RAISING THE BAR POSITION OF GEOTHERMAL ENERGY TODAY
Alexander Richter Canadian Geothermal Energy Association (CanGEA) ThinkGeoEnergy.com @thinkgeoenergy 12 October 2012
• Collective voice of Canada's geothermal energy industry
• Non-profit industry association • Industry promotion & promotion
of potential • Outreach events • Geothermal Reporting Code • International representation
(IEA-GIA)
THE ROLE OF GEOTHERMAL TODAY
GEOTHERMAL UTILIZATION
Current & Planned Capacity
611
204
167
536
575
843
958
628
1,970
1,197
3,093
674
86
363
0
225
77
182
612
530
2,303
2,307
Other El Salvador
Kenya Japan
Iceland Italy
Mexico New Zealand
Philippines Indonesia
United States
2010 Additional capacity planned till 2015
GEOTHERMAL ELECTRICTY in TWh, IEA 2008
Coal Gas Hydro
Nuclear Oil Wind
Biomass
Waste
PERCEPTION AND POSITION OF THE INDUSTRY
“Geothermal energy, potentially the largest – and presently most misunderstood - source of energy” Al Gore, Our Choice
“The amount of geothermal energy potentially available is effectively unlimited” Steven Chu, U.S. Secretary of Energy
PERCEPTION
PERCEPTION
Bathing monkeys in Jigokudani hot springs, Japan
PERCEPTION
PERCEPTION
Geothermal Energy Geo(thermal) Power, Geothermal Heat, Geo-Exchange
REPRESENTATION
Government Industry Industry Associations IEA
POSITIONING
Marketing Representation Advertisement Visibility
POSITIONING
OUTLOOK FOR THE INDUSTRY
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MW
High Case
Base Case
Installed 2008
US carbon legislation and National RPS drives sustained growth in the US. This is complemented
by significant growth in Indonesia and the Philippines. Niche low-temperature and EGS activity
picks up momentum in Australia, and to a lesser extent in Central Europe
Near-term growth driven by the US, New Zealand, and
increased activity in Indonesia and Turkey
Increased growth internationally, with Southeast Asia, Latin America, Chile,
Mexico, and East Africa complementing steady growth in the US. Mega-scale projects in New Zealand also brought
online, with potential for additional growth in Iceland
Transmission, Permitting, Supply Chain Scaling, and Natural Gas Volatility
Source: Emerging Energy Research
Source: Islandsbanki – Presentation GRC 2010
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year …
Exploration Phase
Pre-Feasibility
Feasibility
Detailed Design & Construction
Operation & Maintenance
PROJECT TIMELINE
Explorat.
Detailed Design & Construction
Pre-Feas.
Operation & Maintenance
Feasibility
Comment: Permitting for exploration and development can – in some cases – add up to one additional year to this time frame.
Source: Glitnir
VALUE CHAIN Start-up Exploration/
Pre-Feasibility Feasibility
Detailed Design & Construction
Start of Operation
Venture Capital
Development Equity
Drilling Equity
Project Equity
Tax Equity
Mezz./ Bridge Debt, Const. Financing
Project Financing
• Drilling of first successful, full-sized production well.
• Confirmation Wells, • Reserve Estimates • Preliminary Design
• Drilling & testing of remaining production and injection wells
• Civil works required • Final design & testing
• Running & maintaining power plant
• Possible Extension of Plant
• Geophysical surveys • Geochemical and geological data collection & analysis
• Temperature gradient drilling • Focused Exploration on most favorable resource area
• Sufficient Exploration data collected & analyzed
• Legal Work • Concession/ Lease • Permits
Source: Islandsbanki
BUSINESS MODEL
MARKET STIMULATION
Driving demand
Supporting development
Financing stimulation
• Feed-in-tariffs • Renewable Portfolio Standards
• Drilling grants & loan programs • Insurance tools
• Loan guarantees • Production/ Investment tax credits
• Carbon credits, IFC, World Bank • GeoFund, Development Banks.
Other drivers
SUMMARY
• Marginal role of geothermal in global picture • Important role for many countries • Lack of political support • Lack of visibility • Concerted efforts in promotion to public and
politics necessary