Fernando Sanchez Penarroyo - Overview of the Global Geothermal Energy Development Marketplace
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Transcript of Fernando Sanchez Penarroyo - Overview of the Global Geothermal Energy Development Marketplace
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Overview of the Global Geothermal
Energy Development MarketplaceFernando S. Pearroyo
DirectorInternational Geothermal Association
7th Asia Clean Energy Forum
08 June 2012, Asian Development Bank Manila
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Presentation Outline
State of the marketplace
Technology
Financing schemes Risk mitigation
Challenges
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World Geothermal Electricity (2005)
Bertani (2005) WGC2005
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2010 Capacity and Use
Installed Energy
Power Use Capacity
Use (MW) (GWh/yr) Factor
Electric 10,715 67,246 0.72
Direct-use 48,483 117,778 0.28
Lund and Bertani, 2010, WGC and GRC
Geothermal energy kept its promises!
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June 19, 2012
61950 1960 1970 1980 1990 2000 2010
Bertani, 2010, WGC
18,500 MWe in 2015
World Geothermal Electricity (2010)
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2010 Worldwide Annual Use (TJ/yr)
June 19, 2012
Geothermal heat
pumps 49.0%
Others 0.2%
Space Heating
14.4%
GreenhouseHeating 5.3%
Aquaculture pond
heating 2.6%
Agricultural drying
0.4%
Industrial uses
2.7%
Cooling / snow
melting 0.5%
Bathing andswimming 24.9%
Lund and Bertani, 2010, WGC and GRC
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2010 Worldwide Installed Capacity (MWt
June 19, 2012
8
Industrial uses
1.1%
Cooling / snow
melting
0.7%
Bathing and
swimming
13.2%
Geothermal heat
pumps
69.7%
Agricultural drying
0.3%
Aquaculture pond
heating
1.3%
Greenhouse
Heating3.1%
Space Heating
10.7%
Others
0.1%
Lund and Bertani, 2010, WGC and GRC
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IEAs Top 15 geothermal energy producing
countries, electricity and heat in 2009
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Great East Japan Earthquake
Earthquake and tsunami on 11 March 2012
Fukushima I Nuclear Plant and other nuclear andthermal plants were severely damaged
No serious effects on geothermal plants in Tohokuregion
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Photo: TEPCO
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Statement by Former PM Kan at the G8
Summit in Deauville on 26 May 2011
Japan will now review the energy basic plan. We must nurture the two new pillars of
renewable energy and energy-efficiency,
in addition to the two pillars to date of
nuclear power and fossil fuels. We will engage in drastic technological innovation in order to
increase the share of renewable energy in total electric power
supply to at least go beyond 20 percent by the earliest
possible in the 2020s.
We aim to introduce large scale offshore wind turbines, next
generation biomass fuels from algae etc., biomass energy,
and geothermal energy by mobilizing Japanese technology.
- Jiro Hiratsuka, Climate Change Policy Div., Ministry of the Environment, Japan
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Closing the nuclear power plants inGermany
Security tests
Ethics Commission
June 30th, decisionof the parliament to
close all nuclearpower plantsforever until 2022
- Prof. Dr. Horst Rueter
March 11th, 2011 Earthquake, tsunami and nuclear accident inFukushima
March 15th, Moratorium, closing of the 10 oldest plants (Merkel)
Unterweser, Brunsbttel, Krmmel, Biblis A und B, Philippsburg 1, Isar 1
sowie Neckarwestheim 1.
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Icelands Primary Energy Consumption 1940-2009From an under-developed to a highly industrial country in few decades, Dr. Bjarni Plsson
Central America C rrent Geothermal electric
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Central America Current Geothermal-electricInstalled Capacity (Gutierez-Negrin, MGA)
Country MW
Mexico 958.0
Costa Rica 207.1
El Salvador 204.4
Nicaragua 123.5
Guatemala 52.0
Total in the region 1,545.0
~14% of the worldwide
geothermal-electric
capacity (10,715 MW)
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South America and Africa
Abundance of resources such as oil, gas, and hydro- energy policies and strategies in South Americahave excluded renewables and other alternatives
as being too costly and technologically unfeasible Eastern Africa has an estimated geothermal
resource potential of over 7,000 Mwe but high
upfront costs and risks associated with exploration
drilling remain the greatest obstacles. Investmentin the geothermal sector is still hindered by
unsupportive regulatory, institutional and financial
conditions.
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TECHNOLOGY
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Innovative exploration techniques
Magnetotellurics
Microseismic interpretation
3D modelling
High temperature logging techniques Infra-red for surface monitoring
Geochemical modelling
- Dr. Colin Harvey, GNS Science, Past President New Zealand Geothermal Association
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June 19, 2012
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Enhanced Geothermal Systems EGS
Source: http://hotrock.anu.edu.au
Most heat is contained in therock, but:
if rock is impermeable howdo you circulate water?
how do you get injector andproducer tocommunicate?
fracturing
Sometimes known as Hot, DryRock
In Australia, HFR is notconsidered as a risky
technology the appropriateapplication of HFR techniquesis regarded as the bestgeological risk mitigation
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Direct Use Technology Developments
Space heating and cooling with Geothermal Heat Pumps
(GHPs)
Geostructures, e.g. Energy Piles
GHPs for large building complexes
- Ladislaus Rybach, Institute of Geophysics ETH Zurich, Switzerland
P H
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Process Heat
Innovation in
New Zealand
- Dr. Colin Harvey, GNS Science
Largest industrial direct geothermal heat use inthe World (~200 MWth ; 5300 TJ/yr)Norske Skog Paper Mill
Two World class pulp mills using rawgeothermal steam for drying
World class large scale greenhouses and formilk product drying
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Globally installed geothermal heat pump capacity
Data from Lund et al. (2010)
Growth rate: 20 % per year
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Terminal E, Zurich airport
85,200 m2 energy supply area 2120 MWh/a heating, 1240 MWh/a cooling load 310 energy piles 30 m
- Ladislaus Rybach, Institute of Geophysics ETH Zurich, Switzerland
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Development complex Suurstoffi at Rotkreuz near Lucerne, Switzerland
1st development stage 230 flats + 11,000 m2
Heating and DWW 1.8 GWh, cooling 1.0 GWh
- Ladislaus Rybach, Institute of Geophysics ETH Zurich, SwitzerlandSource: Wagner/Geowatt AG (2011)
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Development site Suurstoffi at Rotkreuz near Lucerne, Switzerland
Status in September 2011- Ladislaus Rybach, Institute of Geophysics ETH Zurich, Switzerland
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Geothermal stores at Science City, ETH Zurich
(now in construction)- Ladislaus Rybach, Institute of Geophysics ETH Zurich, Switzerland
Total 4 mio m
3
, >700 BHEs 200 m, Total cost ~ 40 MCHF
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FINANCING
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The Challenge: Accessing Capital
The main support instrument utilized in the EU is
feed in tariff, i.e. a fixed and guaranteed price paid
to the producers of electricity from RE
Geothermal developers who wish to accesscapital must have strong resource prospects, an
understanding of the developers game plan to
gain comfort with risks, and experience.
Resource identification, resource evaluation, testdrilling: the three earliest and highest risk
development phases are the most difficult for
raising capital.
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Three approaches to raising
early-stage funding
Private equity placements of a portfolio of projects
Exchange-traded corporate equity financing
Balance sheet financing (effectively a combinationof corporate debt and retained earnings) by more
established companies
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RISK MITIGATION
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Insurance and risk coverages different approaches:
Geological risk insurance system (France)
Risk guarantee system (Switzerland, Germany)
Exploration risk insurance (Unterhaching by Munich Re)
Productivity guarantee insurance - insures the risk offinding geothermal reservoirs, which do not have sufficient
discharge for the feasible economic development of ageothermal project.
- Michael Schneider, KONSENS KG, Germany
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US Resource risk management tends to
be handled by a combination of:
Technical approaches (application of best practices for
exploration, development and resource management,
based on a significant body of resource developmentexperience)
Commercial approaches (risk pooling, joint ventures,
equity funding)
Government / regulatory / legislative approaches (price
supports and tax mechanisms, cost-shared funding)
- Ann Robertson-Tait, Roger Henneberger and Subir Sanyal, GeothermEx
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US Federal and State Policies andIncentives
Tax incentives
Inter-agency coordination and streamlining of federal
permitting and land lease processes Renewable Portfolio Standards
Greenhouse gas emission reduction policies
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CHALLENGES
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Technical barriers
While some high temperature hydrothermal arecompetitive, many geothermal technologies are moreexpensive than fossil plants (but may be lessexpensive than other RE sources like solar and wind)
Large differences and cost ranges per technologymake it difficult for project finance
Some new technologies have yet to be developed andtested commercially
According to the International Energy Agency, EGSwill only become commercially available after 2025 Data from non conventional geothermal and EGS
geothermal heat deployment are scarce
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Risk Factors
Foreign equity ownership
Availability of geo-scientific information and
professionals
Area status and clearance, conflict with other land
use, surface/land ownership
Procedural efficiency and clarity between
government agencies Environmental issues - Judicial intervention and
opposition by some sectors of civil society
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Market facilitation and transformation
Development of more competitive drillingtechnology (e.g. exploration-only drilling,directional drilling)
Introduction of guarantee schemes Development of publicly available database
protocols and tools for geothermal resourceassessments
RE Financial Program geologic risk insurance,facilitate access to risk capital
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Development of guidelines for the
following mechanisms
Resource reporting
Renewable Portfolio Standard
Inclusion of the following technology for Feed-inTariff Rates
Enhanced geothermal systems
Low enthalpy
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Conclusion
Since 2005, a geothermal renaissance. New countries and
new companies have joined the geothermal community.
New technologies have been implemented. Lowerresource temperatures are now recoverable. EGS widens
the accessibility of geothermal energy.
BUT: Regulatory framework should be long term,
transparent, predictable and independently administered
As long as costs are higher than fossil fuel plants, economicand financial incentives are appropriate
Forms of support other than financing, like technology
sharing, training, & geological surveys are being used.
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About the Speaker
BS Geo, Bachelor of Laws (UP), Master of Laws (Univ.of Melbourne)
Director, International Geothermal Association
Trustee, National Geothermal Association of thePhilippines
Director, Clean Rock Renewable Energy Resources Corp.(Natib and Daklan RE Service Contract areas)
Professorial Lecturer, UP National Institute ofGeological Sciences
Managing Partner, Puno and Penarroyo Law(www.punopenalaw.com)