Upload
thinkgeoenergy
View
1.639
Download
1
Tags:
Embed Size (px)
DESCRIPTION
Presentation given at the Renewable Energy Finance Forum (REFF) Germany 2012 in Berlin, Germany on February 29, 2012 It was given in a panel on Solar, Biomass and Geothermal at this all-renewable finance conference. It was my third time presenting at this forum (2x in London and in Berlin)
Citation preview
GEO(THERMAL) POWER & HEAT … the sleeping potential
Alexander Richter Canadian Geothermal Energy Association (CanGEA) ThinkGeoEnergy.com @thinkgeoenergy 29 February 2012 – REFF Germany, Berlin
Heat pumps"Geo-"Exchange
Geothermal heat
Blue Lagoon, Iceland
Geo(thermal) power Wairakei Geothermal Power Plant, New Zealand
Land use – Based on Acres/ 1GWh
What geothermal offers
• Base-load capacity of 90% and more • No fuel cost • Long running time • Heat & power • Little land use – visibility • Utility returns over long period of time
Geothermal systems
Hydrothermal/ Conventional Geothermal EGS
Depth In km
1 2 3 4 5 6
Heat map
Temp. at Depth 3.5 km
Heat map
Temp. at Depth 5.5 km
Heat map
Temp. at Depth 7.5 km
Heat map
Temp. at Depth 9.5 km
Exploration risk
• Exploration risk = Drilling risk • Finding sufficient water (as carrier of heat) • Finding sufficient heat
Risk mitigation
• Better resource data • More initial studies, e.g. temperature gradient drilling,
slim hole drilling • Exploration risk insurance (private or governmental)
MARKETS
Global potential
4,100
43,000
0
16,100 174
14,000
3,900
74,300
640 9,000
1,060 4,200
665 4,300
Current installed capacity in region Potential capacity in region
510
28,600
Geothermal power generation capacity
611
204
167
536
575
843
958
628
1,970
1,197
3,093
674
86
363
225
77
182
612
530
2,303
2,307
0 1,000 2,000 3,000 4,000 5,000 6,000
Other
El Salvador
Kenya
Japan
Iceland
Italy
Mexico
New Zealand
Philippines
Indonesia
United States
2010
Additional capacity planned till 2015
Capacity additions by country
• …..
31 October 2011 GEOTHERMAL – MARKET OUTLOOK
© Bloomberg New Energy Finance 2011
Strictly no copying, forwarding, shared passwords or redistribution allowed without prior written permission of Bloomberg New Energy Finance. For more information on terms of use, please contact [email protected]. Copyright and Disclaimer notice on page 16 applies throughout. Page 3 of 14
targets, resource potentials and electricity market dynamics allowing us to extend our forecast beyond the current pipeline, country by country, to 2030.
Project announcements in Japan, Turkey and East Africa should drive up our forecast estimates in Q4. These markets are not alone, but they are some of the most notable movers of late. New project announcements are coming out of these markets almost weekly, with Marubeni now planning projects in Japan; Enel announcing it owns 142 concessions in Turkey with 26 more up for auction soon; and Kenya, Ethiopia, Djibouti, Rwanda and others in the Rift Valley revealing plans to tap geothermal resources to meet growing electricity demand. Right now we forecast these countries adding an aggregate 435MW by end-2017, but as announced intentions transition to projects we expect this number will actually be much higher.
We still expect most growth to occur in Indonesia, with the country adding another 1.1GW by end-2017 and growing at an average of 11% per year. We are hesitantly optimistic that the federal and provincial governments will arrive at workable solutions to facilitate companies in obtaining necessary permits. Pertamina Geothermal Energy (PGE) has told Bloomberg New Energy Finance it expects to be the trailblazer on this as it seeks to advance development on its 15 concessions. And beyond the red tape, the incentives being pushed by the Indonesian government – the drilling risk fund, relaxed import duties, pending $120–130 feed-in tariff (FiT), and others – are all steps in the right direction to encourage investment.
Figure 2: Historical and expected global capacity additions by country, 2006–15 (MW)
Source: Bloomberg New Energy Finance
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Rest of world
Philippines
Mexico
Kenya
New Zealand
US
Indonesia
701
381427
337 310
245
421
497
751715
-46% 12% -21% -8% -21% 72% 18% 51% -5%
Source: Bloomberg New Energy Finance
FINANCING GEOTHERMAL PROJECTS
Financing geothermal projects
Start-up Exploration/ Pre-Feasibility
Feasibility/ Resource Verification
Detailed Design & Construction
Start of Operation
Venture Capital
Development Equity
Drilling Equity
Project Equity
Tax Equity
Mezz./ Bridge Debt, Const. Financing
Project & Vendor Financing
• Developers
• IPPs (Development Pipeline)
• Resource Speculators
• Venture Capitalists
• Private Equity
• Public Markets
• Financial Partners
• Private Equity
• Strategic Partners
• Financial Players
• Large IPPs with ability to monetize PTCs
Source: Islandsbanki
Key concerns by investors/ banks
• Natural resource exploration vs. energy finance • Experience & know-how • Creditworthiness of smaller firms • Exploration risk • Technology
Approach by developers
• Experienced teams & partners • Portfolio (geographical diversification) • Portfolio (additional technologies) • Portfolio different project stages (EDC, buy-ins) • Regional focus with availability for carbon credits,
development bank money and excellent resources
• German answer: – Drilling/ exploration risk insurance (SwissRE, Marsh,
MunichRE) – Vendor investment & finance (Daldrup, Wasabi
Energy)
New finance market emerging
• Vendor and/ or EPC contractor financing • Bridge loans • Operator JVs • IPP JVs • Tax monetization
Geothermal Reporting Code • Background Mining Reporting Codes & Security
Commissions, listed companies mining firms • Confidence in geothermal investment decisions • Establish growth and/or income investment potential
(stage of project) • Understand the significance of the results • Assist with comparable analysis!• Understands risks and limitations of the data • Confidence in those who prepared the technical
information (“Qualified Persons”) • Other efforts: European Geothermal Energy Council
Germany’s Renewable Energy FIT • Erneuerbare-Energien Gesetz – Einspeisetarife • Guaranteed payments per generated kWh
EUR/ kWh USD/ kWh
Base (combined heat & power, early start-up bonus) 25 cents 33.6 cents
Technology bonus (petro-thermal) 5 cents 6.7 cents
Total possible: ! 30 cents! 40.3 cents!
Price to developer U.S. 7-10 cents
Price to developer Philippines 3-5 cents Annual degression of 5% from 2018
• Germany: 5 MW installed/ 90% capacity – ~EUR 11.8m/ year
Contact Alexander Richter Canadian Geothermal Energy Association (CanGEA) [email protected] ThinkGeoEnergy.com [email protected] Follow me:
Twitter: @thinkgeoenergy LinkedIn Group: ThinkGeoEnergy Flickr.com/thinkgeoenergy YouTube.com/thinkgeoenergy Slideshare.com/thinkgeoenergy