Rwanda is set to double its energy production in the next one year by tapping into methane gas.
The energy boost is expected from the first phase of the KivuWatt project — an integrated-methane gas extraction and power production facility at Lake Kivu which will generate 25Mega Watts increasing Rwanda’s installed power capacity by 40 per cent.
Rwanda’s installed capacity (off /on grid) is 96MW with only 15 per cent of Rwanda’s estimated 11 million population having access to electricity.
Expensive and limited energy — electricity costs $0.22 per kWh compared with $0.08-$0.10 in the rest of the region — raises the cost of doing business in Rwanda, according to the World Bank.
However, the government targets to have at least 50 per cent of its population having access to electricity, with the KivuWatt project as a key targeted source.
The $325 million gas-to-power project owned by ContourGlobal, a US based oil and gas firm, is expected to generate 100MW if completed as scheduled in 2012.
“This (the additional 25MW) will significantly reduce the cost of production of electricity and ease government expenditure on electricity subsides. Currently power production is very expensive but once we have the methane gas it will ease the cost of energy,” said Charles Nyirahuku, the acting manager in charge of Peat, Methane Gas and Petroleum Unit at Rwanda’s Energy, Water and Petroleum Unit (Ewasa).
According to Ewasa, in general there is increasing demand for energy with an estimate of an additional one megawatt required every month particularly driven by government’s rural electrification program.
Government is targeting increasing connections from the current 215,000 households to 300,000 by next year, in addition to city lighting programme.
The demand forecast by Ewasa is that additional 12 megawatts will be required by end of this year.
While the first phase of the project supposed to generate 100MW of electricity was expected to be operational in 2010 and the second by 2012, it kicked off this year after receiving a $91 million loan facility from a group of development banks (for phase one).
It also received a guarantee of $140 million from the Multilateral Investment Guarantee Agency of the World Bank.
“The prospects for this project are immense; not only for Rwanda but for the region as the Lake Kivu gas reserves are shared between Rwanda and the DR Congo.
It is estimated that the lake has a 700 MW gas potential. The first phase of the Kivu Watt project is thus only representing about 4 per cent of the lake’s potential,” said Jean-Philippe Kayobotsi, the private sector officer for the African Development Bank (AfDB) in Rwanda which has provided $25 million for the project.
He added that the project will not only provide much needed electricity to Rwanda but will also play a strong demonstration and catalytic role for the exploitation of the remaining reserves both on the side of Rwanda and the DRC.
“Once the first phase of the Kivu Watt project is fully implemented, one can expect a rapid implementation of the Kivu Watt’s second phase (75 MW) but also a renewed interest of investors to fully exploit the lake. The entire Lake Kivu represents a potential of 700 MW that will serve Rwanda and the DRC. Any surplus will be exported to other countries in the region,” Mr Kayobotsi said.
Phase 1 of the project involves gas extraction using a floating barge located approximately 12.5 km offshore from the city of Kibuye.
The extracted gas will be further processed and pumped ashore for use in a power plant via a submerged floating pipeline.
Power will be produced by methane-powered reciprocating engine generator sets with a combined capacity of 25 MW, net output.
The project is expected to replace expensive electricity with domestic power supply currently coming from hydropower, limited solar energy, and costly small diesel-fired engines.
The installed power capacity is currently insufficient to meet peak demands, forcing reliance on expensive diesel fuel generators and electricity imports from the Democratic Republic of Congo.
“Sufficient and affordable electricity is key for the economy because it is one of the key elements that will help improve Rwanda’s competitiveness,” Mr Kayobotsi said.
In addition, gas extraction from Lake Kivu is necessary to reduce the risk of inadvertent erruption, and major loss of live around the lake.