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Hawaii geothermal presentation august 2012 rev2

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  • 1. Asia Pacific Clean Energy SummitChallenges and Opportunitiesin Geothermal Development in NewZealand and IndonesiaJon Lorentz AECOMAugust 2012
  • 2. World Market for Geothermal Energy (WGC) Installed 2010 Forecast by 2015 Increase to 2015 Country (MW) (MW) (MW)Indonesia 1179 3500 2300USA 3087 5400 2300New Zealand 628 1240 610Philippines 1904 2500 600Kenya 167 530 360 AECOM working inIceland 575 800 225 the Countries marked in RedMexico 958 1140 180Chile 0 150 150Nicaragua 88 240 150Turkey 82 200 120Russia 82 190 110El Salvador 204 290 90Italy 843 920 80Ethiopia 7.3 45 40Costa Rica 166 200 30Papua New Guinea 56 75 20Japan 536 535 0Geothermal Development in New Zealand and Indonesia September 25, 2012 Page 2
  • 3. Wayang Windu Unit 2 120 MW Geothermal Power Plant, IndonesiaGeothermal Energy Geothermal power generation is based on established technology Average generation cost of geothermal is significantly lower than most other clean energy sources Geothermal generation costs are mostly effected by: The quality of the resource Financing terms The knowledge and experience of the development team. The cost of generation is comparable to gas combined cycle plants Geothermal has a capacity factor of over 90% (Wind is 30-40%) making it ideal for base load power generation. It is renewable and relatively benign environmentally.Geothermal Development in New Zealand and Indonesia September 25, 2012 Page 3
  • 4. Project Risks Geothermal Risk Resource risk Reinjection risk Resource ownership and access risk Environmental and H&S risks Construction risk – Contracting Lahendong II 20 MW Geothermal Power Station, Indonesia methodology (EPC Delivery) Financial risk – Financing structure Market risk – Security of Power Purchase Agreement (PPA) Country and political risk – Insurance available. Project management and technical development risk - Knowledge and experience.Geothermal Development in New Zealand and Indonesia September 25, 2012 Page 4 Wayang Windu Unit 2 120 MW Geothermal Power Plant, Indonesia
  • 5. The Project Cycle – Risk and RewardEx World Bank Presentation The Valley of Death! Equity Debt BankabilityGeothermal Development in New Zealand and Indonesia September 25, 2012 Page 5
  • 6. The New Zealand Geothermal Market New Zealand power market – no incentives for geothermal A long history of Geothermal investment in exploration and test wells. Most developments have been associated with “brown-field” sites. Resource knowledge reduces development risk. New Zealand Govt. Has fully funded geothermal projects (Ohaaki and Wairakei. Indigenous Maori have invested in many smaller developments. Large scale developments: MRP (SOE) in “JV” with Maori Contact Energy – Private sector corporate.Geothermal Development in New Zealand and Indonesia September 25, 2012 Page 6
  • 7. New Zealand – Planning and Permitting Resource Management Act – based on the principle of Sustainable Development Resource consent application Environmental Impact Assessment Public consultation Public Notification & submissions Council hearings Appeal process – lodged with the Environment Court Time frame: Application preparation 2 years Council hearings 1 year Another 1-2 years if appeal to Environment CourtGeothermal Development in New Zealand and Indonesia September 25, 2012 Page 7
  • 8. Tauhara North No. 2 Trust Geothermal Development Tauhara North No.2 Trust established to manage the Tauhara land block on behalf of the indigenous Maori owners. Trust vision: Hold fast to your land; make use of your land; for future generations. 34.5 MW Rotokawa GPP (Operating) In 1999, established a JV with MRP (Major power utility) & purchased the rights to Ngatamariki 140 MW, Nga Awa GPP (Online 2010) 82 MW Ngatamariki GPP. (Online 2013) 80-110 MW Rotakawa GPP extension planned. 2012 the Trust increased equity in Nga Awa from 10% to 35%.Geothermal Development in New Zealand and Indonesia September 25, 2012 Page 8
  • 9. Indonesia Geothermal Market Approximately 80 million people in Indonesia have no access to electricity Generation is predominantly coal and gas and electricity is subsidised. Indonesia has a geothermal resource potential of 27,500MW (T > 250 C). 44 Projects in development. Exploration, test wells and 1st Plant funded through NZ AID. Development issues: State Electricity Co. is the single buyer – favour coal. Sovereign risk. Land ownership and access. Concessionaires have difficulty raising equity exploration.Geothermal Development in New Zealand and Indonesia Geothermal Steamfield Pipe 2012 September 25, Page 9 Reroute, Papua New Guinea
  • 10. Indonesia - Planning and Permitting Structured environmental reporting: EIA Environmental Base Line Report Environmental Management Plan Environmental Monitoring Plan Decision making by central Government (Ministry of Mines and Energy). Limited third party input into decision making Use of Environmental Standards Emphasis on environmental management and monitoring. Ability to vary permitsGeothermal Development in New Zealand and Indonesia September 25, 2012 Page 10
  • 11. Indonesia - Development Progress Indonesia Government Sector Exploration by earlier donor support Pertamina Geothermal Energy (PGE) State Oil Co. funded exploration World Bank, Asian Development Bank, KfW, JBIC, assisted in funding projects Indonesia IPPs Chevron with PGE Supreme Energy – JV with GDF Suez and Sunitomo (JBIC) Star Energy – Funding off balance sheet. Origin / Tata JV. Funding off balance sheet.Geothermal Development in New Zealand and Indonesia September 25, 2012 Page 11

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