Drilling Down on Geothermal Potential: An Assessment for ... in C… · Assessment for Central...

Drilling Down on Geothermal Potential: An Assessment for Central America

Xiaoping Wang

Geothermal Energy Training World Bank, July 11, 2012

Geological Formation

Potential Geothermal Sites

¿Cuánta Inversión total? -1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Central America: net added capacity (MW), 1985-2010

Wind Steam-bunker Coal GT Cogen Geothermal Hydro Diesel Peak demand

¿Cuánta Inversión total?

Projection of Power Generation by Source/Technology, 2008-2030

Thermal to be replaced by Hydro, Gas and Coal…


Installed Geothermal Capacity in Central America (2008)


Estimated Geothermal Potential in Central America

Country Bundschuh, 2000 JBIC, 2006 Guzman, 2009

Costa Rica 2,900 750 900

El Salvador 2,210 362 700

Guatemala 3,320 480 1,000

Honduras 990 122 100

Nicaragua 3,340 992 1,200

Panama 450 42 n/a

Total 13,210 2,748 3,900

Screening Curves: Levelized Cost

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0% 20% 40% 60% 80% 100%

$

p

e

r

k

W

h

Capacity Factor

MSD HFO

Steam Turbine HFO

Steam Turbine Coal

Combustion T GO

Combustion T FO#4

Small hydro

Large hydro

Geothermal


Why has Geothermal not Been Developed More in the Region? Barrier No. 1 – Resource Risk


100% by Public

Sector

Risks shared by public and private sectors

•Risk Mitigation Funds

•Support to IPPs

•Separation of steam and power production

•Public-Private Partnership

100% by Private

Sector via Concession

Who Assumes Associated Risks?


Business Models Adopted in the Region

Costa Rica: the State take the entire resource and project development risks and receives the benefits of the project El Salvador: the Government forms a joint venture with a strategic partner through LaGeo Guatemala, Nicaragua and Honduras: concessions provided to public or private companies


Case of the Philippines in Geothermal Development

Riesgo del Recurso


Other Barriers

Financing

Legal & Regulatory

Resource Inventory

Social & Environmental

Sector Planning


Country Readiness Assessment for Central America

Ranking Upfront Risk Resource

Inventory

Integrated

Power Planning

Legal/

Regulatory

Social and

Environmental

Costa Rica 2 H M H M L

El Salvador 1 H M H S M

Guatemala 4 M M M M M

Honduras 5 L L L L M

Nicaragua 3 M S S H M

Panama 5 L L L L L

A = high (favorable); S= substantial; M= medium; L= low


WB Follow-up Activity (1): TA in Costa Rica

Objective of the study – Assess: (a) whether the net benefits of geothermal electricity production at a particular site would justify the negative impacts caused; and (b) how much and what kind of compensation would be necessary to offset the negative impacts.

Context -Geothermal are competitive to thermal generation as baseload -Potential geothermal sites are located inside the protected areas

Scope of the study: 1) Footprint of geothermal development 2) Likely impacts of geothermal development in protected areas 3) compensation schemes available for geothermal development


WB Follow-up Activity (2): Regional Geothermal Inventory

Objective: To assess the country/site readiness in participating in a possible geothermal resource risk fund

Eligible stage of development:

- Reconnaissance

- Exploration

17

L

M

H

N

Y

L

M

H

L

M

H

L

M

H

Red flags: national parks, protected areas, minorities

Resource must be not proven: exploration/drilling not complete

Quality information on:

- Surface manifestations (geological)

- Subsurface conditions (geophysical)

- Geochemical conditions

- Enthalpy

Probability of Good

Resource

- Cost to access site (road)

- Cost to deliver power to grid (transmission line, substation)

- Cost of competing generation

Likelihood of Commercial

Viability Environm. and Social

Constraints

- Ownership/right to use resource

- Ability to sell power

- Env. permitting and planning

- Institutional capability

Maturity of Enabling

Environment

Function of distance, terrain

Appropriateness of Stage of

Development

Our first screening to identify enough candidate sites for a Fund

Regularly repeat screening for Fund pipeline

Candidate Sites

N = No, Y = Yes; L = Low, M = Medium, H = High

Screening Methodology to Identify a Pipeline of Candidate Sites


Summary of Prioritized Sites

Country # of sites

prioritized

(31)

Probability

of Good

Resource

Environm.

and Social

Constraints

Likelihood of

Commercial

Viability

Maturity of

Enabling

Environm.

Chile 6 M-H L-M Medium High

Guatemala 4 High Low Medium Medium

Nicaragua 4 M-H Low Medium Medium

Peru 4 High L-M Medium Medium

Ecuador 3.5 M-H Low Medium Low

Costa Rica 3 High Low Medium Low

Mexico 3 M-H Low Medium Medium

El Salvador 2 High Low Medium Medium

Colombia 1.5 M-H Low Medium Medium

Country Assessment

19

Unrealized potential

Maturity Reconnaissance — Exploration — Drilling — Development & Electricity Production

Pote

nti

al u

nd

evel

op

ed M

W in

rel

ati

on

to

dem

an

d

Low potential, high maturity

High potential, high maturity

Low potential, low maturity

High potential, low maturity

El Salvador

Mexico

Costa Rica

Guatemala

Nicaragua Chile

Peru

Dominica

St. Lucia

Grenada

Ecuador

Nevis

Bolivia

Honduras

Colombia

Montserrat

Argentina Panama Venezuela

St. Vincent

Guadeloupe


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Drilling Down on Geothermal Potential: An Assessment for ... in C… · Assessment for Central...

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