Enel Green Power. EGP Geothermal Experience in Latin America. Status and Lessons Learnt

Transcription

1 Enel Green Power EGP Geothermal Experience in Latin America. Status and Lessons Learnt IASS Workshop Renewable Energy Perspectives in Latin America Carlo Zorzoli Head of Business Development Latin America October 1 st, 2012

2 Enel Green Power International footprint as of December 31st, 2011 Operation 7,079 MW Generation 22,480 GWh Operation 3,583 MW Construction 1,913 MW Generation12,584 GWh Construction Operation Generation Construction 386 MW 1,010 MW 2,921 GWh 681 MW Installed capacity Operation 2,486 MW 2,540 MW Hydro Generation 6,975 GWh EGP presence in 16 countries Construction 3,541 MW Wind 846 MW 769 MW Geothermal (*) 101 MW Solar MW Other (*) Not including strategic participation in LaGeo (204 MW installed capacity in El Salvador

3 Market scenario: Technology Global Renewables Installed Capacity GW ( ) CAGR: +5.0% YoY: +6.8% YoY: +8.5% CAGR: +7.3% CAGR: +5.9% TOTAL 792 1,230 1,313 1,425 2, Geo Biomass CSP ,005 1,034 1, PV Wind Off. Wind On. Hydro 2030 Ø 250 bn of investments in over 110GW of new renewable capacity in 2011 Ø Solar PV plants accounted for 45%, wind for 25% of global investments in 2011 Source: Enerdata, WEO 2011 (World Energy Outlook published annually by the International Energy Agency), EER (Emerging Energy Research), GWEC (Global Wind Energy Council), EWEA (European Wind Energy Association), EPIA (European Photovoltaic Industry Association), NREAPs (National Renewable Energy Action Plans), REN 21, National targets, EGP estimates

4 Geothermal value chain Enel Green Power Project Development/ Finance Resource Confirmation Exploration & Drilling Plant design/ construction Plant operation R&D Land/Concessions Interconnection Low Enthalpy Permitting PPAs (?) Drilling target identification Reservoir evaluation Vertical and deviated wells Flow testing Design Procurement Construction Optimized georesource management (reservoir and power plant) for sustainable exploitation Hybrid system Plant improvement Acid gas components abatement Production wells drilling Standardization 4

5 The Italian Larderello example Italy is the only country to generate geothermal electricity until 1958, date of the New Zeland s Wairakey power plant startup Innovative technics: Deep drilling m Reinjection / Injection Wells stimulation Steady generation increase 5

6 The US Geysers example Source: FIFTY YEARS OF POWER GENERATION AT THE GEYSERS GEOTHERMALFIELD, CALIFORNIA THE LESSONS LEARNED Subir k. Sanyal, Steven l. Enedy Thirty-Sixth Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 31 - February 2,

7 Geothermal in LatAm Significant potential across the region Significant installed capacity in Mexico and selected Central American countries Lack of capacity in South America despite significant development activities in Chile and Peru and, to a lesser extent in Ecuador and Colombia Source: IGA 7

8 Chile Cumulative number of concessions granted Exploitation Exploration Over 70 concessions granted Average concession extension: 430 km 2 (exploration) 50 km 2 (exploitation) Total concessions area: ~ 31,000 km An outstanding number of concessions granted in the last few years 8

9 Chile Cumulative number of concessionaires Number of deep commercial size wells Number of concessionaires increases Just few (2) of them drilled deep commercial size wells Only 7 deep commercial size wells drilled to date in just 3 exploitation concessions 5 out of 7 drilled by EGP Slim holes drilled to date 15 Out of 11 concessionaires, just 2 of them have actually drilled commercial size wells in order to confirm feasibility of the resource, the so called Exploration & Drilling phase 9

10 Chile 1 potential project, three concessionaires Despite an important number of concessions awarded, the way they have been defined does create potential conflicts and paves the way for a repetition of the tragedy of the commons 10

11 EGP Geo program Chile: status (I) Deep exploration: two projects 1. Cerro Pabellón Drilled four exploratory wells è Resource confirmed. Environmental permit for power plant granted Environmental permit for interconnection line on going. 2. El Zoquete Drilled one exploratory deep well in 2009 with great results. Project suspended by the authorities following an accident at reinjection Well 10. A subsequent investigation accredited EGP with having resolved the issue correctly and with not having damaged either the environment or the local geysers. Development still on hold due to expected permitting problems. 11

12 EGP in Chile: Pioneer in Geothermal exploration A new industry for the country Developing a sustainable local market for geothermal supplies Principle materials & services Wellheads Present Sourcing Being an industry PIONEER involves at the beginning higher costs and longer time. Casing Casing accessoriess Perforation equipment in a climatic & logistical challenge >350km from Antofagasta 4500 m a.s.l. <.01cm rain/yr. Daily Temp.: -10 to 35 o C Future Sourcing 12

13 El Salvador LaGeo Strategic Investor 2002 EGP awarded an international public tender to select the strategic investor in El Salvador state owned geothermal generator LaGeo thanks to EGP involvement in LaGeo management and know-how and best practices transfers La Geo sees an improved performance 2007 EGP delivers the Berlin III 44MW unit in exchange of shares in LaGeo 2008 INE/CEL does not recognize EGP right to subscribe capitalk increases in LaGeo International arbitration 2011 EGP wins arbitration, INE/CEL still does not comply pending appeal Production Installed capacity GWh 150MW ,4TWh 204MW 13

14 How to accelerate geothermal development q Why - Market fails to price geothermal benefits - Market tends to uniform capacity expansion q How - Appropriate mix of supporting schemes - Not just a matter of how much but predictability, stability, ease of permitting process, efficiency of public administration, risk mitigation q Who - Energy mix is a strategic long term decision that should be set at national level and have bypartisan support - Initial support by the state helps the industry to take-off - Private sector more efficient in implementing the national strategy, letting market forces work An appropriate regulatory framework and support policies can promote geothermal energy in an effective way and with long term benefits 14

15 Concrete measures to accelerate geothermal development RISK MITIGATION/ACTIONS Long term remuneration Permitting Concessions Selection of concessionaires Support schemes Facilitate long term PPAs to support upfront investments. Government needs not to be the offtaker, but rules shall be in place to allow proper diversification of energy mix (e.g. tenders for technologies, quota for technology, etc.) Simpler process, strategic EIA to permit a long term plan of development of geothermal fields with flexibility in lay-out and size in order to take into account information gathered during drilling phase Increase size of concessions in order to have one concessionaire for possible reservoir More stringent selection criteria, based on actual MW developed and operated Grants for the first projects in order to start a new industry Risk sharing mechanisms, for instance via insurance for dry wells during construction phase Infrastructure public funding (roads, interconnection lines) 15

16 Enel Green Power Thank You! Carlo Zorzoli Head of Business Development Latin America Enel Green Power S.p.A. 16