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REIA2000 Conference Renewable Energy in the Americas Organization of American States Washington DC, USA December 4, 2000. FINANCING OF PRIVATE GEOTHERMAL POWER GENERATION. Lucien Y. BRONICKI ORMAT International Inc. P17a (spl) 0012. 1962.

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financing of private geothermal power generation

REIA2000 Conference

Renewable Energy in the Americas

Organization of American States

Washington DC, USA

December 4, 2000

FINANCING OF PRIVATE GEOTHERMAL POWER GENERATION

Lucien Y. BRONICKI

ORMAT International Inc.

P17a (spl)

0012

1962

slide2

Installed Geothermal Capacity (~8,000 MWe)(**) and

Worldwide Potential* (~60,000 MWe)(*)

COUNTRY INSTALLED ELECTRICAL POTENTIAL FOR

GENERATION CAPACITY ELECTRICAL GENERATION

MWe MWe

USA 2,300 12,000

The Philippines 1,900 6,000

Mexico 850 1,500

Canada -- 250

South & Central America 360 2,000

Western Europe, incl. Iceland 970 1,200

Other European countries 40 500

Indonesia 590 16,000

Japan 550 2,400

P. R. China 30 6,700

New Zealand 440 1,200

Africa, incl. Kenya 60 6,500

Others 10 3,700

* Hot Fractured Rock Excluded

** As of August 2000

SOURCE: US DOE and World Geothermal Congress 2000

1396

slide3

1. RESOURCE DISTRIBUTION

Worldwide Geothermal Energy Distribution

Areas where Geothermal Projects are in Operation or Planned

Geothermal areas where ORMAT plants are in operation

Geothermal areas where ORMAT plants are planned

1949

average capital and delivered costs

3. COSTS

Active Solar Air

& Water Heating

Average Capital and Delivered Costs

22000

Capital Cost

(US$/kW)

Solar Photovoltaic

4000

Solar Thermal Power

Biomass - Energy

Forestry Energy Crops

3000

Geothermal

Land-based Wind Energy

2000

Nuclear

Hydro Power

Coal

Wind

Waste Heat

1000

Cost of delivered

energy (US$/kWh)

Biomass - Landfill

Gas from Wastes

Gas

0

0.16

0.18

0.86

0

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.20

0.88

1587

SOURCE: SHELL and DOE

slide5

2. TECHNOLOGY

Conventional Geothermal Steam Power Plant

ORMAT Geothermal Power Plant

All Fluids Reinjected:

Sustainable, No Power Reduction

No Emissions (No Abatement Needed)

No Plume (Air Cooled Condensers)

Low Profile

Not Sensitive to Quality of Brine & Steam

Consumes Water:

Aquifer Depletion, Power reduction

Effluents or Expensive Abatement

Plume

Visual Impact

Water Treatment Needed:

Use and Disposal of Chemicals

1391

slide6

5. ORMAT EXPERIENCE: A MATURE TECHNOLOGY

Distributed Renewable Energy and Resource Recovery

700 MW of ORMAT Power Plants in operation in 20 countries

During the last decade, ORMAT’s power plants have already avoided the emission of 12 million tons of CO2 and saved 4 million tons of fuel

THAILAND, since 1989

Geothermal, Heat Recovery, Biomass, and Solar

1470

slide7

Applications of

ORMATEnergy Conversion Technology

GEOTHERMAL

SOLAR

Wabuska, USA

1987

Ein Boqeq, ISRAEL

1979

WASTE HEAT

BIOMASS

Lengfurt, GERMANY

1999

Minakami, JAPAN

1998

1953

slide8

ORMAT Geothermal Power Plants

In Developed Countries

USA

1984

Azores Islands

1994-1998

600 kW

New Zealand

Wabuska Power Plant

1989

Iceland

Phase I: 5.5 MW

Phase II: 8.5 MW

1989

Sao Miguel Power Plant

2.6 MW

Bay of Plenty Power Plant

3.9 MW

Svartsengi Power Plant

1955

private geothermal power generation makes good business sense
Private Geothermal Power Generation Makes Good Business Sense:
  • Large Scale Projects are supplying commercial electricity to national power grids.
  • The technology is Field Proven in industrial and less developed countries
  • Geothermal is competitive with fossil fuels
  • The projects work economically with private financing in the industrial countries
  • Private/Public partnership in developing countries
  • Work with governmental and multilateral agency support
  • Smaller scale plants are providing power to national and local, as well as to rural “mini-Grids

1759

slide10

ORMAT Modular Geothermal Power Plants

In Developing Countries

Leyte Optimization,

The Philippines

1997

Olkaria, KENYA

2000

49 MW

1st phase: 8 MW

Financing: Equity ORMAT 80% ,

EPDCI (Japan) 10% & Itochu 10%

Term Loan: US Exim Bank

Financing: all equity by ORMAT

Insurance: MIGA

1957

slide11

CASE HISTORY:

Financial Structure of the ZUNIL Project

24 MW

1999

1933

lessons from public private parnership projects in developing countries
LESSONS FROM PUBLIC-PRIVATE PARNERSHIP PROJECTSIn Developing Countries
  • Project Hurdles
  • Commercial and financial barriers
  • Credit issue barriers
  • Institutional barriers
  • Power legislation barriers: changes after contract signature such as
  • dispatchability
  • Standards, specifications and lengthy and costly reviews:
          • Fixed soft costs disproportionate to small project size
          • Micro-management of the project rather than
          • enforcement of specifications

1959

slide13

Project Opportunities

Accelerating renewable energy deployment by public-private partnership

Public Sector Role:

Now: 1. Subscribe to political risks, streamline and unify procedures

2. Assure correct and stable institutional framework

3. Assist developing countries in assessing local & rural needs

4. Provide performance specification

Future:

1. Reduce subsidies for fuel and unnecessary grid

2. Level the playing field: internalize renewable external

benefits or use market mechanism for carbon trading

Private Sector Role:

1. Provide all or part of equity investment

2. Provide the construction loans

3. Guaranty specifications performance and electricity prices

4. Provide technology transfer, O&M training and supervision

1960