The Assessment Of Potential And Promotion Of New .

The Assessment of potential and promotion of newgeneration of renewable technologies Geothermal EnergyRuggero BertaniEnel Green Power Geothermal Business DevelopmentVice President EGECBruxelles, 22nd March 2011

Global Resources Availability and EGP presence 35 plants - 750 MW* - 5,200 GWh 460 people involved in operation Types: dry steam, flash steam and binary cycle Operations since 1904Tenerife /GreeceTurkey / FranceResource evaluationUS - NevadaIn operation47 MWUS - UtahDrilling17 MWEl SalvadorIn operation200 MWItalyIn operation 695 MWChileDrilling80 MW* Consolidated MW as of June 2010. El Salvador capacity is not consolidated.2

European Geothermal Energy Council3

European Geothermal Power MarketVision 2050 – EU27EU27 - Geothermal Power Installed Capacity (2007-2050)GeothermalElectricity 9201,2002,0002,500Electricity LowTemperature15703005,0007,500Electricity EGS-104,50015,00090,000Total 0,000100,000Yearly ElectricityProduction (TWh)6.58.050.0234780Based on existingtechnologiesEGS still at veryearly stage ofdevelopmentSource: EGEC data in RE-thinking 2050, April 2010.Note: At the end of 2010 10MW EGS pilot plants will be operating (of which: 1.5MW in France, expected to be upgraded to 5MW byyear-end and 3MW in Germany). In order to achieve the forecasted installed capacity, EGS commercial plants are expected to have anaverage capacity of 25-50 MW each.4

European Geothermal Power MarketBreakdown by Key Markets - 2020EU27 MarketsInstalledCapacity (MW)2009Other European MarketsHigh / LowEnthalpy in the2015CountryInstalledCapacity (MW)2009High / LowEnthalpy in the2015CountryHigh / LowIceland573800High60HighTurkey87206High / Low-40Low82194HighGreece-30Low -LowAustria15LowCzech 84392323SpainPortugalTotalIndustry development plan in Europeshould be in bothtraditional high temperature resourcesand binary projectsSources: IGA, EGP estimates, ABS The Geothermal Energy Report, EER.* High enthalpy is available in Greece, but public opposition is blocking every commercial initiative in this technology.5

European Geothermal Power MarketKey Barriers and Actions NeededBarrierDescriptionActions NeededResource Geothermal resource availability Well productivity & field capacity Presence of earthquakes-volcanicactivity near the resource R&D activity: technology improvements to identifythe resource and to exploit geothermal resourcesat different temperatures Coordination of activities to share explorationresults (i.e. public databases providing location ofresources)Environment Regulation for construction andoperations Air emissions & noise pollution Visual impact Coordination of activities to address permittingissues Technological solutions (i.e. Enel development ofAMIS technology) Architecture solutionsProject economics High initial investment costs High O&M costs Financial support and incentives Coordination at EU, national and regional levels tosupport and regulate the sector, providing visibility Support bank financingSocial Misleading information Lack of knowledge Local hostile institutions /environmental associations Creation of consensus through information andcommunication Improvement of the relationship with communitiesDemand Trend of energy demand Competition from other renewablesources Planning of geothermal projects with grid access Support to distributed generation/smart grids6

EGP in ItalyTo reduceenvironmentalimpacts Innovative AMIS technology todecrease H2S and Hg emissions Environmental plans: 30 M invested inland recovery New architecture solutions to createconsensus and avoid negative visualimpactTo increasesocialacceptance Improved communication to local communities (ISO 14001 certification for eachpower plant, technical data on air and water quality, etc.) Diffusion of knowledge on geothermal technology (i.e. cooperation with schools) Improved cooperation with the regional Authority to achieve an agreement interms of environmental standards7

Classification of Geothermal SystemWater presence (as carrier medium)Dry 5: 500 m 500: 5000 m Deep reservoirs Shallow reservoirsWet Conventional hydrothermal systemsor heat exchange Heat exchange Description: Hot shallow reservoirsare used for generation of electricity ina conventional geothermal system Description: Heat pumps are used totransfer heat between the surface andsubterranean levels Cold shallow reservoirs are used forheat exchange, cooling buildings insummer and heating in winter Methods include horizontal loops,borehole heat exchanges, and energypiles Uses: Electricity generation and heat Uses: Heat exchange Conventional Hydrothermalsystems Enhanced geothermal systems Description: Super heated groundwater is released through geothermalwells and is transformed into steam togenerate electricity as it travels towardthe surface Uses: Electricity generation Description: Hot dry rock reservoirsare developed by injecting highpressure water into a stressed zone,causing it to fracture. Heat istransferred to the water, used forgeneration and re-injected into thereservoir, forming a closed-loop system Uses: Electricity generation8

Uso:inserire classificazioneClassification of Geothermal Plants Dry steam power plantsDry steam plantsuse hydrothermal fluids thatare primarily steam. Thesteam goes directly to aturbine, which drives agenerator that pacity2007（GW) Flash steam power plants Flash steam power plantstap into reservoirs of water withtemperatures greater than 182ºC.As it flows, the fluid pressuredecreases and some of the hotwater boils or "flashes" into steam.The steam is then separated at thesurface and is used to power aturbine/generator unit58 Binary cycle power plants2.6Highly cost competitive but geographically limited 195 5.6Most dominant interms of globalcapacity Binary cycle power plantsoperate on water at lowertemperatures of about 107182ºC. These plants use theheat from the geothermalwater to boil a working fluid,usually an organic compoundwith a low boiling point. 237 0.8Useful alongsidegeothermal heating, hotsprings, etc9

Geothermal ForecastingMedium termoutlook 5-10yearsPast 5-10years Long-term outlook10 yearsToday Dry steam ( 3 GW of capacity today)Rationale Mostly proven and cost-effectivetechnologies Incremental plant technologicaladvances going forward Binary only as an ancillaryapplication due to infancy stage oftechnological development (i.e.,higher costs) Binary proven to be a self-standingtechnology, increasing overallinstallable potential Economics not yet in line withsteam technologies (dry and flash),expected to improve in the longterm Technology still in“development” phase Under certain technologicaldevelopment outlook (i.e., fastdecrease in technology costs),expected to increase installablepotential To be addressed current issues ofseismic complications and poorreplicability across sites Flash steam ( 6 GW of capacity giesBinary cycle( 1 GW of capacitytoday)Binary iesEGS(Pilot project inFrance)10

Uso:inserire classificazioneGeothermal electricity CostMAIN GOVERNING FACTORS Nature of the Project (greenfield vs. expansion) Size of the project (economy of scale) Rock and Resources characteristics (site accessibility, depth,permeability, volume of reservoir, temperature, well productivity,water table level, chemical and gas contents, fluid pressure,thermodynamical fluid characteristics) Permitting and Environmental constraints Grid access Cooling system: water vs. air Scaling, corrosion, H2S abatement system , non-condensable gas11

Geothermal electricity CostEUR million, based on a 20 MW plant Upfront costs for explorationCapital cost per MW ranging between4 and 6 million EUR Exposure to risk of failure (i.e., site not sufficientlyattractive for development)30-6080-12050-603020-301-2Site scouting and Exploratory drillinggeophysicalexplorationDrillingField developmentPower plantconstructionTotal expenses12

Geothermal electricity CostCosts for geothermal are site specificand differ by technology and do not yet compare well to nonrenewable technologiesCapital costCapital cost2007, EUR/KW installed2007, EUR/KW installedEGSBinary 12,000 6,300GeothermalRooftop PV4,700Wave tidalFlash steam Are large and highlydependent upon thespecific site andtechnology3,690 5,000Wind off-shoreDry steamGeothermalgeneration capitalcosts5,000 4,000Capital cost is highly dependent upondrillingSolar CSP3,000 Require a greaterinvestment than allother renewable andconventionaltechnologies2,150Nuclear1,540Wind on-shore1,400 The number of geothermal wellsrequired (mass-flow rate)Biomass1,150 The depth of drilling (temperaturerequired)Small hydro1,150Coal1,1001313

Geothermal electricity CostCapacity factor2007 Energy cost EUR/MWhPercentRooftop PVSolar CSPRooftop PV17Solar CSP24Wave tidalWave/tidal60Wind off-shoreWind off-shoreBiomassSmall hydroGeothermal250Among therenewable,geothermalenergy is bestsuited forbase loadcapacity,having12211035GeothermalWind on-shore35060-90802735 90CCGT75-80Biomass70-80Wind on-shore70-80Small hydro High capacityfactors Low fullgenerationcosts45-551414

Geothermal electricity CostLCOE, EUR/MWhAssumptions 70-3%Dry and flashsteam502007 902020**-2% 70Binary cycle20072020** Reduction in drilling and explorationcosts of 25% (improvement beneficial toall geothermal technologies) Incremental decrease in plantconstruction cost of 1.3% p.a. (drivenby 10% historical learning effect anddemand evolution from current 10 GW to 30 GW by 2020) driving CAPEX» From 5 million to 4 million/MW forflash steam technology» From 6 million to 5 million/MW forbinary cycle technology Higher plant availability from 6/7000hours of utilization to 8,400 hours15

Geothermal and other Renewables* EstimatedInstalled ca pacityGWe%HydroBiomassW indGeotherma lSolarTotal77840*599489087.54.56.61.00.4100Pro duction pe r a cityfactor(% )4252*21721441Geothermal energy is available day and night every day of the yearand can thus serve as a partner with energy sourceswhich are only available intermittently.It is most economical for geothermal power stations to serve asbase load throughout the year.16

Geothermal and other RenewablesCoalGasNuclearOilOther sourcesNon-rene wables totalHydroBiomassWasteWindGeothermalSolar thermalSolar PVTide, Wave, OceanRenewables totalTotal world gene ,4216,480,850,440,470,320,010,000,0018,58100,00The present geothermalinstalled capacity of10 GW is expected toincrease up to11 GW in 2010.The overall CO2 savingfrom geothermalelectricity can be in therange1000 (coal)/500 (gas)million tons per year,if the target of140 GWwill be reached17

Geothermal and other RenewablesCurrentFavorablecostsTechnology featuresNot ialEnvironmentBase tprintCO2(land voltaicsBiomassSmall hydro18

Uso:inserire classificazioneGeothermal AdvantageDISADVANTAGESADVANTAGES19

Uso:inserire classificazioneGeothermal AdvantageADVANTAGESIndigenous and Sustainable ResourceEnvironmentally BenignReadily Available, Easily TappedCompetitive CostEnormous Resource BaseHigh Availability, not bounded by external factorsAppropriate for Electricity Generation as Base Load ResourceCascade Direct-Heat Utilization20

Uso:inserire classificazioneGeothermal AdvantageADVANTAGESIT IS CLEANIT IS HOMEGROWNIT IS SUSTAINABLEIT IS CHEAP21

Uso:inserire classificazioneGeothermal AdvantageDISADVANTAGESElectricity production, with present technology,is bounded only to limited areaswhere geological conditions are favorableIt requires big initial investment,generally not accessible to small companiesIt requires a risky exploration phases,which can result as a no-profit activityin case of negative results22

Uso:inserire classificazioneGeothermal AdvantageGeothermalEnergy:FIREWITHOUTSMOKE23

Geothermal energy is available day and night every day of the year and can thus serve as a partner with energy sources which are only available intermittently. It is most economical for geothermal power stations to serve as base loadthroughout the year. Installed capacity Production per year GWe % TWh/yr % Capacity factor (%) Hydro 778 87.5 .