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Geothermal Power for the Entrepreneur in India with EcoUrja

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Geothermal Power in India is bound to grow after the impending pronouncement of the policy by the MNRE.The presentation looks at what is Geothermal Power, Its prevalent status in India and the ...

Geothermal Power in India is bound to grow after the impending pronouncement of the policy by the MNRE.The presentation looks at what is Geothermal Power, Its prevalent status in India and the opportunities for the entrepreneur in India, EcoUrja with its vast experience in Project development in such sunshine areas of renewable energy like solar PV and Solar Thermal provides solutions for project development in India.

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Geothermal Power for the Entrepreneur in India with EcoUrja Geothermal Power for the Entrepreneur in India with EcoUrja Document Transcript

  • Geothermal Power for the Entrepreneur in India G.Subhash, Deepak Mishra and Himadri Banerji1. Introduction1.1. Geothermal power (from the Greek roots geo, meaning earth, and thermos, meaning heat) is power extracted from heat stored in the earth. This geothermal energy originates from the original formation of the planet, from radioactive decay of minerals, and from solar energy absorbed at the surface opportunity.1.2. NHPC has been engaged as the nodal agency by Ministry of New & Renewable Energy (MNRE) for development of Geothermal Power in India.1.1. Geothermal energy is the earth’s natural heat available inside the earth. This thermal energy contained in the rock and fluid that filled up fractures and pores in the earth’s crust can profitably be used for various purposes. Heat from the Earth, or geothermal Geo (Earth) + thermal (heat) — energy can be and is accessed by drilling water or steam wells in a process similar to drilling for oil. Geothermal energy is an enormous, Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • underused heat and power resource that is clean (emits little or no greenhouse gases), reliable (average system availability of 95%), and homegrown (making us less dependent on foreign oil). 1.2. Several geothermal provinces in India characterized by high heat flow (78-468 mW/m2) and thermal gradients (47-100o C/km) discharge about 400 thermal springs. After the oil crisis in 1970s, the Geological Survey of India conducted reconnoiters survey on them in collaboration with UN organization and reported the results in several of their records and special publications (G.S.I., 1987; G.S.I., 1991, These investigations have identified several sites which are suitable for power generations well as for direct use. These provinces are capable of generating 10,600 MW of power.1.3. Though geothermal power production in Asian countries like Indonesia, Philippines has gone up by 1800 MW in 1998, India with its 10,600 MW geothermal power potential is yet appear on the geothermal power map of the world Availability of large recoverable coal reserves and a powerful coal lobby is preventing healthier growth of non-conventional energy sector, including geothermal.1.4. However, with the growing environmental problems associated with thermal power plants, future for geothermal power in India appears to be bright. Several IPPs engaged in non-conventional energy projects are frantically searching for foreign financial institutions to develop geothermal based energy sources. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 1.5. Geothermal resources range from shallow ground to hot water and rock several miles below the Earths surface, and even farther down to the extremely hot molten rock called magma. Mile or more-deep wells can be drilled into underground reservoirs to tap steam and very hot water that can be brought to the surface for use in a variety of applications.1.6. India has reasonably good potential for geothermal and potential geothermal provinces can produce 10,600 MW of power. But yet geothermal power projects has not been exploited at all, owing to a variety of reasons, the chief being the availability of plentiful coal at cheap costs.1.7. However, with increasing environmental problems with coal based projects, India will need to start depending on clean and eco-friendly energy sources in future one of which could be geothermal.2. History of Geothermal Energy2.1 Geothermal energy was used by ancient people for heating and bathing even today, hot springs are used worldwide for bathing, and many people believe hot mineral waters have natural healing powers.2.2 Using geothermal energy to produce electricity is a new industry. A group of Italians first used it in 1904. The Italians used the natural steam erupting from the earth to power a turbine generator.Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 2.3 The first successful American geothermal plant began operating in 1960 at The Geysers in northern California. There are now about 60 geothermal power plants in five western states, with many more in development. Most of these geothermal power plants are in California with the remainder in Nevada, Hawaii, Alaska, and Utah.3 Geothermal Energy Resources of India3.1 Geothermal energy, in the broad sense, is the heat in the earth and released by conduction at an average heat flux of 60 mW/m2. There are four major types of geothermal energy resources. 1) Hydrothermal 2) Geopressurised brines 3) .Hot dry rocks 4) . Magma3.2 All the geothermal provinces of India are located in areas with high heat flow and geothermal gradients. The heat flow and thermal gradient values vary from 75–468 mW/m2 and 59–234°C respectively. Additional exploration studies and reservoir modeling have been carried out between 1995 and 1998 to understand the reservoir characteristics.3.3 Thermal gas discharges from several thermal provinces recorded high helium concentration varying from 0.5–6.9%.High 4He content in the thermal gases is obliterating the presence of primordial helium.Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 3.4 Pilot power plants, commissioned at certain thermal discharge sites, proved the power generating capacity of these provinces. The estimated power generating capacity of the thermal discharges is about 10,600 MW.3.5 The available geophysical and geochemical data are sufficient to identify sites for undertaking deep drilling projects, and to commission binary power plants.4 The seven major geothermal provinces of India 1. Himalayas 2. Sohana 3. Cambay 4. Son- Narmada-Tapi rift zone (SONATA) 5. West coast 6. Godavari 7. Mahanadi.5 The Himalayas Province6 This is one of the most promising provinces in the coldest part of the country and contains about 100 thermal springs with surface temperatures as high as 90o C discharging > than 190 tones /h of thermal water.6.1 Post Tertiary granite intrusive are responsible for the high temperature gradient (> 100o C/km) and heat flow (> 468 mW/m2) recorded in the 500 m drill-hole in this province. Geothermal reservoir between depths 1 and 3 km was delineated from magneto-telluric recordings (Singh and Nabetani, 1995).6.2 The first and the last pilot binary 5 kW power plant using binary fluid was successfully operated by the Geological Survey of India at Manikaran which proved the power producing capability of this province. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 7 Cambay Province:7.1 Situated in a failed arm of a rift (Sheth and Chandrasekharam, 1997), this province forms a part of the Cambay basin with > 500 m of post Cretaceous sedimentary formation overlying the well known Deccan flood basalts. Besides deep seated faults, which brackets the basin, older granite intrusives ( ~ 955 Ma)7.2 Such as those at Tuwa and Miocene- Pliocene basic intrusives, contribute partly to the high thermal gradient (> 60o C) and heat flow value (>80 mW/m2) of this basin. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 8 West coast province8.1 This province is located within the world famous Deccan flood basalts of Cretaceous age. Attenuation and foundering of the continental crust prior to the outpouring of the large volume of lavas along the coast (Chandrasekharam and Parthasarathy, 1978) resulted in the development of several faults and graben structures (Chandrasekharam, 1985) which are channeling thermal waters.8.2 This province enjoys a thin lithosphere of 18 km thickness (Pande et.al., 1984) thereby rendering this province as one of the most promising sites for exploitation. The thermal discharges are saline with Cl content varying from 800 ppm to little over 1500 ppm ( Ramanathan, 1993)9 SONATA province:9.1 This province extending from Cambay in the west to Bakreswar in the east is an area with very high heat flow and geothermal gradient and encloses the well known Tattapani geothermal province spreading over an area of about 80,000 sqm/9.2 Nine thermal springs are discharging waters at 90o C. These waters, compared to those of west coast, are low in Cl content (60 - 70 ppm) and the chemical composition of the thermal discharge is controlled by water-rock interaction.9.3 Based on thermal gradient and experimental results, estimated reservoir temperatures are as high as 217o C at 3 km depth. (Chandrasekharam and Antu, 1995). In certain bore holes drilled by the Geological Survey of India, thermal discharge was not encountered but the recorded thermal gradient in these bore holes exceed 100o C/km (K. Muthuraman, G.S.I., personal communication). Such sites are best suited for experimenting HDR projects (Chandrasekhar am, 1996). Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 9.4 The pressure of the thermal discharge is 5 kg/cm2 and the estimated life of the reservoir is about 20 years (Pitale et.al., 1995). It is unfortunate that a power plant is yet to be commissioned at Tattapan.10 Bakreswar province10.1 Bakreswar-Tantloi thermal province falls in Bengal and Bihar districts and marks the junction between SONATA and Singbhum shear zone. High His gas is encountered in all the thermal discharges (water and gases) and it is proposed to install a pilot plant to recover Him from the thermal manifestation of this region. The Helium discharge is 4 l//h (Nagar et.al., 1996).11 Godavari province:11.1 Godavari valley in Andhra Pradesh is a northwest-southeast trending graben filled with Gondwana sedimentary formations. The lower Gondwana group of roks consist of sandstone, shale and clays and are exposed towards the southwestern part of the graben and hosts 13 thermal discharges with surface temperature varying from 50 to 60o C.11.2 This graben falls within zone II (100 - 180 mWm2) on the heat flow map of India and has a thermal gradient of 60o C/km (Ravi Shanker, 1988). Two thermal springs, Bugga and Manuguru, discharging 1000 l//m of water, were studied in detail. Talchir sandstone, which forms a unit in the lower Gondwana group, is the reservoir rock with an effective porosity of 35%.11.3 The storage capacity of the sandstone is 35 x 106 m3 which is expected to yield thermal discharge for about 75 years. Geochemical thermometers indicate reservoir temperatures in the range of 175 and 215o C. The reservoir is reported to be at a depth of 2.5 km. It has been estimated that 38 MW power can be generated from this province (Chandrasekharam and Jayaprakash, 1996). Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 12 Applications of Geothermal Energy • Power generation • Cooking • Space heating • Use in green house cultivation • Crop drying12.1 Electricity Generation: The thermal efficiency of geothermal electric plants is low, around 10-23%, because geothermal fluids do not reach the high temperatures of steam from boilers. The laws of thermodynamics limit the efficiency of heat engines in extracting useful energy.12.2 Exhaust heat is wasted, unless it can be used directly and locally, for example in greenhouses, timber mills, and district heating. System efficiency does not materially affect operational costs as it would for plants that use fuel, but it does affect return on the capital used to build the plant. In order to produce more energy than the pumps consume, electricity generation requires relatively hot fields and specialized heat cycles. Because geothermal power does not rely on variable sources of energy, unlike, for example, wind or solar, its capacity factor can be quite large – up to 96% has been demonstrated. The global average was 73% in 2005.12.3 Direct Applications: In the geothermal industry, low temperature means temperatures of 300 °F (149 °C) or less. Low-temperature geothermal resources are typically used in direct-use applications, such as district heating, greenhouses, fisheries, mineral recovery, and industrial process heating. However, some low-temperature resources can generate electricity using binary cycle electricity generating technology. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 13 Scenario of India 13.1 India has reasonably good potential for geothermal; the potential geothermal provinces can produce 10,600 MW of power. Though India has been one of the earliest countries to begin geothermal projects way back in the 1970s, but at present there are no operational geothermal plants in India. There is also no installed geothermal electricity generating capacity as of now and only direct uses have been detailed. 13.2 Thermax capital goods manufacturer based in Pune, has reportedly entered an agreement with Icelandic firm Reykjavík Geothermal. Thermax is planning to set up a 3 MW pilot project in Puga Valley, Ladakh (Jammu & Kashmir). Reykjavík Geothermal will assist Thermax in exploration and drilling of the site.14 Potential Sites in India Puga Valley (J&K) Tatapani (Chhattisgarh) Godavari Basin Manikaran (Himachal Pradesh) Bakreshwar (West Bengal Tuwa (Gujarat) Unai (Maharashtra) Jalgaon (Maharashtra)15 Potential Geothermal regions/sources in India Province Surface Reservoir Heat Flow Deg. Thermal gradient Temp Temp Deg. C C Deg. C Himalaya >90 260 468 100 Cambay 40-90 150-175 80-93 70 West 46-72 102-137 75-129 47-59 Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • coast Sonata 60 – 95 105-217 120-290 60-90 Godavari 50-60 175-215 93-104 60 SL.NO Geothermal Estimated(min.)reservoir Status Field Temp(Approx) 1 Pugageothrmal 240oC at 2000m From geochemical field and deep geophysical studies (MT) o o 2 TattapSarguja 120 C - 150 C at 500 Magnetotelluric (Chhattisgarh) meter and 200 Cat 2000 survey done by m NGRI o 3 TapobanChamoli 100 C at 430 meter Magnetotelluric (Uttarakhand) survey done by NGRI o 4 CambayGarben 160 C at 1900 meter Steam discharge (Gujrat) (From Oil exploration was estimated borehole) 3000 cu meter/day withhightemperatu re gradient. 5 BadrinathChamol 150oC estimated Magneto-telluric i (Uttarakhand) study was done by NGRI. Deep drilling required to ascertain geothermal field 6 SurajkundHazarib 110oC Magneto-telluricDisclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • agh (Jharkhand) study was done by NGRI. Heat rate 128.6 mW/m2 7 ManikaranKullu 100oC Magneto-telluric (H P) study was done byNGRI. Heat flow rate 130 mW/m2 8 Kasolkullu(HP) 110oC Magneto-telluric study was done by NGRI16 Geothermal Companies who have reported entry into the field recently. • LNJ Bhilwara • Tata Power • NTPC Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 17 Power Generation Technology17.1 Method of Heat Extraction:18 Process of Power Generations18.1 High Temperature Resources: High temperature geothermal reservoirs containing water and/or steam can provide steam to directly drive steam turbines and electrical generation plant. More recently developed binary power plant technologies enables more of the heat from the resource to be utilised for power generation. A combination of conventional flash and binary cycle technology is becoming increasingly popular.18.2 High temperature resources commonly produce either steam, or a mixture of steam and water from the production wells. The steam and water is separated in a pressure vessel (Separator), with the steam piped to the power station where it drives one or more steam turbines to produce electric power. The separated geothermal water (brine) is either utilised in a binary cycle type plant to produce more power, or is disposed of back into the reservoir down deep (injection) wells. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 18.3 The following is a brief description of each of the technologies most commonly used to utilise high temperature resources for power generation.18.4 Dry steam Power Plant Dry steam power plants use very hot (>455 °F, or >235 °C) steam and little water from the geothermal reservoir. The steam goes directly through a pipe to a turbine to spin a generator that produces electricity. This type of geothermal power plant is the oldest, first being used at Lardarello, Italy, in 1904.19.5 Flash Steam Power Plant: This is the most common type of geothermal power plant The steam, once it has been separated from the water, is piped to the powerhouse where it is used to drive the steam turbine. The steam is condensed after leaving the turbine, creating a partial vacuum and thereby maximizing the power generated by the turbine-generator. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 18.5 The steam is usually condensed either in a direct contact condenser, or a heat exchanger type condenser. In a direct contact condenser the cooling water from the cooling tower is sprayed onto and mixes with the steam. The condensed steam then forms part of the cooling water circuit, and a substantial portion is subsequently evaporated and is dispersed into the atmosphere through the cooling tower. Excess cooling water called blow down is often disposed of in shallow injection wells. As an alternative to direct contact condensers shell and tube type condensers are sometimes used, as is shown in the schematic below.18.6 In this type of plant, the condensed steam does not come into contact with the cooling water, and is disposed of in injection wells.Typically; flash condensing geothermal power plants vary in size from 5 MW to over 100 MW. Depending on the steam characteristics, gas content, pressures, and power plant design, between 6000 kg and 9000 kg of steam each hour is required to produce each MW of electrical power.Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 18.7 Small power plants (less than 10 MW) are often called well head units as they only require the steam of one well and are located adjacent to the well on the drilling pad in order to reduce pipeline costs. Often such well head units do not have a condenser, and are called backpressure units. They are very cheap and simple to install, but are inefficient (typically 10-20 tonne per hour of steam for every MW of electricity) and can have higher environmental impacts.18.8 Binary Cycle Power Plants: In reservoirs where temperatures are typically less than 220o C. but greater than 100o C binary cycle plants are often utilised. The reservoir fluid (either steam or water or both) is passed through a heat exchanger which heats a secondary working fluid (organic) which has a boiling point lower than 100o C. This is typically an organic fluid such as Isopentane, which is vaporised and is used to drive the turbine. The organic fluid is then condensed in a similar manner to the steam in the flash power plant described above, except that a shell and tube type condenser rather than direct contact is used.18.9 The organic fluid is then condensed in a similar manner to the steam in the flash power plant described above, except that a shell and tube type condenser rather than direct contact is used. The fluid in a binary plant is recycled back to the heat exchanger and forms a closed loop. The cooled reservoir fluid is again re-injected back into the reservoir. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 19 Technological Issues with Geothermal Developments19.1 Whether geothermal energy is utilized for power production or for direct use applications, there are issues in geothermal utilization that often have technical implications.19.2 Geothermal fluids often contain significant quantities of gases such as hydrogen sulphide as well as dissolved chemicals and can sometimes be acidic. Because of this, corrosion, erosion and chemical deposition may be issues, which require attention at the design stage and during operation of the geothermal project. Well casings and pipelines can suffer corrosion and or scale deposition, and turbines, especially blades can suffer damage leading to higher maintenance costs and reduced power output. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 19.3 However, provided careful consideration of such potential problems is made at the design stage, there are a number of technological solutions available. Such potential problems can be normally overcome by a combination of utilising corrosion resistant materials, careful control of brine temperatures, the use of steam scrubbers and occasionally using corrosion inhibitors.19.4 Provided such readily available solutions are employed, geothermal projects generally have a very good history of operational reliability. Geothermal power plants for example, can boast of high capacity factors (typically 85-95%).20 An Alternate Source of Geothermal Energy20.1 Geothermal -An alternate source of energy" focuses on the present status of exploration & utilization of these energy resources in India and world over. The exploration and exploitation of geothermal resources got a boost following the 1973 oil crisis world over. R & D activities were directed towards exploration & exploitation of various types of geothermal resources such as hydrothermal, geopressurised, hot dry rock, magma.20.2 Scope and Objective of the Study • Relationship and the importance of the topic to the broad area to which it belongs • The current status of the technology in the world and in India, Market sizes and their potentialities. • Assessment of technology, resource parameters such as energy, raw material, infrastructure etc., to arrive at preferred technology options available in the country • Short term and long term economic aspects of preferred options along with their feasibilities • For implementation of preferred technology options - identifying critical inputs such as occurrence and availability of raw material, capital goods and human resources required and their, expected benefits etc. • Technology development-identifying the requirements of inputs and expected benefits. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • • Action plan for implementation of recommendations along with identification of • List of available technology for Indian Industry • The agencies/group/individuals for implementation. • Expected impact of recommendations; if implemented. 21 Methodology 21.1 The Techno-Market Survey was conducted through extensive literature survey on the subject relating to the exploration, electric and non-electric utilization of geothermal resources in India and the world over and the constraints in the system approach for its exploration & exploitation. The various possibilities of its utilisation have been explored. • Present technological statues of exploration & utilization scenario in India as well as in world has been synthesised and evaluated in the light of ongoing R & D work towards optimum utilisation of the resources in the India21.2 Limitations: • The study is based on published literature, mail survey, a limited number of personal visits and interviews. • The details of technical and economic parameters are limited to the extent of information that could be gathered during the survey. • The information of world scenario and evaluation thereof is based upon the published literature and the information collected through survey & literature requests. • The information on commercial aspects of the technologies was provided only by a few.22 Input sources required the to Development of Geothermal projects22.1 To move forward in investigating the potential of geothermal power projects, studies are required to quantify and reduce project risks. EcoUrja provide consultancy services in this direction.22.2 The consultancy will involve the review and updating of any previous studies based on new data and techniques. This will include updated concept designs, costing, and studies into potential customers. These will form inputs to the pre-feasibility study to determine if the project is suitable for further commercial development. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 23.1 Scope of the Study • Studies into the development of geothermal resources in the Province will require input from several engineering and related disciplines. Studies will be based on past reports and other available data, including fieldwork.23.2 The consultant will carry out the following tasks: 1. Geological Studies • Research and collect any geological information from the area. • Review the assessment of the geological conditions for the main works and the interpretation of results for the latest trends in harnessing geothermal resources. • Identify need for any further site investigations to be carried out for next stage of project implementation. • Preliminary assessment of availability, quantity and properties of potential construction materials (site visit and make estimation of deposit). . • Identify the best locations for the geothermal prospects. 2. Topographical Studies • Review of topographical data and confirm additional topographical data requirements for next stage of project implementation • Digitalize contour map for the project site, potential sites, transmission line and access road. • Establish a general assessment and identification of suitable locations employing best techniques for seismic and test-drilling activities based on recent available geological information. 3. Environmental Impact Studies • Conduct a preliminary assessment of the potential environmental impact from construction of the geothermal power station and associated works, and provide advice as to whether further studies and activities may be required for full EIA. 4. Social and Development Analysis Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • • Conduct a preliminary assessment of the potential impact of the project on the surrounding region and general from a social perspective, including resettlement, and state any development outcomes that will be achieved by the construction of the proposed geothermal power station. Provide advice as to what further studies and activities may be required. 5. Civil Design Investigation • Review current project layout arrangement. • As appropriate, explore alternative project arrangement and confirm best option for development using digitalized contour maps. • Prepare concept design for the power station and associated infrastructure. • Prepare a General Arrangement drawing showing project features in sufficient detail to enable preliminary cost estimates to be updated. • Construction schedule based on client requirements. 6. Electrical and Mechanical Design Investigations • Determine station arrangements. • Determine transmission systems requirements. • Concept designs for the power station and transmission systems allowing for the transmission of electricity. 7. Cost Estimate and Financial Analysis • Provide cost estimates based on the concept designs and delivery approach. • Carry out financial analysis based on the cost estimates and current financial parameter. • Take into account potential earnings through the Clean Development Mechanism. 8. Project Implementation Schedule • Provide a tentative project implementation program identifying major project activities, cost and duration based on current practices. 9. Risk Assessment • Undertake a project implementation risk assessment and implications to the project in light of available information.24 Keys Inputs Required for Geothermal power projects Development. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • • What are the policies, technological, and economic market drivers for geothermal power • Which regions are poised for the greatest growth in geothermal capacity worldwide • What is the market outlook for geothermal conversion technologies • What impact will EGS and other breakthrough technologies have on geothermal capacity worldwide • What are the primary cost considerations for geothermal project development25 Cost, Price and Challenge25.1 Unlike traditional power plants that run on fuel that must be purchased over the life of the plant, geothermal power plants use a renewable resource that is not susceptible to price fluctuations.25.2 New geothermal plants currently are generating electricity from 0.05$ to 0.08$ per kilowatt hour (kWh) Once the capital costs have been recovered price of power can decrease below 0.05$ per kWh.25.3 The price of geothermal is within range of other electricity choices available today when the costs of the lifetime of the plant are considered.25.4 Most of the costs related to geothermal power plants are related to resource exploration and plant construction. Like oil and gas exploration, it is expensive and because only one in five wells yield a reservoir suitable for development.25.5 Geothermal developers must prove that they have reliable resource before they can secure millions of dollar required to develop geothermal resources.26 Drilling • Although the cost of generating geothermal has decreased by 25 percent during the last two decades, exploration and drilling remain expensive and risky. • Drilling Costs alone account for as much as one-third to one-half to the total cost of a geothermal project. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • • Locating the best resources can be difficult and developers may drill many dry wells before they discover a viable resource. Because rocks in geothermal areas are usually extremely hard and hot, developers must frequently replace drilling equipment. • Individual productive geothermal wells generally yield between 2MW and 5MW of electricity each may cost from $1 million to $5 million to drill. • A few highly productive wells are capable of producing 25 MW or more of electricity.27 Challenges • There are some challenges to address when financing geothermal power projects, including the high risk of development and permitting issues. These challenges can impact both developers and investors and, if not addressed, can sideline a geothermal power project.28 High-Risk Development 1) In the exploration and drilling stage, geothermal developers must target investors who are comfortable with the high levels of risk and long development time horizons related to geothermal power projects. 2) The high risk and significant investment required to find and prove the geothermal resource is unique to geothermal power projects and substantially changes a projects level of certainty as well as the required development time. 3) Geothermal power projects also compete for capital (and drilling rigs) with mineral, coal, oil, and gas exploration projects. 4) The higher overall risk of geothermal power plants has led to limited utility investment in geothermal power project development. However, some municipal utilities, in contrast to larger utilities, are considering geothermal investments. 5) Four main challenges persist for developers to encourage utilities to move forward with geothermal project: Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 1) Familiarity—utilities and regulators may be unfamiliar with the technology 2) Investment metrics—utilities approved rates of return may not be sufficient to accommodate the projects initial high risk 3) Regulators—some regulators may hesitate to commit ratepayer funds to potentially risky development without a mechanism for avoiding risk 4) Competition—by the time utilities rates of return are sufficient to warrant investment (i.e., construction), other entities may offer financing to developers at more attractive rates.29 Transmission 1) Geothermal power plants must be located near specific areas near a reservoir because it is not practical to transport steam or hot water over distances greater than two miles. 2) Since many of the best geothermal resources are located in rural areas, developers may be limited by their ability to supply electricity to the grid. 3) New power lines are expensive to construct and difficult to site. Many existing transmission lines are operating near capacity and may not be able to transmit electricity without significant upgrades. 4) Consequently, any significant increase in the number of geothermal power plants will be limited by those plants ability to connect, upgrade or build new lines to access to the power grid and whether the grid is able to deliver additional power to the market. 5)30 Advantages of Geothermal Energy 1) Significant Cost Saving : Geothermal energy generally involves low running costs since it saves 80% costs over fossil fuels and no fuel is used to generate the power. 2) Reduce on Fossil Fuels: Dependence on fossil fuels decreases with the increase in the use of geothermal energy. With the sky-rocketing prices of oil, many countries are pushing companies to adopt these clean sources of energy. 3) Environmental Benefits: Being the renewable source of energy, geothermal energy has helped in reducing global warming and pollution. Moreover, Geothermal systems does not create any pollution as it releases some gases from deep within the earth which are not very harmful to the environment. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • 4) Direct Use: Since ancient times, people having been using this source of energy for taking bath, heating homes, preparing food and today this is also used for direct heating of homes and offices. 5) Job Creation and Economic Benefits: Geothermal energy on the other hand has created many jobs for the local people.31 Disadvantages of Geothermal Energy: 1) Not Widespread Source of Energy: Since, this type of energy is not widely used therefore the unavailability of equipment, staff, infrastructure, training pose hindrance to the installation of geothermal plants across the globe. 2) High Installation Costs: To get geothermal energy, requires installation of power plants, to get steam from deep within the earth and this require huge one time investment and require hiring a certified installer and skilled staff needs to be recruited and relocated to plant location. Moreover, electricity towers, stations need to set up to move the power from geothermal plant to consumer. 3) Can Run Out Of Steam : Geothermal sites can run out of steam over a period of time due to drop in temperature or if too much water is injected to cool the rocks and this may result huge loss for the companies which have invested heavily in these plants. 4) Suited To Particular Region: It is only suitable for regions where temperatures below the earth are quite low and can produce steam over a long period of time. For this great research is required which is done by the companies before setting up the plant. 5) May Release Harmful Gases : Geothermal sites may contain some poisonous gases and they can escape deep within the earth, through the holes.32 What are the opportunities to develop geothermal energy resources in India 1) Of late, IPPs involved in non-conventional energy sources, are showing keen interest in geothermal energy resources, thanks to the awareness brought by those organizations working in this field such as the IITs (Chandrasekharam, 1995) and the GSI. 2) One-time investment and low maintenance cost, low area requirement, and incentives given by the Govt. for non-conventional energy sector is attracting many IPPs in India. Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com
  • Even IPPs who are involved in solar Photovoltaic and solar thermal power business are frantically exploring partners to finance geothermal projects. 3) M/s EcoUrja Solar who are involved in solar Photovoltaic and Solar Thermal projects, are keen to develop geothermal projects in Gujarat and expand their activities to other states as well. 4) Since all the thermal provinces are located in rural areas with excellent communication system, power projects as well geothermal based industries are going to reduce congestion in Urban areas and improve socio-economic status of the rural public.Disclaimer: This is not a prospectus. This is an initial information document and the information presented here is subject to changes. Investment decision should not be based on this document alone. Delhi London Madrid www.EcoUrja.com