berkley Energy and Iceland Drilling have joined the company. Berkley is the major shareholder with over 53 percent share.
The two sides that finalized the negotiation in the beginning of the Ethiopian New Year are expected to seal their agreement on Tuesday December 19 at the Sheraton Addis.
The country’s energy development is mainly dominated by hydro power, while wind has become the other alternative. Even though the country has a capacity to produce 10,000mw from geothermal the current production is not higher than 50mw.
On its own project EEP has also planned to generate about 75mw of energy from geothermal at Aluto Langanoo, which is closer to the project of Corbetti Geothermal. But the Aluto project is not going as planned.