geothermal finance
DESCRIPTION
GEOFAR is a project that wants to overcome financial barriers in geothermal energy projects by providing tailored financial schemes for early phases in deep geothermal projects, from exploration to deep drilling.TRANSCRIPT
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 1
GEOFAR
Geothermal Financeand Awareness inEuropean Regions
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 2
GEOFAR - Overview
Project summary
� GEOFAR will support the fostering of the deep geothermal sectoracross Europe by providing new financing and funding schemes and raise awareness among the target group
� GEOFAR aims to
– reduce financial barriers hindering the initial stages of geothermal
energy projects
– raise awareness of industrial geothermal applications
– improve the know-how and awareness on geothermal energy among
regional decision makers
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 3
GEOFAR - Overview
Project summary
� Outputs and results:
– A set of new financing schemes
– Financial institutions checking due dilligence of the proposed financial
scheme
– Involvement of financial experts
– Awareness seminars in key countries for raising awareness of regional
stakeholders
– Documentary film on geothermal energy
– Stimulating investment in geothermal energy
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GEOFAR - Overview
Situation of geothermal energy
� A renewable energy source with extremely high potential.
� One important building block towards sustainable use of energy.
� Multiple usage: electricity generation, heating & cooling, desalinationand process heat.
� Limited exploitation of deep geothermal energy fields.
� Technology for the exploitation of geothermal energy is proven.
� Lack of exploitation mainly due to non-technical barriers during theearly stages of geothermal energy projects:
– Inappropriate funding schemes
– Inappropriate legal frameworks
– Ignorance of local decision makers regarding the potential of geothermal energy
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 5
GEOFAR - Overview
Vision
� Combating and overcoming non-technical / financial barriers via
– developing and proposing appropriate and innovative financing and
funding schemes
� Boosting the exploitation of geothermal energy via
– promoting (industrial) geothermal applications, and
– raising the awareness / knowhow among local and regional decision
makers.
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 6
GEOFAR - Overview
Objectives
GEOFAR aims to
� reduce financial barriers hindering the initial stages of geothermal energy projects through the development and proposal of appropriate financing and funding schemes.
� promote and raise the awareness of emerging (industrial) geothermal applications. The awareness raising activities are mainly directed towards local and regional decision makers and other potential stakeholders.
� improve the know-how and awareness among regional decision makers by exchanging experience and know-how among the target group.
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 7
GEOFAR - Overview
Main steps
� Identify and describe the non-technical barriers in selected countries
� Describe and present existing and emerging industrial applications suitable to increase the profitability of geothermal power plants
� Develop (new) appropriate and tailored financing and funding schemes
� Discuss and validate funding schemes with experts
� Outline constitutive elements for the modification of existing and/or new dedicated EC Directives or communications.
� Disseminate industrial applications and financial schemes to key stakeholders
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 8
GEOFAR - Overview
Geographical coverage
� Geographical coverage: Germany, France, Greece, Spain, Portugal, Bulgaria, Slovakia, Hungary
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 9
GEOFAR - Overview
Expected Result
Direct outcome
� Financial scheme – validated by experts – and checked for due dilligence
by financial institutions
Reports and fact sheets
� Non-technical barriers and the respective situation of the geothermal energy
sector in selected countries - Report
� Case studies for selected operations - Report
� Innovative geothermal technologies - Factsheet
� Financial instruments for the support for the exploitation of geothermal
energy - Report
� Emerging financing scheme for fostering investment in the Geothermal
Energy sector - Report
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 10
GEOFAR - Overview
Dissemination
Media
� GEOFAR-Website www.geofar.eu
� Documentary Film on geothermal energy
Dissemination
� 5 Awareness Seminars in target countries
� 1 Europe-wide large-scale Conference
� 10 Newsletters available under www.geofar.eu
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 11
GEOFAR - Overview
Partners
BRGM, France
Energo Group, Greece
Erlangen AG, Germany
IENE, Greece
IGME, Greece
IGME, Spain
Rödl & Partner, Germany
ARENA, Portugal
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GEOFAR - Analysis
Analysis
� The GEOFAR consortium analysed
– the respective situation of the geothermal energy sector concerning
direct use of geothermal water and electricity production and non-
technical barriers for the target countries Germany, France, Greece,
Spain, Portugal, Slovakia, Bulgaria and Hungary. – Output: Non-technical barriers and the respective situation of the geothermal
energy sector in selected countries - Report
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 13
GEOFAR - Analysis
Main non-technical barriers in geothermal
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 14
GEOFAR - Analysis
Main non-technical barriers in the target countries
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 15
GEOFAR - Analysis
Non-technical barriers - Conclusion
� The development of geothermal energy ranges from one country to another. This historical development and the current trend are naturally linked to the available resources, but there are otherreasons that boost or hinder development of deep geothermal energy.
� The main identified barrier is the geological risk of the non discovery of the resources in adequacy of the expectation of the project: money has to be spent meanwhile success of the project has not been proven.
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 16
GEOFAR - Analysis
Non-technical barriers - Conclusion
� Globally, the current approach for the decision to launch or not a geothermal energy project is mainly economic and financial.
� Developing a European financial support instrument could lead to a multiplication of operation, the mutualisation of competences and knowledge could have a positive impact at different level: Facilitating insurance proposal, raising awareness among financial institutions that work at European level, decreasing drilling costs…
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 17
GEOFAR - Analysis
Analysis
� The GEOFAR consortium analysed
– 40 case studies from Germany, France, Portugal, Spain, Greece,
Hungary, Slovakia and Bulgaria to give an overview on geothermal
projects in order to raise the target groups´ awareness on what is
possible and on how projects can be realised. – Output: Case studies for selected operations - Report
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 18
GEOFAR - Analysis
Overview on selected geothermal projects
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 19
GEOFAR - Analysis
Case studies - Conclusion
� The diversity of geothermal operations across Europe is due to the needs and depends on the geothermal resources available. The resources available and their properties play a major role on the investment costs of the project.
� New projects are currently being developed all across Europe. This is indispensable to meet target concerning development of geothermal energy, expected to take part in the future energy mix.
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 20
GEOFAR - Analysis
Analysis
� The GEOFAR consortium analysed
- innovative geothermal application to underline the multiple possibilities
of use of geothermal energy and the potential and emerging
technologies that could in the future boost the development of
geothermal energy to meet the set targets. - Output: Innovative geothermal technologies - Factsheet
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 21
GEOFAR - Analysis
Innovative geothermal applications
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 22
GEOFAR - Analysis
Innovative geothermal applications - Conclusion
� Innovative geothermal applications improve the energetic and economic profitability within the objective to develop new environment friendly solutions.
� All these new developments are ways to exploite the great potential of development of deep geothermal energy.
� The co-use of geothermal energy for the traditional electricity production and heating and cooling as well as for innovative applications will boost the profitability of geothermal energy exploitation and higher profitability will trigger new investments in geothermal energy and reduce the costs per unit.
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 23
GEOFAR - Analysis
Analysis
� The GEOFAR consortium analysed
- 44 financial instruments from national, European and international level
on their potential to overcome the main financial barriers. - Output: Financial instruments for the support for the exploitation of geothermal
energy - Report
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 24
GEOFAR - Analysis
Overcoming financial barriers
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 25
GEOFAR - Analysis
Strength/weaknesses of financial instruments
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 26
GEOFAR - Analysis
Project stages tackled by financing instruments
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 27
GEOFAR - Analysis
Differences in tax reductions/excemptions
l
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 28
GEOFAR - Analysis
Feed in tariff – most common financial instrument
Feed-in Tariffs in Target Countries (c€/kWh)
0
5
10
15
20
25
30
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Italy
Spa
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Gre
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Franc
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Hun
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Slova
kia
Max
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GEOFAR - Analysis
Financial Instruments - Conclusion
� Across Europe a lack of harmonisation in financial instruments is visible and a European support environment is not given.
� The development of geothermal financial instruments at the European level can overcome this lack.
� A European solution has to solve two main aspects: the lack of financing for the exploration phase and the risk of an inappropriate quality or quantity of the geothermal resource.
� The GEOFAR project has worked out an appropriate funding scheme (“GeoRIMI”) that will be installed as European solution for supporting geothermal energy projects.
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 30
GEOFAR - Analysis
Outputs
Reports and fact sheets
� Non-technical barriers and the respective situation of the geothermal energy
sector in selected countries - Report
� Case studies for selected operations - Report
� Innovative geothermal technologies - Factsheet
� Financial instruments for the support for the exploitation of geothermal
energy - Report
� All reports can be downloaded under www.geofar.eu
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 31
GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)
� GeoRiMi will follow the hereafter mentioned principles
- Support for geothermal investment focuses on the exploratory
stage and the drilling stage.
- Private investors must provide a significant part of the total
investment in both the exploratory and the drilling stage.
- Publicly-funded support to be limited in time and total amount.
- Publicly-funded support to be provided to cover exploration and
drilling risk only.
- For all other purposes publicly-funded support uses the normal
business-financing conduits.
- Regional and local public authorities must be supported in their
efforts to understand and develop geothermal resources in their
jurisdiction.
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 32
GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)
� The proposed GEOFAR Financial Scheme “GeoRiMi” will cover three instruments tackling different project stages and beneficiaries
- Instrument I proposes co-financing prefeasibility studies to be
commissioned exclusively by regional and local authorities in areas with
geothermal potential in which public awareness of that potential is
inadequate.
- Instrument II proposes extending partial guarantees to the exploratory
stage of qualified geothermal energy projects.
- Instrument III proposes extending partial guarantees to the production-
drilling stage of qualified geothermal energy sources.
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 33
GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)
� Steps to go for the implementation of GeoRiMi
- Reality check with national and international financial institutions
- Due diligence of GeoRiMi
- Preparation of an EU-framework for embedding GeoRiMi
- Planned finalisation: February 2011
Updated: 31.03.2010 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Page 34
GEOFAR
Contact
Erlangen AG
Marco Wendel
Henkestraße 91
91052 Erlangen
Germany
Tel: 0049 – 9131 – 530 280 1
Fax: 0049 – 9131 – 530 13 92
E-Mail: [email protected] The sole responsibility for the content of this presentation
lies with the authors. It does not necessarily reflect the
opinion of the European Communities. The European
Commission is not responsible for any use that may be
made of the information contained therein.