The document provides an overview of global geothermal energy development by Fernando S. Peñarroyo, Director of the International Geothermal Association. It discusses the state of the geothermal marketplace, leading countries in electricity and direct use, and innovative technologies. Key points include: the IGA promotes geothermal energy development and has over 5,200 members; the top 15 electricity producing countries are led by the US, Philippines, and Indonesia; and direct use is led by China, the US, and Sweden mainly for heating applications. The document also notes impacts of the 2011 Japan earthquake on nuclear power and increased focus on renewables like geothermal.

1. Overview
of
the
Global
Geothermal
Energy
Development
Marketplace
Fernando
S.
Peñarroyo
Director
InternaAonal
Geothermal
AssociaAon
7th
Asia
Clean
Energy
Forum
08
June
2012,
Asian
Development
Bank
Manila

2. The
InternaAonal
Geothermal
AssociaAon
(IGA)
promotes
the
development,
research
and
use
of
geothermal
energy.
The
associa=on
was
founded
in
1988
and
has
more
than
5,200
members
in
65
countries.
The
IGA
operates
as
a
non-­‐poli=cal,
non-­‐profit,
non-­‐governmental
organiza=on
in
a
special
consulta=ve
status
to
the
Economic
and
Social
Council
of
the
United
Na=ons
and
to
the
EU.
IGA
is
now
affiliated
to
the
Interna=onal
Renewable
Energy
Alliance
(REN
Alliance).

3. Presenta,on
Outline
l State
of
the
marketplace
l Technology
l Financing
schemes
l Risk
mi=ga=on
l Challenges

4. World Geothermal Electricity (2005)
Bertani (2005) WGC2005

5. 2010 Capacity and Use
Installed Energy
Power Use Capacity
Use (MW) (GWh/yr) Factor
Electric 10,715 67,246 0.72
Direct-use 48,483 117,778 0.28
Lund and Bertani, 2010, WGC and GRC
Geothermal
energy
kept
its
promises!

6. May
29,
2012
6
1950
1960
1970
1980
1990
2000
2010
Bertani, 2010, WGC
18,500 MWe in 2015
World
Geothermal
Electricity
(2010)

7. 2010 Worldwide Annual Use (TJ/yr)
May 29, 2012
Geothermal heat
pumps 49.0%
Others 0.2%
Space Heating
14.4%
Greenhouse
Heating 5.3%
Aquaculture pond
heating 2.6%
Agricultural drying
0.4%
Industrial uses
2.7%
Cooling / snow
melting 0.5%
Bathing and
swimming 24.9%
Lund and Bertani, 2010, WGC and GRC

8. 2010 Worldwide Installed Capacity (MWt)
May 29, 2012
8
Industrial uses
1.1%
Cooling / snow
melting
0.7%
Bathing and
swimming
13.2%
Geothermal heat
pumps
69.7%
Agricultural drying
0.3%
Aquaculture pond
heating
1.3%
Greenhouse
Heating
3.1%
Space Heating
10.7%
Others
0.1%
Lund and Bertani, 2010, WGC and GRC

9. Leading
Countries
in
Direct
Use
>1000
MWt
Country GWh/yr MWt Main Use
China 20,932 8,898 bathing/district heating
USA 15,710 12,611 GHP
Sweden 12,585 4,460 GHP
Turkey 10,247 2,084 district heating
Japan 7,139 2,100 bathing (onsens)
Iceland 6,768 1,826 district heating
France 3,592 1,345 district heating
Germany 3,546 2,485 bathing/district heating
Norway 3,000 1,000 GHP
Netherlands 2,972 1,410 GHP
Canada 2,465 1,126 GHP
Switzerland 2,143 1,061 GHP

10.
IEA’s
Top
15
geothermal
energy
producing
countries,
electricity
and
heat
in
2009

11. Great
East
Japan
Earthquake
• Earthquake
and
tsunami
on
11
March
2012
• Fukushima
I
Nuclear
Plant
and
other
nuclear
and
thermal
plants
were
severely
damaged
• No
serious
effects
on
geothermal
plants
in
Tohoku
region
11
Photo:
TEPCO

12. Statement
by
Former
PM
Kan
at
the
G8
Summit
in
Deauville
on
26
May
2011
• Japan
will
now
review
the
energy
basic
plan.
• We
must
nurture
the
two
new
pillars
of
renewable
energy
and
energy-­‐efficiency,
in
addi=on
to
the
two
pillars
to
date
of
nuclear
power
and
fossil
fuels.
• We
will
engage
in
dras=c
technological
innova=on
in
order
to
increase
the
share
of
renewable
energy
in
total
electric
power
supply
to
at
least
go
beyond
20
percent
by
the
earliest
possible
in
the
2020s.
• We
aim
to
introduce
large
scale
offshore
wind
turbines,
next
generaAon
biomass
fuels
from
algae
etc.,
biomass
energy,
and
geothermal
energy
by
mobilizing
Japanese
technology.
-­‐
Jiro
Hiratsuka,
Climate
Change
Policy
Div.,
Ministry
of
the
Environment,
Japan

13. Closing the nuclear power plants in
Germany
• Security tests
• Ethic Commission
• June 30th, decision
of the parliament to
close all nuclear
power plants
forever until 2022
-­‐
Prof.
Dr.
Horst
Rueter
• March 11th, 2011 Earthquake, tsunami and nuclear accident in
Fukushima
• March 15th, Moratorium, closing of the 10 oldest plants (Merkel)
• Unterweser, Brunsbüttel, Krümmel, Biblis A und B, Philippsburg 1, Isar 1
sowie Neckarwestheim 1.

14. Iceland’s
Primary
Energy
Consump,on
1940-­‐2009
From an under-developed to a highly industrial country in few decades, Dr.
Bjarni
Pálsson

15. TECHNOLOGY

16. Innova,ve
explora,on
techniques
• Magnetotellurics
• Microseismic
interpreta=on
• 3D
modelling
• High
temperature
logging
techniques
• Infra-­‐red
for
surface
monitoring
• Geochemical
modelling
-­‐
Dr.
Colin
Harvey,
GNS
Science,
Past
President
New
Zealand
Geothermal
Associa=on

17. May
29,
2012
17
Enhanced
Geothermal
Systems
EGS
Source: http://hotrock.anu.edu.au
Most
heat
is
contained
in
the
rock,
but:
if
rock
is
impermeable
how
do
you
circulate
water?
how
do
you
get
injector
and
producer
to
communicate?
è
fracturing
Some=mes
known
as
“Hot,
Dry
Rock”
In
Australia,
HFR
is
not
considered
as
a
risky
technology
…
the
appropriate
applica=on
of
HFR
techniques
is
regarded
as
the
best
geological
risk
mi=ga=on

18. Direct
Use
Technology
Developments
• Space
hea=ng
and
cooling
with
Geothermal
Heat
Pumps
(GHPs)
• “Geostructures”,
e.g.
Energy
Piles
•
GHPs
for
large
building
complexes
-­‐
Ladislaus
Rybach,
Ins;tute
of
Geophysics
ETH
Zurich,
Switzerland

19. Process
Heat
Innova,on
in
New
Zealand
-­‐
Dr.
Colin
Harvey,
GNS
Science
Largest
industrial
direct
geothermal
heat
use
in
the
World
(~200
MWth
;
5300
TJ/yr)
Norske
Skog
Paper
Mill
Two
World
class
pulp
mills
using
raw
geothermal
steam
for
drying
World
class
large
scale
greenhouses
and
for
milk
product
drying

20. Globally
installed
geothermal
heat
pump
capacity
Data
from
Lund
et
al.
(2010)
Growth rate: 20 % per year

21. Terminal
E,
Zurich
airport
• 85,200
m2
energy
supply
area
• 2120
MWh/a
hea=ng,
1240
MWh/a
cooling
load
• 310
energy
piles
à
30
m
-­‐
Ladislaus
Rybach,
Ins,tute
of
Geophysics
ETH
Zurich,
Switzerland

22. • Development
complex
Suurstoffi
at
Rotkreuz
near
Lucerne,
Switzerland
• 1st
development
stage
230
flats
+
11,000
m2
• Hea=ng
and
DWW
1.8
GWh,
cooling
1.0
GWh
-­‐
Ladislaus
Rybach,
Ins,tute
of
Geophysics
ETH
Zurich,
Switzerland
Source: Wagner/Geowatt AG (2011)

23. Development
site
Suurstoffi
at
Rotkreuz
near
Lucerne,
Switzerland
Status
in
September
2011
-­‐
Ladislaus
Rybach,
Ins,tute
of
Geophysics
ETH
Zurich,
Switzerland

24. Geothermal
stores
at
Science
City,
ETH
Zurich
(now
in
construc,on)
-­‐
Ladislaus
Rybach,
Ins,tute
of
Geophysics
ETH
Zurich,
Switzerland
Total
4
mio
m3,
>700
BHEs
à
200
m,
Total
cost
~
40
MCHF

25. FINANCING

26. The
Challenge:
Accessing
Capital
• Geothermal
developers
who
wish
to
access
capital
must
meet
several
investor
requirements:
-­‐
Strong
geothermal
resource
prospects
-­‐
Understanding
the
developer’s
“game
plan”
to
gain
comfort
with
risks
-­‐
Investors
demand
experience,
which
is
rare
in
this
nascent
industry

27. Selec,on
of
instruments
depend
on
project
structure
and
financing
needs
• The
long-­‐term
project
financing
and
risk
guarantee
are
cri=cal
for
scaling-­‐up
clean
energy
• The
boundaries
between
private
and
public
financing
of
clean
energy
are
less
clear
cut
than
in
conven=onal
energy
projects
• Carbon
finance
instruments
(and
similar
“green
financing”
instruments)
complement
both
public
and
private
financing
• Blending
of
financial
instruments
will
be
beneficial
in
balancing
economic
viability
and
financial
viability
World Bank Group Energy

28. RISK MITIGATION

29. Insurance
-­‐
geothermal
project
phases:
Explora=on
phase:
• Insurance
(on
site):
building
and
installa=on
insurance
(operator)
• Insurance
(downhole):
-­‐
drilling,
opera=onal,
technical
insurance
for
drilling
contractor
-­‐
explora=on
risk
insurance
(operator)
-­‐
produc=vity
guarantee
insurance
(operator)
Opera=ng
phase:
• Insurance
(on
site)
-­‐
“all
risk
insurance”
includes:
-­‐
property
insurance,
catastrophic
insurance
(operator)
-­‐
opera=onal
and
environmental
liability
insurance
(operator)
-­‐
infrastructure
(e.g.
turbines)
insurance
(operator)
-­‐
business
interrup=on
insurance
(operator)
-­‐
Michael
Schneider,
KONSENS
KG,
Germany

30. Insurance
and
risk
coverages
–
different
approaches:
• Geological
risk
insurance
system
(France)
• Risk
guarantee
system
(Switzerland,
Germany)
• Explora=on
risk
insurance
(1
Unterhaching)
• Produc=vity
guarantee
insurance
-­‐
insures
the
risk
of
finding
geothermal
reservoirs,
which
do
not
have
sufficient
discharge
for
the
feasible
economic
development
of
a
geothermal
project.
-­‐
Michael
Schneider,
KONSENS
KG,
Germany

31. Philosophy
of
Resource
Risk
Management
in
the
US
• Although
resource
risk
is
similar
world-­‐wide,
the
economic
and
physical
environments
in
the
US
probably
lead
to
more
acceptance
of
risk
than
elsewhere
• Commercial
/
business
solu=ons
are
preferred
in
the
US
-­‐
Joint
ventures
and
equity
partnerships
-­‐
Risk
pooling
(via
a
porrolio
of
projects)
-­‐
Power
price
supports
-­‐
Ann
Robertson-­‐Tait,
Roger
Henneberger
and
Subir
Sanyal,
GeothermEx

32. Commercial
Approaches
to
Resource
Risk
Mi,ga,on
in
the
US
• Risk
Pooling
–
by
developers
themselves,
by
equity
investors,
by
financiers
• Porrolios
within
one
company
• A
porrolio
developed
from
projects
of
several
companies
• Risks
can
be
hidden
without
good
due
diligence
• Mechanisms
used
by
oil
&
gas
developers
and
mineral
resource
developers
to
auract
risk
capital
• Equity
partners
who
understand
resource
risk
• Can
tolerate
a
few
dry
holes
• Shared
royalty
pools
for
specific
projects
-­‐
Ann
Robertson-­‐Tait,
Roger
Henneberger
and
Subir
Sanyal,
GeothermEx

33. US
Resource
risk
management
tends
to
be
handled
by
a
combina,on
of:
• Technical
approaches
(applica=on
of
best
prac=ces
for
explora=on,
development
and
resource
management,
based
on
a
significant
body
of
resource
development
experience)
• Commercial
approaches
(risk
pooling,
joint
ventures,
equity
funding)
• Government
/
regulatory
/
legisla=ve
approaches
(price
supports
and
tax
mechanisms,
cost-­‐shared
funding)
-­‐
Ann
Robertson-­‐Tait,
Roger
Henneberger
and
Subir
Sanyal,
GeothermEx

34. CHALLENGES

35. Technical
barriers
• While
some
high
temperature
hydrothermal
are
compe==ve,
many
geothermal
technologies
are
more
expensive
than
fossil
plants
(but
may
be
less
expensive
than
other
RE
sources
like
solar
and
wind)
• Large
differences
and
cost
ranges
per
technology
make
it
difficult
for
project
finance
• Some
new
technologies
have
yet
to
be
developed
and
tested
commercially
• According
to
the
Interna=onal
Energy
Agency,
EGS
will
only
become
commercially
available
aver
2030
• Data
from
unconven=onal
geothermal
and
EGS
geothermal
heat
deployment
are
scarce

36. Risk
Factors
• Foreign
equity
ownership
• Availability
of
geo-­‐scien=fic
informa=on
and
professionals
• Area
status
and
clearance,
conflict
with
other
land
use,
surface/land
ownership
• Procedural
efficiency
and
clarity
between
government
agencies
• Judicial
interven=on
and
opposi=on
by
some
sectors
of
civil
society

37. Market
facilita,on
and
transforma,on
• Development
of
more
compe==ve
drilling
technology
• Introduc=on
of
guarantee
schemes
• Development
of
publicly
available
database
protocols
and
tools
for
geothermal
resource
assessments
• RE
Financial
Program
–
geologic
risk
insurance,
facilitate
access
to
risk
capital

38.
Development
of
guidelines
for
the
following
mechanisms
• Renewable
Porrolio
Standard
• Inclusion
of
the
following
technology
for
Feed-­‐in
Tariff
Rates
• Acid
well
u=liza=on
• Enhanced
geothermal
systems
• Low
enthalpy

39. Conclusion
• Since
2005,
a
geothermal
renaissance.
New
countries
and
new
companies
have
joined
the
geothermal
community.
• New
technologies
have
been
implemented.
Lower
resource
temperatures
are
now
recoverable.
EGS
widens
the
accessibility
of
geothermal
energy.
• BUT:
Regulatory
framework
should
be
long
term,
transparent,
predictable
and
independently
administered
• As
long
as
costs
are
higher
than
fossil
fuel
plants,
economic
and
financial
incen=ves
are
appropriate
• Public-­‐private
partnerships
must
foster
private
sector
investments
in
new
technologies

40.
About the Speaker
• BS
Geo,
Bachelor
of
Laws
(UP),
Master
of
Laws
(Univ.
of
Melbourne)
• Director,
Interna;onal
Geothermal
Associa;on
• Trustee,
Na;onal
Geothermal
Associa;on
of
the
Philippines
• Director,
Clean
Rock
Renewable
Energy
Resources
Corp.
(Na;b
and
Daklan
RE
Service
Contract
areas)
• Professorial
Lecturer,
UP
Na;onal
Ins;tute
of
Geological
Sciences
• Managing
Partner,
Puno
and
Penarroyo
Law
(www.punopenalaw.com)