Global Geothermal Development, CanGEA Conference, March 2013

Global geothermal developmentCurrent status of development and outlook

Alexander RichterThinkGeoEnergy.com@thinkgeoenergy

22 March 2013, CanGEA Conference, Calgary, Alberta

Overview on Status and Development

49 MW Hudson Ranch I, Salton Sea, California, U.S. – start of operation 2012

Current installed capacity

South America

Caribbean

Middle East

Africa

Central America

Aus., NZ & Pacific

Europe

North America

Asia

0 1,000 2,000 3,000 4,000 5,000

1

15

82

180

507

640

1,642

4,344

4,568

Source: ThinkGeoEnergy Research

Current Installed capacity & projects

Middle East

Caribbean

South America

Central America

Aus., NZ & Pacific

Africa

Europe

North America

Asia

0 3,000 6,000 9,000 12,000 15,000

82

15

1

507

640

180

1,642

4,344

4,568

168

320

729

298

666

2,249

1,271

6,447

7,868

In-stalled

Source: ThinkGeoEnergy Research

Installed, capacity & potential

Middle East

Europe

Aus., NZ & Pacific

Central America

Africa

Caribbean

South America

North America

Asia

0 15,000 30,000 45,000 60,000 75,000 90,000

2,551

3,406

7,694

12,405

11,571

15,065

30,780

32,209

70,884

InstalledProjectsAdditional Poten-tial

Source: ThinkGeoEnergy Research

Global Geothermal Energy Power Generation - Potential

• Installed power generation capacity, projects/ inferred resources & resource estimates

Sources: Islandsbanki, ThinkGeoEnergy, Geothermal Energy Association, IGA, ChevronNote: Installed Capacity of 2010 (2012), resource estimates combined (1999-2012) – IGA estimates a conservative total potential of 70,000 MW and with technology improvements (extended use of low heat and EGS resources) at around 140,000 MW in power generation capacity.

Current installed capacity

Projects & inferred resources

High temperature regions

Resource estimates

Installed Resources

North America

4,344

32,200

6,447

Installed Resources

Cent. America & Caribbean

522

27,400

618

Installed Resources

Europe

1,6423,400

1,271

Installed Resources

Africa

180

11,600

2,249

Installed Resources

South America

1

30,800

730

Installed Resources

Asia

4,568

70,884

7,868

Installed Resources

Aus., NZ & Pacific

640

7,700

666

Installed Resources

Middle East

822,550

168

Development pipeline

Australia

France

Ethiopia

China

Portugal

Papua New Guinea

Chile

Guatemala

Russia

Turkey

Nicaragua

Costa Rica

El Salvador

Kenya

Japan

Iceland

Italy

New Zealand

Mexico

Philippines

Indonesia

United States

1

16

7

24

29

56

0

52

82

82

88

166

204

167

536

575

843

628

958

1,904

1,197

3,093

40

35

45

60

60

75

150

120

190

200

240

200

290

530

535

800

920

1,240

1,140

2,500

3,500

5,400

2010

2015e

Sources: ThinkGeoEnergy, GEA, IGA Bertani (2010)

Development stages

Mauerstetten, Germany – dry well/ potential EGS project

Development stages

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 …

Exploration

PreFeasibility

Feasibility

Design & Construction

Start-up

• Focused Exploration on most favorable resource area

• Sufficient Exploration data collected & analyzed

• Drilling of first successful, full-sized production well.

• Confirmation Wells, Reserve Estimates & Preliminary Design

• Drilling & testing of remaining production and injection wells

• Civil works required• Final design & testing

• Geophysical surveys• Geochemical and geological

data collection & analysis• Temperature gradient

drilling

• Legal Work• Concession• Permitting

Operation

Global development by stages

Prospect Exploration Pre-Feasibility Feasibility Construction Other*0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

891

7,222

6,508

2,8622,423

110

Source: ThinkGeoEnergy Research

Regional development by stages

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

269 176

1,0752,903

2,533

190 594

145

1,7633,409

100 351

113

1,209

685

170 143

316

435

1,067

Construction

Feasibility

Pre-Feasibility

Exploration

Prospect

Current financial situation

Solok, West Java, Indonesia

Financing geothermal projects

Start-up Exploration/ Pre-Feasibility

Feasibility/ Resource Verification

Detailed Design & Construction

Start of Operation

Venture Capital

Development Equity

DrillingEquity

ProjectEquity

TaxEquity

Mezz./ Bridge Debt, Const. Financing

Project & VendorFinancing

• Developers

• IPPs (Development Pipeline)

• Resource Speculators

• Venture Capitalists

• Private Equity

• Public Markets

• Financial Partners

• Private Equity

• Strategic Partners

• Financial Players

• Large IPPs with ability to monetize PTCs

Source: Islandsbanki

0%

10%

20%

30%

40%

50%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Financing of power plants

0%

10%

20%

30%

40%

50%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$4.8bn TOTAL

Development bank

46%

Commercial lender

22%State-owned

entity

20%Pension fund 8%Government 4%

Annual new-build debt investment as proportion of total for past decade, 2002–2012

Source: Bloomberg New Energy Finance

Opportunities for Canadians

12.5 MW San Emidio plant, Nevada, U.S.

Canadian Geothermal Supply Chain

Canadian Geothermal Power & Direct Use of Heat Technology Roadmap and Deployment Framework

Canadian geothermal sector

Local consumers (indirect)

Local consumers (direct)

Equipment Suppliers

Core Industry Function

Geothermal resource

exploration & development

Geothermal energy

production

Geo-Science

DrillingBusiness consultin

gFinancing

Con-struction

Energy audit &

law firms

Technical consultin

g

Industry news

Transmission &

distribution

R&D, education, knowledge

Geothermal research

Training & education

Related industries

Mining Oil & GasOther

Energy Production

Government (Agencies, department, offices)

LegislationPermitting &

licensingMarket

Regulation

Drilling rigs & related

Turbines & generators

Other equipment

District heating

Industrial heating

applicationsRecreation,

health & tourism

Industry

Retail electricity

Economic Developmen

t

Industry associations

(CanGEA, IGA, GRC, GEA …)

ExplorationPre-

FeasibilityFeasibility Design & Construction Operation

Research & development

Drilling & related services

Off-takers

Manufacturers & equipment suppliers

Early-stage exploration

Business & related services

EPC

Transmission

Policy & development

O&M services

Drilling & related services

Canadian Case Study: Polaris/ Nicaragua

72 MW San Jacinto-Tizate plant, Nicaragua

Incorporation and listing on TSX (GEO)2003

Installation of initial 10 MW at San Jacinto-Tizate/ Nicaragua

2007

Start of Phase I constructionMerger of Polaris, Western GeoPower and Ram Power (RPG)

2009

Commercial operation of 36 MW Phase I expansion2011

Commercial operation of 36 MW Phase II expansion2013

Debt financing raised US$309.5m ($149.5 + $160m)2009-2011

72 MW San Jacinto-Tizate Geothermal Plant= 8% of Nicaragua’s installed capacity

Current market situation

• Current development would triple installed capacity

• Growth markets: Asia, Eastern Africa, South America

• Continuing financial constraints• Role of development banks• Vendor and export financing• Limit in industry capabilities

Canadian opportunities

Investment/ Finance

Development

Education

Services

Technology/ Supply

• Global news• Job Portal• Geothermal Power

Plant Map• Social media• iPhone app• Free pictures• Services

www.ThinkGeoEnergy.

com

Contact

Alexander Richter

[email protected]

Follow me:Twitter: @thinkgeoenergyLinkedIn Group: ThinkGeoEnergyFlickr.com/thinkgeoenergyYouTube.com/thinkgeoenergySlideshare.com/thinkgeoenergy