GEOEXPO+ Marketing Forum Agenda Released, Geothermal Developments

In this post:
NEW THIS WEEK!
Indonesian Government Offers Up 30 Geothermal Working Areas Until 2018
Toshiba to Supply Steam Turbine and Generators for One of World’s Largest-Class Geothermal Power Plant Projects
Indonesian Government to Streamline Geothermal Permits
Philippines EDC Plant Expanding Within Geothermal Site
Geothermal Players Seek FIT Accreditation from DOE
EERE Success Story-Geothermal Wells: Advancing the Technology
ThinkGeoEnergy: UN: The Great Role of Geothermal for Indigenous Group in NZ
Renewable Energy World: Too Many Projects Can Lead to Too Many Problems

bacman

The Philippines Bacman geothermal plant.

Image Credit: pna.gov.ph 

NEW THIS WEEK!
The GEA releases its 2016 Marketing Forum Agenda for the highly anticipated GEA GEOEXPO+October 23-26, 2016 at the Sacramento Convention Center held in conjunction with the GRC Annual Meeting.
Who are the game changers in the geothermal energy industry? Check out the sessionExhibitors Leading Innovation at the GEA Marketing Forum to see how some of GEA’s2016 Exhibitors are paving the way for geothermal development through new projects, products/ services, and technology.
Interested in what agencies are doing and how they can help your business? Representatives from OPIC, USTDA, World Bank, Ex-Im Bank, US DOE GTO, USAID amongst others will step onto the Marketing Forum stage for the Agency Briefing. The goal – to bridge the gap between US companies and agency opportunities related to financing, grants, project work and resources.
Other sessions include a KfW Development Bank Finance, Grant and InvestmentWorkshop coordinated by the Dewhurst Group with support from Panorama Environmental for the following target areas: Chile, Bolovia, Peru, Ecuador, Colombia, Costa Rica, Nicaragua, Honduras, and Guatemala.
All Marketing Forum Sessions are held in the GEA’s GEOEXPO+ Trade Show Hall (click here for the floor plan).
Interested in attending? Purchase a GEA GEOEXPO+ Pass Today!
Questions? Contact Rani Chatrath at rani@geo-energy.org.
Indonesian Government Offers Up 30 Geothermal Working Areas Until 2018
The government is hoping to see 30 geothermal working areas tendered from 2016 to 2018 to speed up geothermal development in the country.
Yunus Saefulhak, the Energy and Mineral Resources Ministry’s director of geothermal energy, said Indonesia’s potential geothermal power amounted to 29,000 MW spread across 300 locations.
“As of today, of a total of 69 working areas, only nine produce power installed with a capacity of 1,493 MW. At the end of 2016, we expect to achieve 1,653 MW from three geothermal power plants,” Yunus said at the 4th Indonesia International Geothermal Convention and Exhibition.
The geothermal working areas on offer through a bidding process from 2016 – 2018 are: Aceh (1), North Sumatra (2), West Sumatra (2), Jambi (1), South Sumatra and Lampung (1), Bengkulu (3), West Java (3), Banten (1), Central Java (1), East Java (4), West Nusa Tenggara (2), East Nusa Tenggara (2), Central Sulawesi (2), Southeast Sulawesi (1), Gorontalo (1) and North Maluku (3)
The government has appointed public utility firm PT Perusahaan Listrik Negara (PLN) to develop the Ulumbu and Mataloko geothermal working areas in East Nusa Tenggara with capacities of 50 MW and 22.5 MW, respectively. PLN president director Sofyan Basir has committed to completing the assignment by early 2020.
This year, PLN plans to increase its electricity load from geothermal power plants.
Toshiba to Supply Steam Turbine and Generators for One of World’s Largest-Class Geothermal Power Plant Projects
Toshiba Corporation recently announced that is has been awarded a major contract to supply 3×60-megawatt geothermal steam turbines and generators (STG) for one of the world’s largest geothermal power plants, the Sarulla geothermal power plant project, which is now under construction in Tapanali Utara in Indonesia’s North Sumatra.
Toshiba, the world’s leading supplier of geothermal power generation equipment, was awarded the contract by Sarulla Operations Ltd. (SOL), a four-company consortium of Itochu Corporation and Kyushu Electric Power Co. Inc. of Japan, PT Medco Power Indonesia of Indonesia, and Ormat International, Inc. of the U.S.A. The engineering, procurement and construction (EPC) contractor is Hyundai Engineering and Construction Co., Ltd. (HDEC). Toshiba will start to supply STGs to HDEC in July 2015, and the plant is scheduled to start operation in November 2016. Its output will account for approximately 1% of Indonesia’s total power generation.
Indonesia has the world’s second largest geothermal resources, a potential generating capacity of 28,000MW, but installed capacity to date is a low 1,300MW*1. With growth driving demand and shortfalls in supply, the Indonesian government is promoting geothermal power as a means to raise generating capacity and reduce reliance on oil, where demand outstripped local production in 2004. Government plans include IPP projects with a capacity of 12,000MW*2 by 2025, which the Japanese government is supporting through its yen loan program.
Toshiba, an industry leader in power generation equipment, has world-class capabilities in nuclear, thermal and renewable power generation equipment. The company entered the geothermal business in 1966 with the supply of an STG for the Matsukawa plant, Japan’s first geothermal plant, and subsequently expanded into North America, Southeast Asia and Iceland. Today, Toshiba is the world leader in the manufacture of STGs, with a market share of 23%*3, and has supplied 52 units with an installed capacity of 2,800MW. In recent years, Toshiba’s technological capabilities have supported order wins for geothermal STG in New Zealand, Kenya and Turkey.
Toshiba is highly familiar with the Indonesian market, where it is a leader in power generation equipment supply. The company’s record to date includes 12 steam turbines and generators with a combined capacity of 4,200MW for four thermal power plants, including the Tanjung Jati B coal-fired thermal power plant; 26 hydroelectric turbines and generators with a combined capacity of 1,500MW for 11 hydroelectric power plants; and the Patuha Unit 1 project, a 55MW geothermal power plant now under construction in West Java.
Going forward, Toshiba will seek to contribute to the expansion of electric power supply in Indonesia, including continued participation in projects to promote lower emissions of carbon dioxide and environmentally-friendly geothermal power and other renewable energy projects.
Indonesian Government to Streamline Geothermal Permits
The government is seeking to streamline business permits in the geothermal sector in an effort to attract investments and achieve its target of a sevenfold increase in the portion of electricity generated by renewable sources in the next 10 years.
Under a recent Energy and Mineral Resources Ministerial Regulation, which named geothermal a priority sector, the geothermal industry is entitled to priority investment services and investors can obtain necessary permits within three hours at the Investment Coordinating Board (BKPM), a privilege other industries already enjoy.
The three-hour service aims to speed up the various permit processes to create a business-friendly environment in selected industries.
Further, geothermal investors are also entitled to the one-stop service at the board, in which documents like the geothermal business license and temporary electricity supply permit can be completed without visiting other related institutions.
BKPM director of agribusiness and natural resources investment planning Hanung Harimba Rachman said the board in cooperation with the Energy and Mineral Resources Ministry was seeking to further streamline doing business in the sector.
“We are currently in talks with the ministry to determine other permits that can be delegated to the BKPM,” Hanung said on the sidelines of the Fourth Indonesia International Geothermal Convention and Exhibition at the Jakarta Convention Center on Thursday.
Indonesia’s geothermal potential is 29,000 megawatts (MW), but the country has only utilized 1,494 MW, about 5 percent.
The government is aiming for a sevenfold increase in renewable energy by 2025 to 7,156 MW, about 23 percent of the total potential.
An investment of up to US$5 million per MW is needed to achieve the target.
Industry players have thus far been reluctant to develop geothermal energy due to the costly exploration process compared to coal and gas. A complicated bureaucratic process and uncertain returns have also discouraged companies.
“We will continue to facilitate and further ease investment in geothermal because it one of the government’s main priorities,” Hanung said.
Separately, Energy and Mineral Resources Ministry director for geothermal Yunus Saefulhak said the ministry was currently in the middle of a study with the Japan International Cooperation Agency (JICA) and British consultant services Arup to determine a new tariff regime for the industry.
Under a feed-in tariff, investors are paid a cost-based price for the energy they supply. Thus, renewable energy can be developed and investors can still enjoy a return.
In the current system, investors must negotiate the feed-in tariff with state electricity company PLN, which can take up to years before the two parties agree on an amount beneficial for both.
“We will determine a new feed-in tariff that is more economically beneficial for investors,” Yunus said at the same occasion.
Yunus said the government has identified 69 geothermal blocks, but only nine have active operations.
Until 2018, the government is set to auction 30 geothermal working blocks across the country with a total potential of 3,332 MW in reserves.
The working blocks are located in Hamiding Mountain in North Maluku with a potential 265 MW in reserves, Ranau Lake in South Sumatera with 210 MW and Bonjol in West Sumatera with 200 MW, among other places.
Philippines EDC Plant Expanding Within Geothermal Site
Energy Development Corp. said over the weekend the 60-megawatt expansion of the Southern Negros Geothermal Power Plant in Valencia, Negros Oriental will not encroach into a biodiversity area.
EDC, the country’s biggest geothermal energy producer, is expanding Southern Negros Geothermal’s capacity to 282.5 MW from 222.5 MW to meet the region’s growing electricity needs.
“We will confine our expansion within SNGP’s existing geothermal production block in Valencia,” EDC’s Negros Integrated Geothermal Business Unit head Jay Joel Soriano said.
EDC recently organized a recent site visit for various stakeholders to the Southern Negros Geothermal power plant in Valencia, Negros Oriental to dispel allegations against the expansion plan.
Reports from some quarters said EDC’s expansion required an additional 5,163 hectares that would encroach into Mount Talinis, considered a key biodiversity area in Negros Oriental.
EDC, however, said the expansion involved an increase in capacity, not the area.
Southern Negros Geothermal’s existing geothermal production or development block spans 5,163 hectares in the Palinpinon-Okoy watershed in Valencia, which is physically separate from Mount Talinis.
Southern Negros Geothermal’s steam field and power plant occupy less than 200 hectares, and EDC assured the expansion would be confined within the existing development block of 5,163 hectares.
“I believe the issue about SNGP’s plan to expand by another 5,163 hectares is a result of a misunderstanding, because the supposed additional expansion area corresponds to our existing development block,” Soriano said.
“But as we have been saying, we are not in Mount Talinis and we are not going to Mount Talinis,” he said.
EDC is awaiting the release of the environmental compliance certificate from the Environment Department for the 60-MW geothermal expansion.
The company said the proposed expansion went through public consultations and hearings for the ECC application and received the strong endorsement for an ECC from the host communities and local government of Valencia.
“But pending the release of the ECC, EDC has not begun any activity for its proposed geothermal expansion project,” Soriano said.
Geothermal Players Seek FIT Accreditation from DOE

In order to address barriers related to costs and resource exploration risks faced by geothermal energy developers, the National Geothermal Association of the Philippines (NGAP) is calling for coverage under the feed-in tariff (FIT) program of geothermal emerging technologies currently not commercially viable under existing market and pricing structures.
FIT is a pre-set power price guarantee for qualified renewable energy providers. Under RA 9513, the 2008 Renewable Energy Act (RE Act), FIT given to solar, wind, and other renewable energy companies with “emerging technology” for the Philippines, but not for geothermal energy producers.
The Department of Energy (DOE) is encouraging the development of renewable energy through the National Renewable Energy Program (NREP). The NREP outlines the government’s goal of increasing geothermal power capacity by 75 percent, with another 1,465 MW from 2013 to 2030.
In consultation with the NGAP, the DOE has determined that meeting the target will require certain enabling actions by the government as detailed in the 2016 Geothermal Road Map.
“The DOE strategy now is to apply new development technologies to what previously were considered to be second tier resources e.g. technologies that can utilize acidic and young geothermal systems, development of low enthalpy geothermal systems, direct use of small-scale geothermal energy technologies (for example, modular well head turbines), and hybrid technologies,” Fernando S. Peñarroyo of the NGAP said.
“With an appropriately structured feed-in tariff rate that will provide guaranteed payment to investors through a universal charge, these acidic and lower enthalpy resources can be developed to generate electricity. FlTs and other incentive mechanisms are already being used effectively in many nations around the world to support the commercial viability of such resources,” he said.
“On a bright note, the DOE is receptive to the proposal of including emerging-technology in the array of RE projects that shall be incentivized under the FIT system, based on the recommendation of the National Renewable Energy Board, which must carry out an extensive study on the proposal,” Peñarroyo said.
The NGAP is a non-governmental, non-profit organization which aims to encourage, facilitate, and promote the coordination of activities related to worldwide and national research, development and application of geothermal resources.
Its members include Aboitiz Power, Chevron Geothermal Services Company, Department of Energy, Emerging Power Inc., Energy Development Corporation, Maibarara Geothermal Inc., and Philippine Geothermal Production Company Inc.
EERE Success Story-Geothermal Wells: Advancing the Technology
Geothermal resources are reservoirs of hot water that exist at varying temperatures and depths below the Earth’s surface. Wells 1 mile deep or more 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, including renewable power generation. The Department of Energy’s Geothermal Technologies Office (GTO) continues to support research, development, and validation of innovative technologies and tools to develop geothermal resources. This includes technologies that reduce the barriers to geothermal energy access.
One of the most critical components of geothermal resource development is the drilling process and the integrity and longevity of a geothermal well’s cementation of casings. After a geothermal production well has been drilled, the well must be stabilized with a casing, a large diameter pipe that is assembled and inserted into a recently drilled section of a borehole, in order to prevent the well walls from collapsing. The gap between the casing and the walls of the well is filled with cement, which locks the casing into place. Within geothermal wells, cement and casing integrity challenges are increased by the harsh conditions of high temperature, high pressure, and a chemical environment that can degrade conventional cement.

With assistance from GTO, Trabits Group, LLC has successfully developed a cement that performs strongly in harsh geothermal conditions and is easy to use. Containing zeolites a naturally occurring mineral that can be readily dehydrated and rehydrated this cement reduces the complexity and cost of well cementing, which will help enable the widespread development of geothermal energy in the United States.

Benefits of the newly developed cement include:
Cost Savings – Reduces the time and complexity of well cementing, lowering the overall cost of well completion.
Ease-of-Use – Provides compatibility with all common additives (e.g., retarders and accelerators) and minimizes the effect of down-hole temperature.
Environment – Reduces greenhouse gas emissions compared with Portland cement production by using naturally occurring pozzolanic zeolites.
Development of this cement marks another successful step toward harnessing and accelerating the deployment of geothermal energy a clean, domestic, natural resource to generate electricity
ThinkGeoEnergy: UN: The Great Role of Geothermal for Indigenous Group in NZ

In a recent article published by the UN Social Development Network, the great role of geothermal for indigenous Maori Tribes in New Zealand was highlighted.
Talking about how historical wrong doings by the British Government through the Treaty of Waitangi, were later redressed by the Crown of the Treaty, which provided native Maori tribes in New Zealand greater control of their lands and other resources.
This included geothermal resources on land owned by native groups in the country.
In the article, the example of Tauhara North No. 2 Trust was described and how it profited from a geothermal power plant by Mighty River Power on its land.
“The trust now has three geothermal power stations operated in joint venture with Mercury, which deliver sufficient energy to the national grid to power more than 265,000 homes. Through this and other ventures, the trust has accrued assets worth more than $NZ 317 million. Profits from the energy business, farming and other trust ventures are channelled through a Charitable Company, giving preference to the 6,000 owners and descendants of the Trust, then persons belonging to the iwi (tribes) Ngti Tahu-Ngati Whaoa, and finally to the public of New Zealand.”
This is a great example how local groups (in this case native tribes) can profit from development in a fair way. This could definitely be some good example for development in other regions of this world.
Renewable Energy World: Too Many Projects Can Lead to Too Many Problems
By Daniel Fleischmann
I was sitting in a small room 10,000 miles away from home in October of 2009 working for a developer focused primarily on geothermal energy. Two weeks before, my flight from the U.S. had been booked by an administrative assistant without even telling me I was going to leave the country in 10 days.Six jet-lagged individuals, having traveled halfway across the globe just 24 hours earlier, were ushered into the room where senior management posed a simple question to the group.
Can we develop 100 MW each year in the U.S. from internal geothermal projects?
Now up until that point, the geothermal industry in the U.S. had been stagnant for nearly a decade until late 2005. Since then, new plants were starting to come online each year; but only a few. 2009 was the first time in two decades that the U.S. geothermal industry would put more than 100 MW online in a single year. But could we do it on our own?
There were tailwinds. In his first month of office that year, President Obama had passed through the Stimulus Package with unprecedented support for renewable energy, including generous support for geothermal energy. Utilities were interested in geothermal. The market was wide open.
I knew our project portfolio like the back of my hand. I was tasked with identifying every geothermal field in the U.S., studying how to get the land, to interconnect to the electric grid, to find an electric utility to buy the power, and to determine whether it could even be permitted.
Geothermal plants aren’t like wind farms or solar installations. Companies must spend millions of dollars to drill exploration wells. Even if they are successful, they have to prove that the hot water they take out of the ground can be re-injected back into the ground sufficiently to recharge the reservoir for the next 20 years. There’s a lot of uncertainty.
Can we build 100 MW each year for the foreseeable future? Only one person raised their hand. The rest of us kept our hands at our waists.
Geothermal projects are typically between 10 MW and 50 MW; with an average size of about 25 MW. 100 MW would require between three to five new projects completed each year. Given the development cycle for geothermal projects (5 to 7 years) we would need to initiate three to five new projects each year just to keep up; or at least acquire projects from other companies. And not all projects are successful. The failure rate is about 80 percent. So if you need three to five projects to be successful, you need to initiate 15 to 25 projects. The numbers were staggering.
Think of what goes into a project; there is the land acquisition, the exploration work; the permitting, the procurement of drilling contractors; the engineering and building of roads; interconnection and transmission, power marketing (I’m sure there are things I am leaving out). A 25-MW geothermal project costs about $150 million, and each project is complex. Developing just one new project requires thousands of hours of man-labor. If you’re lucky, one geothermal field can generate two phases.
In our efforts to spur growth, we were hiring as fast as possible. We were acquiring new lands, and gearing up projects in all phases.
Over the following six years, the company managed to bring online about 150 MW of new geothermal capacity in the U.S. from seven projects at five sites; about 25 MW per year – 25 percent of the goal, but still not bad.
Throughout my career, developing geothermal, solar, and wind energy, I have felt the pressure to line up as many projects as possible that are “shovel-ready,” with permits in hand, with access to interconnection, and a power sales contract in place or at least in negotiation. This pressure wasn’t unique to where I worked; it was felt industry-wide.
I’ve personally worked on 5 to 10 projects at a time. However, I’ve seen companies with 50 to 100 projects in their portfolio from multiple technologies in multiple states. Often these projects are no more than a spot on a map, negotiated by a third party with a landowner. I recall one meeting where we were discussing drill targets for a new geothermal project. The geologists had selected their first target on a geologic map. When we looked it up on Google Earth™ we found it was next to someone’s driveway!
Companies often rely on contractors to review the environmental issues; geotechnical issues; interconnection; and engineering and design. The company staff instead focuses on power sales and financing.
But is this the right approach? Any developer can pick up properties, but developing a project takes time and effort. It takes attention to detail. It takes strategy. Often times once a project secures a power sales contract and advances in interconnection, a rush begins to get all the surveys lined up, start permitting and engineering design.
Relying solely on contractors for all of this can lead to overlap, miscommunication, and mistakes. Significant time and cost might be spent before realizing that a big change is required. I have experienced horror stories where a project gets killed after several years and hundreds of thousands even millions of dollars spent.
When problems arise, staff is overworked trying to deal with myriad issues they weren’t prepared for. Neighboring landowners concerned about the project; environmental and permitting issues; additional costs not anticipated. I’ve seen plenty of my colleagues working long hours, taking little to no vacation, or when they are on vacation still joining conference calls and answering e-mails just trying to keep projects on track.
I’ve learned to become knowledgeable about my projects from the beginning; studying them, mapping them, and doing site visits as early and as often as possible. My goal was to be ready when contractors came on site to give them all the information they needed to avoid these issues.
I had the privilege of working for great companies; companies who achieved great success. But even those companies have run into these challenges.
It is good to have goals. It is good to have new projects lined up. But having too many projects can lead to additional costs. Time spent on addressing projects with lots of problems can jeopardize projects with a higher chance of success.
Project success isn’t about who has the most acres under lease or even the most capacity under contract. It’s about getting involved with your projects early on, sweating the details, learning from mistakes, and solving problems to build projects on time and on budget.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s