B1 - Unlocking Geothermal Development in Latin America and the Caribbean
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The document discusses geothermal power generation in Latin America and the Caribbean. It notes that most electricity generation in the Caribbean and parts of Central America depends on imported fossil fuels. Geothermal potential has been identified as over 8,800 MW in the region, with the largest potential in Costa Rica, Mexico, Nicaragua, Ecuador, and Peru. The Inter-American Development Bank has invested $1.6 billion in geothermal and renewable energy projects in Latin America and the Caribbean. It also provides training programs to build geothermal capacity. The Sustainable Energy Facility for the Eastern Caribbean will provide $191 million in grants and loans to support geothermal exploration and plant development across several Caribbean countries.
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B1 - Unlocking Geothermal Development in Latin America and the Caribbean
- 1. 4th Iceland Geothermal Conference Unlocking Geothermal Development in Latin America and the Caribbean 24-26 April 2018, Reykjavik Iceland
- 2. Power Generation situation in LAC 17% 25% 46% 5% 2% 0%4% 0% 1% Share Electricity Generation in LAC (2013)* Petro Gas Hidro ERNC Nuclear Others Primary solid biofuels Biogases 42,02% 1,24% 0,09% 56,66% Share Generation: Non-Conventional RE (ERNC) Geothermal Solar photovoltaics Solar thermal Wind Wind *Source: IEA and IDB analysis (2013) Geothermal
- 3. Renewable Power Generation situation in LAC *Source: REN21 Renewable Energy Policy Network for the 21st Century
- 4. Power Generation in Caribbean and Central America Electricity generation in most countries in the Caribbean and some in Central America still depend on imported fuels (diesel and fuel oil) and Climate Change challenges make it necessary to find alternatives to hydro as main baseload renewable source. Source: IEA and IDB analysis (2013) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% DominicanRepublic ElSalvador Guatemala Haiti Honduras Nicaragua Panama Share of Electricity Generation in CA and Haiti % of total Generation* Petro Gas Hidro ERNC Geothermal Solar photovoltaics Wind Primary solid biofuels
- 5. Geothermal Installed Capacity in LAC Country Field Installed (MW) Mexico 1,018 Cerro Prieto 720 Los Humeros 94 Los Azufres 194 Las tres Virgenes 10 Costa Rica 180 Miravalles 165 Boca Pozo 15 El Salvador 204 Ahuachapan 95 Berlin 109 Guatemala 52 Zunil I 28 Amatitlan 24 Nicaragua 159 Momotombo 77 San Jacinto 82 Guadaloupe 15 Bouillante 15 Mexico and Central America 1,613 MW Caribbean 15 MW
- 6. Geothermal Potential Capacity in LAC Country Potential MW Argentina 167 Bolivia 250 Chile 465 Colombia 380 Costa Rica 2,070 Dominica 100 Ecuador 570 Brazil 343 El Salvador 457 Guadaloupe 45 Guatemala 455 Honduras 190 Mexico 1,901 Montserrat 5 Nevis 10 Nicaragua 783 Panama 7 Peru 554 St Lucia 30 St Vincent 10 Total LAC 8,791 Identified Potential Geothermal generation LAC Costa Rica 23,55% Mexico 21,62% Nicaragua 8,90% Ecuador 6,48% Peru 6,30% El Salvador 5,20% Guatemala 5,18% Chile 4,83% Colombia 4,32% Brazil 3,90% Bolivia 2,84% Honduras 2,16% Argentina 1,90% Dominica 1,14% Guadaloupe 0,51% More than 8.8 GW of Geothermal potential identified This potential can be up to 70GW according to Geothermal Energy Association
- 7. Geothermal Power and the IDB
- 8. Training: Capacity building in Geothermal in LAC • Training for Public & Private employees • Utilizing local expertize in El Salvador - Collaboration with Nordic Developing Fund (NDF) - University of El Salvador - La Geo US$ 2 million Grant 137 experts 13 countries 5 geothermal training courses
- 9. Geothermal Power at the IDB: A Partnership Vision US$ 1.6 Billion invested in LAC CORE GDFLA SEF GEF SEF Mexico, Colombia, Nicaragua, Chile Studies for Colombia, Eastern Caribbean E-learning El Salvador Costa Rica, Bolivia, Nicaragua, SEF4LAC Eastern Caribbean, SEF4LAC LAC, GDFLA Expanded
- 10. SUSTAINABLE ENERGY FACILITY FOR THE EASTERN CARIBBEAN
- 11. Stage1a:Pre- Investment (Studies) Stage1b:Pre- Investment (Slim-holedrilling) Stage2: Exploration (Fullscale drillings) Stage3:Field Development (Production/ re-injectionwells) Stage3:Field Development (Plant) Commissioning andstart-up Operationand maintenance CRG + Concessi onal loans Concessional loans Commercial loansGrants SEF – Geothermal Risk Profile and status Funding Project GRE SL SVG DOM SKN *CRG = Contingent Recovery Grants
- 12. Estimated total investment required for GE in the ECC by stage of project development Country Stage 1a: Pre-invest- ment Stage 1b: Pre- investment Stage 2: Exploration Stage 3: Field Development T&D and Access Roads Total (Studies) (Slim hole drillings) (Full scale drillings) (Productio n/re- injection wells) (Plant) SL (done) 6 14 42 90 16.3 168.3 SVG (done) (skip) 14 21 45 16.3 96.3 GRE (done) 6 14 21 45 16.3 102.3 SKN (done) (done) 14 21 45 12.1 92.1 DOM (done) (done) (done) 7 45 15.0 67.0 Total 0 12 56 112 270 80.2 526.0 (in US$ Million)
- 13. Sustainable Energy Facility (SEF) for the Eastern Caribbean CTF (Five ECC) CDB Geothermal SPV Local utility Private developer/ investorGovernment GEF (A&B, GRE, SVG) Final users Electricity tariff PPA contract Republic of Italy (Five ECC) IDB (All ECC) Loans Grants CRG Private Equity Government Equity Other Commercial Debt GCF (Five ECC) Grants/ CRG/ Loans Grants TA Grants Investment grants PPP contract/ Concession Shareholder Agreement SEF Program (Administered by IDB) SEF-ExpandedSEF-2015 Loans CRG Grants Leveraged/Parallel Financing EU-CIF DFID IRENA/Abu Dhabi Fund (SVG) EU-CIF Grants Grants Loans Leveraged/Parallel Financing
- 14. US$ 191 million in: grants ( for studies), contingent recovery grants (for exploration) and concessional loans (for plants development and transmission lines) through the Sustainable Energy Facility (SEF) for the Eastern Caribbean with IDB, CTF, GCF and GEF funding, executed by the Caribbean Development Bank Posible undersea Transmission line Possible Geothermal plants Geothermal Power Eastern Caribbean
- 15. MEXICO
- 16. FINANCING SCHEMES FLOWCHART Plant construction and operation Drilling (well 1) Drilling (well 3) Succeeds NAFIN / BID / CTF Drilling (well 2) Drilling (well 4) Drilling (well 5) Drilling (well n) Succeeds Repays loan Succeeds Mexican Government … Original Program
- 17. Levelized Cost of Energy for Geothermal + Levelized cost for Power generation (2018) 65.57 US$/MWh - Clean Energy Certification (2018) 10.00 US$/MWh = Net Cost of power (2018) 55.57 US$/MWh Variables determinantes Amortizacion de deuda Intereses de deuda Deuda Exploración Tasa interes CTF % anual 0.75% Margen NAFIN sobre CTF % anual 1.50% Periodo de amortizacion años 17 Periodo de gracia años 5 Comisión de apertura % 0.0% Deuda Explotación Tasa BID % anual 3.00% Spread NAFIN % anual 3.00% Tasa de interes NAFIN para explotación % anual 6.00% Periodo de amortizacion años 20 Periodo de gracia años 0 Comisión de apertura % 0.0% OPEX Costos variables de OyM usd 2018/MWh 20.00 CAPEX Costo perforación unitario US$ MM/pozo 5.0 CAPEX de exploración (7 pozos) US$ MM 35.0 CAPEX de Planta y Campo US$ MM 52.0 OPEX 30% Otros Gastos 6% Amortización de deuda 37% Intereses de deuda 23% Impuestos a la utilidad 4% Integración Costo Nivelado de Generación
- 18. Levelized Cost of Power Generation using Geothermal assuming PPPs and economies of scale + Levelized Cost of power usig Geothermal (2018) 57.01 US$/MWh - CELs (2018) 10.00 US$/MWh = Net Cost of Power (2018) 47.01 US$/MWh Variables determinantes Condición optimizado con APPs y escala en perforación OPEX Costos variables de OyM usd 2018/MWh 20.00 15.00 CAPEX Costo perforación unitario US$ MM/pozo 5.0 4.00 CAPEX de exploración (7 pozos) US$ MM 35.0 CAPEX de Planta y Campo US$ MM 52.0 49.00 Reference Price: Combined Cycle Plants 45-55 US$/MWh (NG cost US$3/MMBTU .
- 19. MODIFIED GEOTHERMAL FINANCING AND RISK TRANSFER FACILITY
- 22. Challenges of Geothermal Energy • The inability to determine the geological resource ex-ante (without drilling) • High initial exploration costs • Long maturity periods • Lack of adequate regulatory frameworks • Environmental and social permits • Increased perception of risk among developers, governments and financial institutions Site costs 4% Exploration 2% Production wells 30% injection system 11% power plant 38% connection 10% Admin 5% Share of cost by MW installed in Geothermal Power Plant* *Source: R Henenberger
- 23. Sustainable Energy Alternatives for the Eastern Caribbean Countries (ECC)
- 24. The Geothermal Electricity generation technology • Minimum carbon footprint: 122kg CO2/MWh (1/8 compared with coal) • Small land footprint compared with other generation sources. • Baseload generation: the power output can be accurately predicted • Simple logistics: no mining or transportation of material associated after installation. • Long term available resource • 90% capacity factor A clean and reliable source of energy Source: IMF