Priority Geothermal Direct-Use Applications for Kenya

Priority GeothermalDirect-Use Applications for Kenya: A Pre-Feasibility Study for Greenhouses

This is the final version of this report. All views expressed in this Report are those of the authors alone and do not necessarily reflect the official views

of the United States Agency for International Development.

Prepared for USAID – Washington and

The Kenya Geothermal Development Company (GDC)

byLand O’Lakes International

Development andWinrock International

through a VEGA LWA Cooperative Agreement

The VEGA/Powering African Agriculture (VEGA/PAA) Project

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GreenhousesSummaryGreenhouses are especially well suited for geothermal resources because their energy requirements can be met with low-level heat sources. Kenya already has a vibrant cut flower industry mainly exporting to Europe. Greenhouses are the single largest global agricultural productive use of geothermal energy today. High value fruits and vegetables are well suited for greenhouse production, as well as nurseries for tree and coffee saplings. Geothermal powered greenhouses provide significant local benefits and economic development. Large greenhouse complexes can literally save millions of dollars each year in fossil fuel heating costs. An average greenhouse can save over three-quarters of its operational fuel costs by using geothermal heating, which can represent from 5 to 10% of operational costs, depending on climate. In warmer countries like Kenya, greenhouse heating is often done primarily for humidity control since decreased humidity also decreases crop fungus the crops. Heating also allows the greenhouse to be maintained at optimal crop growth conditions and shorten crop production cycles. The geothermal greenhouse industry also offers great employment potential to women; the vast majority of greenhouse workers in Kenya are women.

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Priority Geothermal Direct-Use Applications for Kenya:A Pre-Feasibility Study for Greenhouses

Geothermal energy represents an enormous potential to further expand the floriculture and horticulture industries in Kenya. The vigorous development of direct use geothermal resources could advance Kenya to become the world’s largest exporter of cut flowers and vegetables. The floriculture greenhouse industry in Kenya represents a large sector of Kenya’s economy (1.6% of national GDP); exporting US$ 510 million annually in cut flowers to Europe, the Middle East, and Asia; and ranking third among the world’s flower exporters. Over half a million people are employed by the industry, which has experienced growth rates of over 10% during the past several years.

Greenhouses are very energy intensive structures. Energy conservation in greenhouses via roof and sidewall insulation is not practical for most greenhouses because of light-transmission requirements. The use of geothermal resources to supply heat can greatly reduce heating costs from conventional fossil fuel sources.

The major factors that commercial greenhouse operators consider for business planning are climate, labor, transportation, energy costs, water quality and supply, and government regulations. For most plants, optimal growing temperatures fall between 15°C and 27°C. Air circulation requirements range from about 6 to 9 cubic feet per minute (cfm). Likewise fresh water is needed for greenhouse irrigation and typically requires about 15 to 20 acre/feet/year per acre depending on crop type.

Geothermal heating of greenhouses will lead to significant improvements in production, quality, market timing, cost savings, and environmental benefits when compared to existing industry practices. The infrastructure already exists to support a successful horticulture industry, so an expansion of the industry utilizing geothermal resources does not present major obstacles. Access to geothermal sites for development, education of industry leaders and entrepreneurs regarding direct use geothermal energy, and recruitment of new floriculture business is needed in order to expand the industry.

Greenhouses Market Sector Overview1. Greenhouse Background/History

The horticulture greenhouse industry in Kenya represents a large sector of Kenya’s economy, especially with respect to the country’s exports. Kenya


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is ranked the third largest exporter of cut flowers in the world after the Netherlands and Columbia. The horticulture sector grew rapidly from its early beginnings in the 1970’s by supplying cut flowers and vegetables to Europe.

2. Standard Industry Practices

Flower production today is done mostly in field cultivation and in greenhouses, the latter which enables better environmental and pest control. For large producers the trend in recent years has been to favor growing in greenhouses, and reduce open field production. Greenhouses in Kenya are almost exclusively unheated (in contrast to the European and North American horticulture industry). The major exception is Oserian, which utilizes inexpensive heat purchased from KenGen. Oserian is the largest geothermal greenhouse facility in the world.

3. Market Size and Demand

The Kenyan floriculture industry exports approximately US$ 510 million (FOB Value) annually in cut flowers. The economic stability and potential growth of the country is therefore dependent on the continued success of this industry; 3% of the national GDP is from the horticulture sub-sector of agriculture, and about half of that (1.6%) is from the flower industry alone. According to the Kenya Flower Council, horticulture is one of the top foreign exchange earners for the country generating approximately US$ 1 billion annually and represents 10% of total Kenyan exports and is the second largest export sector after tea. Annual growth averaged over 10% from 1995 to 2009 but slowed to 1.7% over the last 3 years and is projected to continue to grow in the foreseeable future. There are over 4,000 hectares of cut flowers under cultivation, mostly in large plastic-covered greenhouses. The floriculture industry employs over 500,000 people directly and indirectly, and represents a major source of employment in the country. Cut roses are the main crop grown and exported by the Kenyan horticulture industry and constitute about 90% of the total value of domestic floriculture. The industry started to expand in the 1970’s with the development of mass tourism from the European Union (EU) to East African countries. The jumbo jets bringing European and American tourists to Kenya had spare cargo capacity for the return journeys to the EU and were therefore able to offer relatively low freight rates for horticultural exports, including flowers.

3% of the national GDP is from the horticulture, about half of which (1.6%) is from the flower industry alone

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Figure 1. Kenyan’s product exports major product categories; Floriculture ranks second after tea (Haussmann, Economic Complexity Observatory, 2012).

Machinery

Electronics

Aircraft

Boilers

Ships

Metal Products

Construction equipment and materials

Home and office materials

Pulp and paper

Beer, spirits and cigarettes

Food processing

Petrochemicals

Inorganic salts and acids

Other chemicals

Agrochemicals

Chemicals and health related products

Coal

Mining

Oil

precious stones

textile and fabrics

Garments

Cereals and vegetable oils

Cotton, rice, soy beans and others

Tropical treetops and flowers

Tobacco

Fruit

Miscellaneous agriculture

Fish and seafood

Meat and eggs

Animal fibers

Milk and cheese

Leather

Not classified


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2010 2011 2012 Area Quantity Value (Kshs Area Quantity Value (Kshs Area Quantity Value (Kshs Share by (Ha) (Ton) million) (Ha) (Ton) million) (Ha) (Ton) million) value

Vegetables 277,284 4,600,000 85,736 277,578 4,642,522 95,564 336,517 6,084,341 104,920 48%

Flowers 3,419 133,736 44,964 3,213 123,270 41,608 4,039 878,067 39,685 18%

Fruits 158,291 2,768,435 50,578 177,715 2,848,028 60,645 166,915 5.236,365 61,524 28%

Nuts 94,838 123,221 3,796 99,576 147,583 5,876 98,063 226,785 6,900 3%

MAPs 4,173 2,673 44 7,004 15,034 429 17,301 152,430 4,940 2%

Total 538,005 7,628,065 185,118 565,086 7,776,437 204,122 622,835 12,577,988 217,969 100%

Fruits

Nuts

Vegetables

Flowers

MAPs

28%

3%

48%

18%

2%

4. Industry Production and Supply

Table 1: Industry Performance by Category 2010-2012

Figure 2. Horticulture Industry Contribution by Value, 2012

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2010 2011 2012 % Change Value Quantity Value Quantity Value Quantity Quan- ValueProduct Kgs Kgs Kgs tity

Flowers 35,557,457,205 120,220,846 44,506,056,083 121,891,436 42,872,537,453 123,510,784 1.3 -3.7

Vegetables 123,813,087 123,813,087 21,513,237,985 92,201,537 21,490,276,838 103,356,938 12.1 -0.1

Fruits 2,789,134,974 32,501,074 3,626,732,716 37,068,526 4,043,059,592 45,110,395 21.7 11.5

Nuts 1,997,516,145 11,827,980 2,660,083,562 12,999,655 2,945,364,388 12,479,881 -4.0 10.7

Processed fruits 6,762,034,204 79,013,546 7,287,583,444 78,382,021 6,947,505,790 65,410,205 -16.5 -4.7

Processed veg. 9,187,224,162 35,649,188 11,636,009,448 38,305,653 9,415,032,764 30,553,573 -20.2 -19.1

Totals 56,417,179,777 403,025,721 91,229,703,238 380,848,828 87,713,776,825 380,421,776 0 -4

Table 2: Horticulture Exports 2010-2012

Key PlayersThe floriculture sub-sector within horticulture is represented by the Kenya Flower Council (KFC) whose members include the following companies among others: Finlay Flowers, Oserian Development Co, Vegpro Group, Redlands Roses, Sian Roses, Subati Flowers, Suera Flowers Aquila Dev. Co, Kisima Farm, Live Wire, Magana Flowers, Maridadi Flowers, Mt Elgon Flowers, Nini Ltd, Ol-Njorowa Ltd, Penta Flowers, PJ Dave Ltd, and Primarosa Flowers. The vegetable sub-sector within horticulture is represented by the Kenya Horticulture Council (KHC) with key growers such as Vegpro, Finlay and Indhu Farms.

Key Geographic LocationsThe Kenyan floriculture industry is concentrated mainly in five counties, although greenhouses are widespread throughout the highlands of Kenya. The two leading counties for greenhouses are Kiambu (47% by product value) and Nakuru (35% by product value). This geographic distribution is due to the favorable climatic conditions, access to fresh water, and proximity to a good road network and relatively quick access to airfreight for international shipping from Jomo Kenyatta International Airport in Nairobi.

5. Market Growth and Trends

The flower industry has grown rapidly in the past ten years at 10% per year, and is poised to grow further in the next 10 years. Traditional markets have been Europe (Holland, UK, Germany, France and Switzerland), but with the growth in demand from Japan, the Middle East and Gulf States such as the UAE (United Arab Emirates), and Russia, there remains significant potential for the flower industry to expand further and supply these emerging markets.


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140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

600,000

500,000

400,000

300,000

200,000

100,000

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Figure 3. Floriculture Annual Export in Tons

Figure 4. Annual Tomato Production in Kenya

Tons

Tons

Year

Year

6. Regulatory Environment

The floriculture and horticulture sectors are primarily export orientated and subject to stringent audits as shown below. Otherwise, the Government of Kenya is encouraging and promoting the exports of horticultural products, especially flowers, by allowing open free trade, limiting licensing restrictions and maintaining a supportive policy, legal and regulatory environment to encourage investment and growth in this industry and its sub-sectors.

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Key AgenciesThe Kenya Flower Council (KFC) is a voluntary association of flower growers with a code of conduct for its members covering social and environmental issues for producing in a responsible manner, which includes Global GAP. Kenya Horticulture Council (KHC) covers the full horticulture sector including floriculture. Fair-trade Labeling Organization (FLO) controls all social and environmental standards, and allows sales with any fair-trade national initiative in Europe and the US. Max Havelaar covers social and environmental issues for sales into the Swiss market. Milieu Programma Sierteelt (MPS) SQ covers social elements, including aspects of worker welfare and working conditions. MPS-A addresses chemical, fertilizer and water utilization. MPS-GAP covers all good agricultural practices. British Ornamental Plant Producers (BOPP), Control Points and Compliance Criteria of BOPP Certification Scheme. Ornamental Horticulture Packhouse Standards. Linking Environment and Farming (LEAF) LEAF brings together different stakeholders who are motivated by a common concern for the future of farming, developing a system of farming which is realistic and achievable for the majority of farmers.

7. Greenhouses Market Issues and Potential

The major challenges in the export flower industry include pests, high costs of investment, dependence on imported plant stock, and high cost of compliance with standards such as Global GAP. Pests and disease have a significant impact on the industry as they affect market access abroad. Products that do not meet phyto-sanitary requirements are intercepted abroad and destroyed, resulting in a total loss for the grower as well as affecting his reputation as a reliable supplier. Large floriculture businesses have the resources and experience in dealing with and overcoming the challenges above. Smallholder operators in the local high value vegetable market to hotels and supermarkets tend to have less rigorous audit standards.

Relocation Potential and CostsRelocation options for the large scale floriculture operators is limited because of water availability, infrastructure cost and the fact that roses have a 5 to 8 year life expectancy and the full term is required for the farmer to compensate for the breeder royalties. However for high value intensive flower propagation operators with relatively small area of greenhouses, the benefits of low cost geothermal heating compared to high cost fuel oil heating could mean that relocation was very viable. Small scale vegetable operators with relatively lower infrastructure cost could well consider relocation to get the benefit of geothermal heating giving a year round production capability.


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Greenhouses Energy Considerations 1. Current Energy Practices

Currently most Kenyan greenhouses are not heated. The greenhouse structures provide some control over the environment in which roses or other flowers are grown. Solar heat is accumulated during the day and keeps greenhouse temperatures throughout the night above outside ambient temperatures. Problems with unheated greenhouses occur in the early morning hours when the temperatures approach the dew point and moisture condenses on the plants and leaves. This is highly undesirable as the leaf moisture can cause fungal disease and lower quality flowers. To combat this problem greenhouse operators use fungicides, which are applied preventatively several times per week (typically three times). This adds an environmental risk to workers and water supplies, as well as raising production costs to the floriculture business.

EquipmentThe basic equipment required for a greenhouse operation in Kenya is readily available locally as in greenhouse structures, plastic sheeting, irrigation equipment, growing troughs, etc. All of the equipment necessary for heating would have to be imported, but it is readily available from Europe and the United States.

Energy SourcesThe greenhouse sector relies on Kenya Power (KP) for its electrical supply backed up with diesel-powered generators for irrigation, pre-cooling, cold store operations and lighting. This is a significant component of production and marketing costs estimated at between 10% and 15%. Oserian is the only example in Kenya using both geothermal electricity and geothermal heating in the greenhouses benefitting by a 50% reduction in electricity costs and 70% saving when compared to fossil fuel heating.

The use of solar panels for greenhouse heating has recently been introduced, especially in flower propagation units where growing temperatures need to be kept to a minimum of 20°C. Fuel boilers are utilized in a limited number of specialist greenhouses for providing heat and carbon dioxide as a byproduct.

ProcessingProcessing involves pumps, refrigeration equipment, water treatment plants and conveyor transport systems, all of which require reliable electrical supply. The following sections provide details on energy requirements for the different processing sectors.

50% reduction in electrisity costs is what Oserian benefits from as it uses both geothermal electricity and heating

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2. Energy Consumption

Thermal LoadsHeating of greenhouses for humidity control requires upwards of 300 kWth per hectare. The cost of heating using fuel oil is approximately US$ 150,000 per Ha per year. For propagation units, which require temperatures of not less than 20°C, the heat required is around three to four times this amount with correspondingly higher fuel costs.

Electrical LoadsThe main use of electric power in greenhouses in the Great Rift Valley climate is for cold storage and irrigation in addition to lighting for the offices and warehouses. Adequate cooling is critical to keeping the perishable flowers in prime condition and extending their post-harvest shelf life and backup diesel powered generators are necessary to provide critical electric power to run compressors during grid outages.

Irrigation water pumping and circulation are critical especially for hydroponic growing. Irrigation water is drawn from fresh water wells or constructed sumps that tap into the ground water supply; for example from Lake Naivasha where a large number of floriculture businesses are located. Fresh water is supplemented with fertilizer and nutrients and pumped to the hydroponic flower beds/containers, which hold the rose stock. The hydroponic beds use pumice and coco peat as a growing media. After flooding (saturating) the hydroponic beds, excess irrigation water is collected and recycled in order to minimize fresh water use. About 30% of the water is recycled.

Reliability IssuesThe reliability of electric utility power is a major concern to the greenhouse industry in Kenya, and the frequent power outages require the use of diesel powered backup generators. This is an added O&M cost for the floriculture industry estimated at 10% of the total electric cost.

Geothermal Energy DU Potential1. Geothermal Direct-Use Utilization Potential

The potential for expanding the existing greenhouse floriculture and vegetable industry in the Great Rift Valley by utilizing Direct-Use geothermal heating is enormous. The advantages of Direct-Use heating are based on


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significant improvements in production/hectare by 15-25%, consistent quality, maximizing production to meet market peak periods, cost savings from reduced chemicals, and environmental benefits.

Geothermal Processing OptionsUsing geothermal energy directly means circulating geothermally heated water to 55°C around the greenhouse during periods of high humidity in order to:

• Controldewpointtemperaturebydryingtheairinsideagreenhouse.This, in turn, minimizes the incidence and spread of disease, leading to fewer stems rejected as waste and better harvesting yields. Thus, less herbicide applications are required, resulting in cost savings, less worker exposure, and environmental benefits while producing higher quality flowers. The increased revenue as a result of reduced rejects and cost savings in fungicides is estimated at US$ 40,000 per hectare per year.

• Control growth rates of flower stems for peak holiday periodswhendemand leads to higher profits. The peak holiday period is from October to May. Controlling day/night temperature differentials also affects the length of the rose stem.

• Reducegrowingtimefrom50–60days(unheated)to40daysforheatedgreenhouses. This represents a 20% to 25% increase in production and revenue.

Geothermal heat can also be used to heat-sterilize recycled irrigation water to avoid the spread of disease. Geothermal electric wellhead power production can provide more reliable electric power at a stable cost. Electric power for refrigeration of flower stems, pumping, and other needs can be met at a lower cost estimated at 50% to 60% of Kenya Power grid cost. In the case of Oserian in Kenya, the approximate annual saving in electricity costs alone amounts to US$ 1.2 million per year giving a payback period of 5 years on the investment of a wellhead generator and associated transmission network.

Direct-Use Equipment RequirementsA geothermal heating system for greenhouses typically consists of a geothermal supply (well, steam pipe, hot water pipe), geothermal fluid disposal (injection well, surface pond), heat exchanger, storage tank, circulation pumps, valves, heat tubing or pipes in the greenhouse flower beds, and environmental controls for heat and humidity regulation. For sterilization of recycled water a contra-flow sterilizer unit is required. All equipment will require importation form Europe and/or USA.

Geothermal Resource Co-Location PotentialAs the temperatures required for greenhouse heating are relatively low, there

1.2 million US$ is Oserian’s approximate annual saving on electricity costs

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is potential for resource co-location; the options include, but are not limited to, the following:

• Locationclosetoawellheadgeneratorutilizingtheseparatedbrineforheating and condensate for irrigation.

• Locationnearalargepowerplantandutilizingthewasteheatfromthepower plant, the brine and the condensate.

• Morethanonedirectuseapplicationcanalsobesuppliedfromthesamesource by cascading the thermal fluids according to the application temperature requirements of the individual applications. An example is to have aquaculture (fish farms or ponds) and vegetable greenhouses at the same location.

Temperature and FlowThe geothermal resource needs to be evaluated in regard to temperature, flow rates, water quality and water chemistry, well data, and disposal methods of spent fluids. Greenhouse heating in the Great Rift Valley can be easily accomplished with temperatures as low as 45°C though higher temperatures of 70°C to 90°C would be better. Actual water temperatures circulated into the greenhouse for heating near the plant stock should not exceed 60°C to protect plants from drying out and workers from accidental burns. The thermal requirements are estimated at 300 kwh per hectare of greenhouse to achieve an inside/outside temperature differential of 12°C. The flows required to deliver the required heating loads are shown below for various geothermal resource temperatures. The table illustrates that geothermal heating is easily accomplished with the geothermal resources likely encountered in the Great Rift Valley.

Resource Temperature Flow Required

Celsius l/s per hectare heated

80 4.2

100 1.4

150 0.5

200 0.3

Table 3: Geothermal Resource & Flows for Greenhouses

In the case of humidity control only in the greenhouse, the temperature differential is more in the region of 5 to 10°C

Geothermal Environmental ImpactsThe main environmental impacts from geothermal development are site


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preparation for drilling and completion; and disposal of geothermal fluids after heat extraction. By reinjection of spent fluids, the environmental impact of geothermal fluid withdrawals can be minimized. The impacts from greenhouse (heated or non-heated) construction and operation are site development (leveling and road building); site run-off; water use and its impact on local water resources; and waste water discharge, particularly with regard to fertilizer and pesticides contamination. A detailed impact statement should be developed for any specific site. But by using geothermal energy instead of diesel-burning back-up generators, there will be less air and noise pollution around the sites.

There are also additional environmental impacts resulting from operating a greenhouse. These operations can particularly impact water use and quality. The consumption of irrigation water and the discharge of wastewater from greenhouse businesses can negatively impact the local environment. Pest and fungicide control also can have high environmental impacts. Use of geothermal energy to heat and dehumidify greenhouses to prevent night time condensation and eliminates the threat of fungus and mold growth, and thus eliminates the need for herbicides which has a positive environmental impact. Thus, use of geothermal energy in Kenyan greenhouses has an overall net positive environmental benefit.

Greenhouse Water Recovery PotentialThe consumption of irrigation water, competition with other water users, and the discharge of wastewater from greenhouse businesses present another challenge to the growth of the greenhouse industry. A large fraction of the industry draws water from the existing lakes in the area, and lake levels fluctuate over seasons and years. Rightly or wrongly the Kenyan greenhouse industry has been under criticism by environmental groups and others, such as local and international press for their extensive water use which some critics say causes lake levels to fall below normal levels in recent years (since about 2000), especially at Lake Naivasha until recently (now lake levels are quite high). In addition, competition for fresh water sources from other water users, such as the growing populations of Naivasha and Nakuru, has increased. Measures need to be taken by the greenhouse industry to implement the most efficient use of irrigation water (hydroponic systems with significant recycling), collection of greenhouse rainwater runoff, and development of other water resources, such as well water not connected to the lake aquifers, geothermally-produced fresh water, water desalination through reverse osmosis or other technologies, in order to conserve Kenya’s water resources and mitigate criticism of this important industry that contributes significantly to Kenya’s GDP.

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2. DU Geothermal Greenhouse Payback Potential

The DU payback potential is dependent on many factors including what crop is grown in the greenhouse and its market. Typically the DU geothermal heating will give increased production per hectare, yield a reduction in or actual elimination of the use of fungicides, and a reduction in the reject levels of the crop from diseases, with the overall benefit being about a 20 to 30% increase in productivity as well as improved reliability and consistency of supply. Thus, yields in floriculture would increase by 20 to 40 stems/m2/year with corresponding revenue increase of approximately US$ 50,000-100,000 per Ha per year. In the case of tomato greenhouse production with geothermal heating, the yields have the potential to increase from a very low Kenyan average of 17MT/Ha to more than double at 30-40MT/Ha with corresponding revenue increase of approximately US$ 10,800 to 18,500 per hectare.

3. DU Geothermal Greenhouse Example in Kenya

The Oserian greenhouses near the north shore of Lake Naivasha are geothermally heated and powered and mainly grow roses and carnations hydroponically for export to the European Union (EU). This is perhaps the best example of the potential for Direct-Use geothermal in Kenya.

Figure 5 Roof Vents for Passive Cooling


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Cooling of greenhouses is required during the day for most of the year. Most greenhouses use passive cooling, which is accomplished passively with roof vents. These vents run along the peak line of the greenhouse structure for the entire length of each individual span. Screened side vents in the sidewalls allow for cooler air to enter the greenhouse while the hotter air escapes through the roof vents. No electricity is required to passively cool the greenhouse structures, and the system is effective and inexpensive. All commercial greenhouses that the prefeasibility team saw employed this type of cooling system.

Forced air, or fan and pad cooling, is common in the US. If greenhouses are built in hotter climates in Kenya such as Baringo, Garissa, Isiolo and Turkana Counties, it is likely that they will require fan and pad cooling. One wall of the greenhouse houses a series of evaporative cooling cellulose pads, while fans are located at the other end of the greenhouse and dry the latently cooled air through the greenhouse, which results in superior cooling to just fans alone.

Electricity is also required for processing, cold storage, water supply, and irrigation. Cool rooms for processing and cold storage rooms are the main electric loads for cut-flower operations with refrigeration capacities ranging from 60 tons to 120 tons for large operations. Rose stems are harvested and quickly brought to a central processing building where they are cooled to between 5°C and 8°C for processing. After the initial cooling, the flower stems are stripped of their lower leaves and graded for quality. Quality is determined based on the length and straightness of the stem, and the appearance of the flower bud, among other criteria.

Figure 6 Greenhouse Cold Flower Storage

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The graded stems are then bundled for shipping; some are wrapped into bouquets if they are shipped directly to the retail market. The bundles or bouquets are packed into cardboard boxes for overseas transport, and cooled to 2°C for preservation during shipping and to extend their shelf life.

From the greenhouse cold store, the packaged flower cartons are taken to the airport by refrigerated truck and shipped on commercial flights to distribution points in Amsterdam, London, or Dubai. A rose harvested in Naivasha in the morning or afternoon will arrive at the Dutch flower auction in Holland the following day; and be for sale at a retail store in Europe two days after harvest in Kenya.

The Oserian greenhouses consist of 120 hectares (ha) of roses of which 50 ha are geothermally heated for dehumidification purposes; and 80 ha of other flowers with a total of 4,600 employees, of which 600 employees work inside the geothermally-heated greenhouses.

The geothermal energy is supplied by well OW-101, leased from KenGen in 2003, with 3.5 to 8 bar pressure, supplying two-phase flow at 135 to 140°C to two 7.5 MWt plate heat exchangers. The heated fresh water is stored in an insulated tank which is then supplied to the greenhouses at 50-55°C. Heating is done mainly at night to prevent condensation inside the greenhouse from 2:00 to 7:00 AM as outside temperature rarely reach freezing. The greenhouses are kept at less than 85% relative humidity to eliminate fungal infection, and thus eliminate the use of chemical fungicides. Heated water is also used to sterilize the re-cycled fertilized water, thereby reducing fertilizer and water

Figure 7 Geothermal heated water is circulated

through rose plants for dehumidification at the Oserian greenhouse


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wastage and hence reducing cost. CO2 is supplied to the greenhouse from

the geothermal fluids to enhance photosynthesis. About one million rose stems are produced daily and shipped mainly to the Netherlands and the UK, but some are also sent to Japan, USA and Australia. These greenhouses, due to the milder Kenyan climate and the use of geothermal energy, have a carbon footprint six times less than those in Northern Europe where both heating and lighting, using fossil fuels, is required for eight months of the year. The flowers are shipped in insulated trucks to Nairobi and then air-shipped overseas. Kenya provides approximately 30% of all the roses sold in the EU.

The Oserian greenhouses are also supplied electrical power from two well-head generators. Steam from well OW-306 is supplied to a 1.6 MWe binary plant (2 MW nameplate) supplied by ORMAT commissioned in 2004. Well OW-202 supplies steam to a 1.3 MWe back pressure plant (2 MW nameplate) supplied by Geothermal Development Associates (GDA) of Reno, Nevada commissioned in 2006. This single–flash, atmospheric exhaust unit isinefficient as compared to a condensing units (about 50% of comparable output), but the longer term plan is to fit a partial condenser and utilize the waste heat for further greenhouse heating.

Geothermal heating in a greenhouse is beneficial for humidity control and market timing. Based on the experience at Oserian, the company uses hot water to elevate greenhouse air temperatures during the early hours of the morning, typically for about six hours each night year-round. Geothermal steam also allows Oserian to sterilize their recycled hydroponic irrigation water thus saving water, fertilizer, and minimizing waste-water discharge.

Figure 8 Oserian Geothermal Heating Plant

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4. Direct-Use Geo-Greenhouse SWOT Analysis

• Kenyahasalargegeothermalresource• Largeexportmarketforflowers&horticulture• Kenyanqualityproducewellknownabroad• Goodinfrastructuretomainmarkets• Potentiallocalmarketforvegetables• Excellentclimateforhorticulture• Largelaborpool,womenemployed• Competitiverenewableenergysource• EnvironmentalbenefitsofGHdehumidification

eliminating fungicide usage

• Requiresreliablewatersupply• Unreliableelectricalpower• GeothermalgreenhouserequirestrainingforO&M• Highcapitalcost• Largelyuntrainedlaborpool• Unknowngeothermalresourcesandaccessto

geothermal areas

• Canaccessyearroundmarkets• CarbonCreditsthroughCDM• Possiblenewexportopportunities• GDCinvolvementlegitimizesefforts• Geothermalfishhatcheriescouldbebuiltto

supply rapid aquaculture growth • UseofgeothermalresourceattractivetoFairTrade

market• Lowresourcetemperatureoptions• EliminatesfungicideusagethruGHheating

• Geothermalresourcelocationrelativetomarketand infrastructure

• Unreliablegridpower-Stand-bypowerrequired• ReplacementequipmentnotavailableinKenya• Geothermalgreenhouserequireshightech

approaches–needstrained,investedpersonnel• Foreignfloriculturecompetition(e.g.,Tanzania)

Strengths

weakness

Opportunities

Threats

Table 4. Geo-Greenhouse SWOT Analysis


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A Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis shows that the potential geo-greenhouse development in Kenya has a high probability of success. The SWOT analysis shows that there is a competitive advantage to heating and powering greenhouses with geothermal energy.

Perhaps one of the greatest threats to the greenhouse industry in general is from unreliable grid electrical power is pervasive in Kenya. This is most needed for floriculture production that requires cold rooms for flower processing and temporary storage before shipping to maintain product freshness. Thus most commercial operations have to maintain a backup power option. Coupling geothermal greenhouses with geothermal electrical power generation can mitigate the need for stand-by power.

Greenhouse Pre-Feasibility Conclusions and Recommendations The potential for expanding the greenhouse floriculture industry in Kenya in the rift valley of is enormous. Expansion of the existing greenhouse industry by re-locating or installing new greenhouses at geothermal sites would offer tremendous economic, competitive and environmental benefits to the industry as well as to Kenya’s GDP through job creation and tax revenues. Greenhouses are a labor-intensive industry that requires high manual dexterity and thus employs proportionally higher numbers of women. A cut flower operation requires between 25 to 30 employees per hectare of greenhouse at various skill levels.

Development of new floriculture greenhouses could take place either at existing geothermal sites, where heat is available downstream from a power plant or well field, or at locations where new wells are drilled to specifically supply the greenhouse business. The cost of building a greenhouse in Kenya for flower production is estimated at KSh 15 million to KSh 20 million per hectare, or between US$187,000 to $250,000. The cost estimate excludes the cost of land (real estate) and site improvements or infrastructure (roads, water, and electric power). By comparison, the cost in the US for similar greenhouse structures is in the range of KSh 25 million to KSh 50 million per hectare or about US$312,000 to US$625,000.

Planning a new greenhouse at a geothermal site requires the following considerations in addition to the geothermal resource parameters:

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• A flat plot of land of sufficient size is required to construct the greenhouses. The slope should not exceed 2%. About 20% of the surface should be planned for facilities and service roads. Future potential expansion should also be considered during initial planning.

• Fresh water needs to be available in close proximity (well or surface water). The water quality must be tested to determine its suitability for plant irrigation. Greenhouses require between 20 million to 40 million liters per hectare per year of irrigation water. Data like depth to water table, flow rates, water quantity available, etc. will assist in evaluating a site.

• Electric power utilities and load capacity.• Transportation infrastructure, roads and access, especially for trucks,

distance to major transportation routes, travel time to Jomo Kenyatta International Airport in Nairobi.

• Labor supply or available workforce near the site.• Potential cultural adaptability of local labor to working in an enclosed

greenhouse (e.g., pastoralist communities could find strange and confining).

• Land ownership and availability for business development at or in the vicinity of the geothermal site.

• Climate data to properly design heating/cooling requirements for greenhouses, i.e. long term monthly, daily, hourly temperatures; heating degree days; relative humidity profile; solar insolation or cloud cover data; wind speeds and direction.

The following are the VEGA/PAA project team’s overall recommendations for the development of Direct-Use geothermal for the commercial greenhouse sector in Kenya. These recommendations could be implemented in a step-by-step manner, or, depending on the availability of funds and human resources at the GDC, simultaneously.

• Develop one of the GDC geothermal sites, such as Menengai or Kabarak, for demonstration projects of geothermal DU technologies. Specifically, this site should include a geothermally-heated greenhouse with a cascaded geothermal aquaculture (fish farm) facility. The greenhouse could be used for growing tree seedlings for restoration of drilling and exploration sites of GDC; for the production of vegetables for local consumption; or for the production of cut flowers for the Nairobi market. An experienced horticulturist should be hired to manage this greenhouse facility. The project should also involve the regional agricultural colleges and universities to host student interns and sponsor research projects. Lastly, the facility should schedule regular tours and open-house events for schools, government officials, the floriculture industry – especiallyfloriculture business representatives, and the public. It is understood that this is the first option that the GDC will pursue in late 2013 through to early

20-40 million litres of fresh water is required by greenhouses to irrigate per hecter per year


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2014. Therefore, following this section, we include below, an analysis of what such a demonstration greenhouse and fish farm (aquaculture) pilot project would look like and what it could cost to install and operate on 2 hectares. We suggest implementing a project that demonstrates the benefits of cascading geothermal energy.

• Develop a business incubator facility for a geothermal floriculture business. This incubator facility would consist of a 5 to 10 hectare greenhouse complete with geothermal heating, electric power, cold storage, and processing buildings. The facility would be leased to Kenyan entrepreneurs who want to start a floriculture business. By providing the basic facilities (the greenhouse ‘shell’ and processing buildings) the entrepreneur could get started without a large capital investment on his/her part. The only initial investment required from him/her would be in the plant stock, the hydroponic system, and processing equipment. Operational expenses incurred by the entrepreneur would be for materials and supplies; labor; transportation; and marketing. A five to seven year lease period is a reasonable time for the entrepreneur to develop his/her business to stand on its own; and accumulate enough capital and experience to finance his/her own facility afterwards. After this period, the client-tenant would move on to build and operate his/her own greenhouse. The facility would then be leased to the next business entrepreneur. The lease agreement with GDC would include access to the facility as a demonstration site for tours, public outreach, and recruitment of new floriculture businesses. The incubator facility could be located at the Kabarek site or in the Menengai industrial park.

• Develop a full-scale industrial park later at one of the GDC geothermal sites where GDC would sell geothermal steam or hot water to clients for use in industrial processing. The industrial park would be of sufficient size to lease to a variety of clients, including greenhouse operators. Water could be cascaded from other industrial processes and later used for greenhouse dehumidification. The minimum size for a floriculture greenhouse would be 10 hectares in order to make it an attractive investment for a Kenyan entrepreneur or company; however, larger sites offered to greenhouses would be better to compete in the existing market. The site would also require adequate fresh water, reliable electricity, and good access roads. Long-term leases for the land and long-term contracts for the geothermal fluids and electric power would make this an attractive option for the private sector.

• Investigate what financing or incentives may be available to local entrepreneurs for a geothermal powered greenhouse business start-up. This could be coordinated with the university business colleges in the region.

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Proposed Cascaded GDC Geo-Greenhouse and Geo-Acquaculture Facility The VEGA/PAA team deems it is feasible for GDC to develop a joint geothermal greenhouse and cascaded aquaculture facility as a key first step to its Direct-Use development efforts for the Menengai geothermal field. The objective is to demonstrate the benefits of the Direct-Use of Geothermal in the agricultural sector by installing an Aquaculture unit and a Greenhouse unit at the GDC demonstration plot in Menengai and utilizing the energy from the brine and/or waste heat from the Geothermal Power Plants to boost production and quality. This facility could also include a simple small dairy production plant on the front end.

1. Proposal

To install a combined geothermal greenhouse with cascaded aquaculture facility at GDC Menengai 5 acre site.

2. Greenhouse Unit Proposal

The proposal is to construct a multi-span fixed vented greenhouse of 11 bays of 7.2m span and 50m long giving a covered area of 3960m2 and covered with 200 micron diffused UVA greenhouse film. Each span will have 9 hydroponic troughs 20 x 40 x 20cm for the two rows of tomatoes/peppers. Each trough will be fed with two drip lines filled with pumice for the plants to root in. A trellis system is used to support the plants over each trough.

Tomatoes and Peppers are considered to be suitable crops for growing in the demonstration unit, as there is a significant domestic market demand for high quality product in Nairobi and other urban areas.

Water from the fish drain pond will be mixed with fresh water and pumped into the greenhouse drip lines, additional fertilizer as required will be supplied through a venturi and tube system into the supply line pipe feeding into the drip lines over each trough. Plant capacity will be approx. 24,750 plants in the 3960 m2 greenhouse.

The greenhouse will be heated at nighttime (and on cold days) by a system of pipes in a closed loop with a heat storage buffer tank. The buffer tank is heated using geothermal brine on the primary side of a plate heat exchanger. The secondary side is a closed loop system to the tank via a variable speed


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pump so as to maintain maximum temperature in the tank. The heat energy in the day is stored in the buffer tank for use during the night to heat the greenhouse in order to reduce the relative humidity to below 85%. This helps keep the plants dry and reduces the fungal threat and use of fungicides.

Productivity, cost and revenue generation from the greenhouse will depend on what crops are grown. Initially tomatoes and peppers would seem to be ideal as they will benefit from the heating and should be able to be marketed locally. The greenhouse will require up to four trained people for maintenance and harvesting of the crop.

Below is a summary of the proposed GDC activity:

Tomato Production 30 to 40 tons/ha producing 12 tons per year.Growing Period All year with 8-10 week plant maturityRevenue US$ 400/ton - $4800 per yearCost of Production US$ 40/ton - $480 per year

3. Geo-Aquaculture Proposal

The proposal is for GDC to build and operate a small tilapia fish farm where thewaterismaintainedatanoptimaltemperatureof27–300Cbyheatingthe pond water using the brine from the geothermal wells such that the fish have maximum growth rate. Tilapia will be easier to market in the county compared to catfish but it does have a slower growth rate.

The flow through water from the fish farm is collected in a pond and after filtering is used to irrigate and fertilize the crops in the adjacent greenhouse and thereby minimize the water utilization and reduce the cost of fertilizers. Heat from the geothermal brine is stored in a hot water buffer tank during the day for use at night when it is circulated through pipes in the greenhouse to increase the inside temperature and reduce the relative humidity. The benefit will be increased yield and quality through a reduction in fungal diseases and fungicidal sprays. Initially the crops grown would be tomatoes and peppers.

4. Water Supply

Water from the GDC boreholes in Menengai is needed at the rate of approximately 25 m3 per day (Aquaculture 8m3/day and Greenhouse 17m3/day) will either be used directly or after RO (Reverse Osmosis) treatment in both the fishponds and the greenhouse. Rain water harvesting from the

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greenhouse and aquaculture tunnel plastic (approx. 3500m3/year) can be collected in the reservoir and pumped into the system so as to help reduce water consumption.

5. Aquaculture Unit

Fishponds will be under three plastic sheet tunnels (12 m x 66 m long) to maintain warmth and for protection from predators. Inside the first tunnel will be two 15 x 8.5 m nursery ponds and the 30 x 8.5 m grow out pond. The remaining two tunnels will each have two 30 x 8.5 m ponds for outgrowing. The ponds will be lined with a HDPE liner. Each pond will have a fresh water inlet through a 3-way valve for controlling the temperature. Each pond will have an outlet that is piped to the drain pond. The ponds will have a paddle wheel aerator to increase oxygen levels at night and early morning. The borehole water (either before or after the RO) will be heated in a plate heat exchanger where the primary side uses the waste heat and/or brine from the geothermal wells/power plants.

Below is a summary of the proposed GDC activity:

Production Growing cycle of 6 months 1 month in the nursery pond 1gram to 30 grams 5 months in grow out ponds 30grams to 400 grams Stocking Density 25 fish/m2 in nursery pond 10 fish/m2 in grow out pondsMortality Rate 20% in the nursery pond (10%mortality & 10% culling) 5% in the growing pondsProduction Stocking in nursery Pond 3350/month Stocking in grow out ponds 2650/monthSales 2500 pieces/month at 400grams = 1000kg TilapiaRevenue CurrentsalepriceKsh330/kg–Ksh330,000/month ($45,000/yr.) Production Costs Fish Food Good quality food currently has to be imported and accounts for 70% of the production cost at approx. Ksh 195 per kg of fish.Fingerlings Costs are Ksh 10 per 0.5 gram fingerling, which equates to Ksh 35 per kg of fish based on 3350 fingerlings per month and annual production of 12 tons.Labor 2 employees will be needed to operate the fish farm


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6. Infrastructure

To support the Aquaculture/Greenhouse production the following additional facilities will be required:

• Office/Storesbuildingof90m2

• Processingareaof160m2 with cold stores and refrigeration plant.• ReverseOsmosisplantina36m2 building.• FertigationPumphouseof72m2 with pump units for the GH heating system.• Electricalswitchboardandstandbygeneratorbuildingof24m2

• ElectricFenceandEnergizersystem

The flow through Aquaculture/Greenhouse system is easier to manage and maintain than an aquaponics system, which leaves very little room for error and requires higher technical management and supervision. It is recommended that if GDC desires to operate aquaponics, that it be implemented in a second future phase. The benefits of Direct-Use Geothermal energy will be immediately evident in both the aquaculture process and the greenhouse in production output and quality, with the added benefit of reduced fertilizer cost by using the same water.

Figure 9 below provides a schematic as to how to possibly lay out a dual-use cascaded Direct-Use facility. An approximate cost estimate is also provided in the following table, at about US$ 558,000 or about KSh 48.5 million to establish this combined Direct-Use facility at Menengai.

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Figure 9: Schematic of possible set-up for a cascaded pilot Direct-Use geothermal facility at the Menengai 5 acre site.

GDC Geothermal Direct use Demo Unit, Menengai


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Table 5: Cost EstimateAquaculture/greenhouse unit on GDC Menengai Demonstration plot

Description Units Unit cost US$ Quantity Total cost US$

1. Infrastructure Works

Site leveling Hours 100 24 2,400

Ponds excavation Hours 100 90 9,000

Electric fencing m 10 590 5,900

Road & pathway works prov. sum 2,500 1 2,500

Office/store building m2 295 90 26,550

RO building m2 295 36 10,620

Processing building m2 295 162 47,790

Fertigation/pump house m2 295 72 21,240

Electric supply/generator cubicle m2 295 24 7,080

Tank bases m2 20 26 520

Standby generator pcs 23,500 1 23,500

KP transformer & switchboard prov. sum 20,000 1 20,000

Sub Total 177,100

2. Water Supply Reserve osmosis plant prov. sum 20,000 1 20,000

24 m3 storage tanks pcs 2,850 2 5,700

Sub Total 25,700

3. Aquaculture unit Fish tunnel pcs 9,360 3 28,080

Pond liner prov. sum 8,170 1 8,170

Paddle wheel aerator prov. sum 3,500 7 24,500

Water supply piping prov.sum 3,500 1 3,500

Drain system piping prov. sum 2,500 1 2,500

Drain pond m2 4 400 1,600

Plate heat exchanger pcs 12,000 1 12,000

3 way mixing valves prov. sum 2,500 1 2,500

Sub Total 91,250

4. Greenhouse unit 11 Bay x 7.2m x 50m lng G/Hse m2 12 3960 45,540

20 x 40 x 20 Troughs - 9/bay m 3 4950 13,613

Irrigation system pcs 5,300 1 5,300

Trellis support system m 1 4950 6,435

Mobile cart spray system pcs 4,875 1 4,875

Sub Total 75,763

5. Greenhouse heat system Buffer heat storage tank prov. sum 15,000 1 15,000

VSD pump system prov. sum 10,000 1 10,000

Plate heat exchanger prov. sum 12,000 1 12,000

Transfer pump system prov. sum 6,500 1 6,500

Distribution piping prov. sum 38,500 1 38,500

Electrical sub panel prov. sum 10,000 1 10,000

Sub Total 92,000Continues next page

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Description Units Unit cost US$ Quantity Total cost US$

6. Processing area Cold stores & fridge plant prov. sum 15,000 2 30,000

Tables, trolleys etc prov. sum 3,000 1 3,000

Sub Total 33,000

7. Rain water harvesting Reservoir excavation Hours 100 50 5,000

Reservoir lining m2 4 1100 4,400

Pump and piping prov. sum 3,500 1 3,500

Sub Total 12,900

Sub Total 507,713

10% Contingency provision 50,771

Grand Total US$ 558,484

Greenhouses Pre-feasibility StudyOctober 2013

Documents

Priority Geothermal Direct-Use Applications for Kenya