IEA Geothermal Energy Annual Report 2005

Transcription

1 IEA Geothermal Energy Annual Report 2005 International Energy Agency Implementing Agreement for Cooperation in Geothermal Research and Technology November 2006

2 CONTENTS Page MESSAGE FROM THE CHAIR... 1 I. EXECUTIVE SUMMARY... 2 Introduction... 2 The IEA-GIA- Its Mission and Objectives... 4 Collaborative Activities... 6 National Activities... 8 Plans for 2006 GIA... 9 References... 9 II. IEA GEOTHERMAL RESEARCH & TECHNOLOGY PROGRAMME The Implementing Agreement Annex I Environmental Impacts of Geothermal Energy Development Annex III Enhanced Geothermal Systems Annex IV Deep Geothermal Resources Annex VII Advanced Geothermal Drilling Technologies Annex VIII Direct Use of Geothermal Energy III. NATIONAL ACTIVITIES Synopsis of National Activities Australia European Community Germany Iceland Italy Japan Republic of Korea Mexico New Zealand Switzerland United States of America APPENDICES A. Members and Observers at 14 th IEA-GIA Executive Committee Meeting, Zürich, Switzerland B. IEA Geothermal Implementing Agreement Executive Committee IEA-GIA Website: Cover Photograph: Well Habanero 2 Steam Separator, April 2005, Cooper Basin, Australia. The well is flowing at 12 kg/sec with a wellhead temperature of 160 o C. During testing in May 2006, the well flowed up to 25 kg/sec with a wellhead temperature of 210 o C at maximum output. (Photo by Ralph Weidler of Q-Con GmbH; courtesy of Geodynamics Limited). GIA 2005 Annual Report i

3 Message from the Chair During the year 2005, the GIA continued to be involved first-hand with advances on some of the most cutting-edge geothermal technology. In Australia, Geodynamics Limited, in its Cooper Basin project, performed a very convincing test on the Habanero 2 well, which produced 210 o C steam from an engineered reservoir at a depth of 4,300 meters, in an area not associated with a volcanic center. In Alsace, France, the Soultz-sous-Forêts project completed a circulation test with one injection well and two producing wells, from an engineered reservoir at a depth of about 5,000 meters. The initiative from GIA to begin a research program to address the issue of man-induced microearthquakes, particularly in connection with the development of Enhanced Geothermal Systems and other geothermal operations such as supplementary injection (e.g. The Geysers), has received an outstanding response from academia, industry and also from representatives of communities affected by these phenomena. During 2005, Annex I of the GIA convened two international induced seismicity workshops that attracted significant participation. One was organized in conjunction with the 30 th Stanford University Workshop on Reservoir Engineering in Palo Alto, California, U.S.A, and held in February 2005; the other was held in association with the GRC 2005 Annual Meeting in Reno, Nevada, U.S.A., in September It is expected that by 2006 the GIA will produce a white paper which will shed considerable light on the root causes and mechanisms of induced microearthquakes, with hazard assessment methodologies and strategies for minimizing the size of these events. Every five years the global community of geothermal professionals organizes a meeting where the world s advances in technology development and deployment are reviewed. Every geothermal organization adjusts its plans around this preeminent event, and the IEA-GIA was no exception in The 13 th IEA-GIA Executive Committee Meeting was held in the city of Antalya, Turkey, a few days before the 2005 World Geothermal Congress. Our organization had an important participation in this event, with over 40 papers and posters presented in different sessions and with the sponsorship of an exhibition booth where information about GIA and about the International Energy Agency was distributed, and where many useful discussions were held. I am convinced that this effort was responsible for the subsequent membership of several Sponsors and will lead to the future membership of new participating countries. The GIA saw its membership grow in 2005, with the Republic of Korea joining and the renewed commitment from Australia to continue its participation. By the end of the year, the membership in the GIA stood at ten countries: Australia, Germany, Iceland, Italy, Japan, Mexico, New Zealand, the Republic of Korea, Switzerland and the U.S.A., and the European Commission. There are good signs that membership will grow even further in 2006, as the GIA moves toward the end of its second five-year term of operation and considers its extension for a third term. David Nieva Chair, IEA-GIA Executive Committee GIA 2005 Annual Report 1

4 Executive Summary INTRODUCTION In 2005, the IEA Geothermal Implementing Agreement continued its successful efforts to support and advance the worldwide use of geothermal energy through international collaborative activities. This 2005 Annual Report describes these activities and the major achievements of the Participants in IEA Geothermal for the year. The current status of the Member Countries geothermal energy policies, uses, market situation, economics, research activities, education and international activities is also discussed. This Executive Summary begins with a brief introduction to the world s current energy situation and the part that geothermal resources can potentially play in it, in order to set the context in which the IEA-GIA operates. It includes a very brief description of the GIA and a synopsis of the information described in detail in the Annex and Member Country reports provided in Chapters 2-6, and 8-18, respectively. The contributions and highlights of the GIA Member Countries activities for 2005 are described, and the major achievements of the GIA s research activities are reviewed. Finally, the GIA s plans for 2006 are outlined. Geothermal Energy in the World Energy Scene The accelerating demand for energy worldwide and the increasing awareness of global warming issues have led to a growing worldwide desire to use clean and renewable energy sources. Providing affordable, clean energy to meet these rapidly expanding needs is an enormous challenge, and geothermal energy can be a very significant part of the solution. In 2004, the worldwide total primary energy use was estimated to be about 463 EJ/y (IEA, 2006). Current estimates indicate that economic exploitation of geothermal resources could provide about 150 EJ/y for electricity generation and 350 EJ/y for direct uses. Consequently, geothermal has the potential to make a considerable contribution towards meeting the world s current and future energy needs. Geothermal energy also has characteristics which make it extremely valuable for both electricity generation and direct heat use: extensive global distribution, environmentally friendly, independent of season, immune from weather effects, indigenous nature, contributes to development of diversified power, effective for distributed application and can provide sustainable development. Though geothermal usually operates as a baseload provider of electricity with load factors typically well above 90%, it can also operate in a load-following capacity, albeit at lesser efficiency. Status of Worldwide Geothermal Energy in 2005 At the start of 2005, 24 countries worldwide were producing electricity from geothermal resources, with a total installed capacity of 8,900 MW e and electricity generation of 56,800 GWh (Bertani, 2005) (Table ES1). Over the past 25 years, geothermal installed capacity has increased by a factor of about 2.3, at a very steady rate of about 200 MW/y; 11.6%, or about 2.3%/y, during the past 5 years. Electricity generation has grown by 50% since 1995; 15% in the past 5 years, averaging 3.1%/y growth (ibid.) (Table ES2, Figure ES1). Geothermal energy provides a major contribution to the national generation of many countries, with six countries now obtaining more than 15% of their electricity from geothermal (Table ES1). In 2005, the average contribution to national installed capacity for the 18 countries with non-negligible installation/generation was 8.4%, the GIA 2005 Annual Report 2

5 corresponding average contribution to national generation being about 9.2%. The 2005 geothermal generation resulted in a savings of about 14.4 Mtoe and reduced CO 2 emissions by 46.4 Mt. Of interest when considering differences among the various renewable energy resources is a contribution efficiency that renewable resources can make to power supply, i.e. the ratio of the energy generated to the installed (or operating) capacity, which is 6.4 GWh/MW e for geothermal [2005], compared to hydro 3.63 GWh/MW e [2004], solid biomass 5.56 GWh/MW e [2004], solar PV GWh/MW e [2004] and wind 1.9 GWh/MW e [2005] (IEA 2006). Table ES1. Worldwide geothermal power installed capacity and electricity generation at the beginning of 2005 (from Bertani, 2005). Country Installed Capacity [MW] Annual Energy Produced [GWh/y] % of National Capacity % of National Energy Australia*.2.5 Negligible Negligible Austria Negligible Negligible China- Tibet Costa Rica 163 1, El Salvador Ethiopia 7 N/a 1 n/a France Guadeloupe Island Germany* Negligible Negligible Guatemala Iceland* 202 1, Indonesia 797 6, Italy* 790 5, Japan* 535 3, Kenya 127 1, Mexico* 953 6, New Zealand* 435 2, Nicaragua Papua New Guinea Lihir Island n/a Philippines 1,931 9, Portugal San Miguel Island n/a Russia Negligible Negligible Thailand Negligible Negligible Turkey Negligible Negligible USA* 2,534 17, Total 8,902 56, ** 9.2** * GIA Member Countries; ** average values excluding negligible contributions. As of May 2005, 72 countries were utilizing geothermal energy for direct use applications, including: space, greenhouse and aquaculture pond heating; agricultural drying; industrial uses; bathing and swimming; cooling; and snow melting. The total installed capacity was about 28,270 MW t, and the thermal energy usage 273,372 TJ/y or 75,940 GWh/y (Lund et. al, 2005) (Table ES3). In 2005, over 50% of direct use installed capacity was contributed by geothermal heat GIA 2005 Annual Report 3

6 pumps. Direct use installed capacity has nearly doubled every 5 years since 1995 and energy use has increased by a factor of almost 2.5 since The 2005 use is equivalent to an annual savings of about 25.4 Mtoe in fuel oil and 81.3 Mt in CO 2 emissions (ibid.). Table ES2. Installed geothermal capacity ( ) and electricity generation ( ) (data from Bertani, 2005). Year Geothermal Installed Generating Capacity (MW e ) Increase Over Previous Five-Year Period MW e (Percent) Electricity Generation GWh/y Increase Over Previous Five-Year Period GWh/y (Percent) 1,300 3,887 4,764 5,832 6,798 7,974 8,902-2,587 (99) 877 (22.6) 1,068 (22.42) 966 (16.6) 1,176 (17.3) 928 (11.6) ,744 49,261 56, ,517 (30.5) 7,570 (15.4) Installed Capacity (MWe) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Worldwide Geothermal Installed Capacity y = x Data for trendline: Year Figure ES1. Worldwide geothermal installed capacity for the period THE IEA-GIA- ITS MISSION AND OBJECTIVES The IEA-GIA provides a versatile framework for extensive international cooperation in geothermal R&D, with its overall mission being: to advance and support the use of geothermal energy on a worldwide scale by overcoming barriers to its development. National geothermal programmes are brought together with the aim of building specific expertise and generating synergies by establishing direct cooperative links among geothermal experts in the participating countries. GIA activities are directed principally towards the coordination of the ongoing national GIA 2005 Annual Report 4

7 activities of the participating countries. New activities are also initiated and implemented when needs are established. Table ES3. Worldwide direct use categories and their development (from Lund et al., 2005). Category Capacity (MW t ) Utilization (TJ) Geothermal heat pumps 15,384 5,275 1,854 87,503 23,275 14,617 Space heating 4,366 3,263 2,579 55,256 42,926 38,230 Greenhouse heating 1,404 1,246 1,085 20,661 17,864 15,742 Aquaculture pond heating ,097 10,976 11,733 13,493 Agricultural drying ,013 1,038 1,124 Industrial uses ,868 10,220 10,120 Bathing and swimming 5,401 3,957 1,085 83,018 79,546 15,742 Cooling/snow melting ,032 1,063 1,124 Others ,045 3,034 2,249 Total 28,269 15,145 8, , , ,441 The GIA s official scope of activities include: to conduct international collaborative efforts to compile and exchange improved information on worldwide geothermal energy research and development concerning existing and potential technologies and practices; to develop improved technologies for geothermal energy utilization; and to improve the understanding of the environmental benefits of geothermal energy and methods to avoid or ameliorate its environmental drawbacks. Objectives are specifically focused to: expand R&D collaboration, increase the number of participants, increase outreach to non-member countries with large geothermal energy potential; evaluate market stimulation mechanisms, improve dissemination of information about geothermal energy and use the IEA s reputation to help leverage limited R&D funding. The project activities, or tasks, are defined and organized in Annexes. Participants must take part in at least one Annex. See Table 1.2 in Chapter 1 for the involvement of the participants in the Annexes. During the current term of the GIA, the Annexes have operated under the task-sharing mode of financing (participants allocate specified resources and personnel to conduct their portion of the work at their own expense), as was the case for the first term. The actual amount of work conducted under the auspices of the GIA has not been quantified, though it is estimated that most countries have an involvement amounting to one to several man-year(s). The GIA Secretariat was established in March 2003 to provide the ExCo with administrative and other assistance. It is funded through cost-sharing, whereby all Members contribute to a Common Fund according to the number of shares they have been allocated was the GIA s next-to-last year of operation in its second 5-year term, which ends on 31 March The major successes of GIA s activities during this term to date are very encouraging, and the GIA is now considering applying to continue for a third term. GIA 2005 Annual Report 5

8 COLLABORATIVE ACTIVITIES The Annexes In 2005, the participants in the IEA-GIA worked on five broad research tasks, specified in the following Annexes: Annexes I- Environmental Impacts of Geothermal Energy Development. Annex III- Enhanced Geothermal Systems. Annex IV- Deep Geothermal Resources. Annex VII- Advanced Geothermal Drilling Techniques. Annex VIII Direct Use of Geothermal Energy. Annexes I, III and IV were part of the original GIA and have continued programmes into the current term, as has Annex VII, which was started in In addition, Annexes I, III and VII were extended by the ExCo in September 2005 for a further 4 years, to Annex VIII held its first working meeting in September 2005, and its first term of operation continues to Four additional Annexes (II, V, VI, IX) were previously drafted; with two (II and IX) subsequently closed. The possibility of initiating Annex V- Sustainability of Geothermal Energy Utilization continues to be discussed, and Annex VI- Geothermal Power Generation Cycles is still under consideration. See Table 1.1 for Annex status details. A brief description of some of the activities and major highlights for of the Annexes active in 2005 is presented below. Details are available in the Annex Reports included in Chapters 2-6. The World Geothermal Congress 2005 The World Geothermal Congress is a major international conference that is held every 5 years to demonstrate the successes of geothermal research and development, and to discuss and disseminate information on the major R&D advances that have occurred during the period. The GIA was a very active participant in the WGC 2005, held in Antalya, Turkey, on April The results of GIA Annex work were presented in over 40 papers and posters. In addition, the GIA sponsored an especially successful exhibition booth, in which 10 large posters were displayed and two audio-visual presentations operated. Many hundreds of IEA and GIA brochures and documents were distributed from the booth and discussions of the GIA s work were held with a multitude of booth visitors. Environmental Issues and Geothermal Energy Use The environmental effects of energy use are of worldwide concern. Though geothermal is usually regarded as benign, there are environmental issues associated with its utilization that must be addressed. Annex I- Environmental Impacts of Geothermal Energy Development identifies the possible environmental effects and works to devise and adopt countermeasures to avoid or minimize their impacts. Enhanced geothermal systems (EGS) are currently seen as one of the major options for accessing geothermal resources over larger areas and extending existing geothermal developments. Felt induced seismic events, generated in association with the development and operation of EGS reservoirs, have recently been identified as a potential issue. Annex I convened two international workshops on Geothermal Induced Seismicity in 2005 to advance the understanding of these events, and help design strategies and robust hazard assessment methods to address them. GIA 2005 Annual Report 6

9 Geothermal fluids normally contain small quantities of CO 2 ; consequently, it is naturally emitted from thermal areas. Annex I is investigating the development of methods for monitoring such emissions in order to quantify the long-term effects of CO 2 emission from geothermal developments. The results of some of the Annex I studies conducted in New Zealand, the Philippines and Turkey were published a second Special Issue of Geothermics journal (Hunt, 2005) devoted to environmental issues pertaining to geothermal development. Artificial Stimulation of Geothermal Resources Huge volumes of high temperature, water-poor, rock are widespread in the world. In order to access and use the vast amounts of geothermal energy contained in them, Annex III- Enhanced Geothermal Systems (EGS) is investigating the development of new and improved technologies for artificially stimulating these resources to enable commercial heat extraction for electricity and co-generation. These techniques can also be applied to increase energy production at existing geothermal developments. The successful development of EGS is currently one of the major challenges facing the geothermal community. Several different investigations have been conducted in the pursuit of this energy source for more than 30 years. Annex III has now collected much of the information obtained during these investigations and produced a Project Management Decision Assistant (PMDA) handbook. The PMDA, which is now available, is a classifier that defines the data needed for and helps guide the developer through, each phase of an EGS power development, and it includes an overview of former and current EGS projects, a bibliography and a list of suppliers. In 2005, EGS projects involving Annex III were being pursued in Australia, Germany, France, Switzerland and the USA. We now appear to be on the verge of success at Soultz-sous-Forêts (Alsace, France) where a joint international EC effort, involving Annex III, is being conducted. Three wells have been drilled to 5,000 m, and circulation and tracer tests conducted during 2005 show the first two wells have good connection, though the third well requires further stimulation. The construction of the first stage pilot plant is expected in Successful circulation tests have also been obtained at the Cooper Basin (Australia) EGS project, which will shortly be seeking commitment for construction of a demonstration power plant. Deep Geothermal Resources Extend Resource Base Temperatures of geothermal resources increase with depth, so being able to access their deeper realms can potentially extend an existing development s production life, generate more electricity more efficiently, and even allow development of the generally lower temperature geothermal resources available over much larger regions of the world. However, there is a large variety of challenges associated with development of deep resources, which range from problems with locating and modelling them, technical difficulties in drilling to such depths, problems with producing from low-permeability zones, and complications arising from the chemical nature of the fluids accessed. To commercially develop deep geothermal resources, Annex IV- Deep Geothermal Resources was designed to tackle these issues. However, due to the growing overlap of Annex IV activities with those in Annexes III and VII over the past few years, Annex IV efforts have slowed considerably. Consequently, Annex IV may be redesigned when its current term of operation ends in Nevertheless, Annex IV s studies in 2005 have succeeded in showing that it is possible to extract hot (> 100 ºC) fluids from sedimentary basin formations at depths greater than 4 km at Groß Schönebeck and Horstberg (near Hannover); and work is continuing on the development of such resources. GIA 2005 Annual Report 7

10 Reducing Geothermal Drilling Costs The drilling of geothermal wells is an essential and expensive part of geothermal exploration, development and utilization. Reducing well drilling and completion costs, which can account for more than half the capital cost of a geothermal power project, can have very major benefits, and Annex VII- Advanced Geothermal Drilling Technology is working to identify and promote the ways and means to do so. An important step towards helping reduce costs is in progress with Annex VII having completed a draft outline for a best practices geothermal drilling handbook in Annex VII has also successfully conducted collaborative activities such as the Life Cycle Considerations for Geothermal Wells workshop held in New Zealand and the Soultz EGS project presentation and discussion event conducted in the USA. Using Geothermal Heat Geothermal energy can be used directly as heat for a multitude of applications such as: building and district heating; industrial process heating; greenhouse heating; and temperature control for fish farming, bathing and swimming; and snow melting. In fact, the earth s very shallowest depths (< 100 m depth) can be utilized for home and building heating by employing geothermal heat pumps- practically anywhere on earth. As mentioned above, the growth in geothermal direct use has been outstanding, almost doubling every 5 years since 1995, and the scope for its continued growth is vast. Though many direct use applications are well developed and economically viable, there remain challenges resulting from implementation difficulties and unfavourable economics. Annex VIII- Direct Use of Geothermal Resources was initiated to address all aspects of the direct use technology, with emphasis on improving implementation, reducing costs and enhancing use. The kick-off meeting for this Annex was held in association with the 14 th ExCo Meeting held in Zürich, Switzerland, in September Efforts were begun with the introduction of physical and chemical data for the thermal manifestations of the participating countries; and specific projects pertaining to their evaluation and comparison were assigned. NATIONAL ACTIVITIES The national geothermal programmes of the countries participating in the GIA provide the foundation for the cooperative IEA geothermal activities. These programmes are directed toward the exploration, development and utilization of geothermal resources. A synopsis of the country activities is included in Chapter 7, with a comprehensive description of the current status of geothermal activities for each of the participating countries and the EC provided in Chapters During 2005, Contracting Parties from ten countries and the European Commission (EC) participated in the IEA-GIA. The member countries were: Australia, Germany, Iceland, Italy, Japan, Mexico, New Zealand, Switzerland and the United States, with the Republic of Korea becoming the tenth Contracting Party in September Contributions to Power Generation and Direct Use In 2005, the 8 IEA-GIA Member Countries that have geothermal generation contributed 5,211 MW e, or about 59%, of the global geothermal installed capacity and 34,523 GWh/y, or about 61% of the generation (Tables ES4 and 7.1). The United States was the major producer, generating about 14,400 GWh/y, with Italy and Mexico both generating over 5 GWh/y. The percent of national generation provided by geothermal in the 6 IEA-GIA Member Countries with nonnegligible generation ranged from 0.4% for Japan, to 17% for Iceland, with an average of 4.8%. Note that the differences between the data presented here and that in Bertani (2005) (especially the large difference for the USA) may be ascribed to the different time periods they represent. All 10 IEA-GIA member countries contributed to direct use applications, with a total installed capacity well in excess of 4,092 MW t, or > 15% of the worldwide installed capacity. The thermal energy used GIA 2005 Annual Report 8

11 was greater than 69,015 TJ/y (25,806 GWh/y), or about 25% of the worldwide total (Tables ES4 and 7.2). Though the smallest population GIA Member Country, Iceland was well in the lead, using about 26,000 TJ/y. As a non-high enthalpy geothermal country, Switzerland also had an extremely good showing, with an installed capacity of about 609 MW t and use of 4,773 TJ/y. PLANS FOR 2006 The GIA foresees a very busy 2006-year ahead of it. Research activities will proceed with strength, with Annex I- Environmental Impacts of Geothermal Development, Annex III- Enhanced Geothermal Systems and Annex VII- Advanced Geothermal Drilling having had their terms extended for another four years; and Annex VIII- Direct Use of Geothermal Energy beginning its initial work with comprehensive national data collection and review. Table ES4. Total geothermal installed capacity and electricity generation in GIA Member Countries in Country GIA Member Countries Electrical Installed Capacity [MW] Annual Energy Generated [GWh/y] % of National Capacity % of National Energy Installed Thermal Power (MW t ) Annual Energy Used (TJ/y) 5,211 34, * 4.8* > 4,092 > 69,015 Worldwide Total** 8,902 56, , ,372 GIA % of Worldwide Total > 15 > 25 * Average % of 8 GIA Member Countries with non-negligible generation. ** Worldwide totals from Table ES1 (Bertani, 2005). An emphasis will continue on improving and enhancing the visibility of the GIA s activities and achievements and on promoting geothermal energy as a clean and economic global energy resource. Participation at IEA seminars and other international renewable energy and geothermal conferences is already planned. The GIA aims to pursue its efforts to grow membership, especially from the geothermal industry sector, where it is expected that new and different perspectives and ideas can be contributed. In March 2007, the GIA s second 5-year term ends, and the Executive Committee is considering applying for a third term of operation. The associated activities, including the production of the End-of-Term Report and the development of a new Strategic Plan, will definitely make 2006 a very busy year. REFERENCES Bertani, R. (2005) Worldwide geothermal generation : state of the art. Proc. World Geothermal Congress 2005, Antalya, Turkey, April Hunt, T.M. (ed.) (2005) Six Annex I Environmental Papers. Geothermics, vol. 34, No. 2, April IEA (2006) IEA Renewables Information Paris, France, 238 p. Lund, J.W., Freeston, D.H. and Boyd, T.L. (2005) Direct application of geothermal energy: 2005 worldwide review. Geothermics, vol. 34, GIA 2005 Annual Report 9

12 IEA GEOTHERMAL R&D PROGRAMME Chapter 1 The Implementing Agreement 1.0 The IEA Geothermal Research and Technology Programme The IEA s involvement in geothermal energy began in 1978, and following completion of the two 3-year long studies in 1981, there was a hiatus in IEA geothermal activities until 1995, when the IEA Secretariat in Paris initiated an effort to revive them. An ad-hoc meeting was convened in Florence, Italy, in association with the World Geothermal Congress 95, where representatives of 14 countries indicated an interest in international collaboration under the auspices of the IEA. Subsequently, the legal text and three technical Annexes of the IEA Implementing Agreement for a Cooperative Programme on Geothermal Research and Technology, or Geothermal Implementing Agreement (GIA), were formulated with considerable support from the IEA Secretariat. The GIA officially went into effect on 7 March 1997, with an initial term of five years. In November 2001, the Renewable Energy Working Party (REWP) and the IEA Committee on Energy Research and Technology (CERT) approved the extension of the GIA for a second 5-year term, to 31 March The scope of the GIA s activities was defined in Article 1 of the Implementing Agreement at the time of its formation. It continues to provide fundamental direction for the organization and consists of international scientific collaborative efforts to: Compile and exchange improved information on worldwide geothermal energy research and development concerning existing and potential technologies and practices. Develop improved technologies for geothermal energy utilization. Improve the understanding of the environmental benefits of geothermal energy and methods to avoid or ameliorate its environmental drawbacks. The GIA provides an important and versatile framework for comprehensive international cooperation in geothermal R&D. It connects national geothermal programmes for exploration, development and utilization of geothermal resources, with the focus on assembling specific expertise and enhancing effectiveness by creating direct cooperative links among geothermal experts in the participating countries. The GIA s current activities are directed mainly towards coordination of the participants ongoing national programmes, and include a range of geothermal topics from power generation and direct use of heat to leading-edge technologies applicable to deep resources and enhanced geothermal systems (EGS). New activities are also encouraged and implemented when the needs are established. As of December 2005, Contracting Parties from ten countries and the European Commission (EC) participated in the IEA-GIA. The member countries were: Australia, Germany, Iceland, Italy, Japan, Mexico, New Zealand, Switzerland and the United States, with the Republic of Korea becoming the tenth Contracting Party in September GIA 2005 Annual Report 10

13 1.1 Strategy and Objectives Geothermal resources are estimated to make-up two-thirds, or about 5,000 EJ/y, of the world s renewable energy base (WEA, 2000). Their vast and ubiquitous nature provide a capacity for contributing significantly towards meeting the rapidly growing global energy demand well into the future. The GIA s second term Strategic Plan acknowledged this capability, as well as the challenges associated with meeting the IEA World Energy Outlook 2002 forecasted growth of 4%/y in global geothermal electricity production for , the desire to increase worldwide geothermal direct use, and the growing acceptance and consequences of the Kyoto Protocol. It was also clear that geothermal energy must become more cost-effective in the market place and overcome the difficulties associated with characterizing the resource prior to major financial commitment by investors. Barriers to market penetration arising from the public s general lack of awareness and experience with geothermal technologies, and the institutional barriers linked to the lack of experience with planning, regulation and obtaining public acceptance must also be surmounted. Though geothermal energy has significant positive environmental benefits on the global scale, local impacts must be clearly identified and dealt with in an open manner. To meet these challenges, the GIA s second-term Strategic Plan set as its mission: to advance and support the use of geothermal energy on a worldwide scale by overcoming barriers to its development. To accomplish this, the following objectives were defined: Expand R&D collaboration: Geothermal energy technology development is progressing and the Executive Committee will implement additional new annexes where new areas of collaboration could be useful. Table 1.1 contains a summary of current collaborative efforts under the GIA. Increase the number of participants: Many countries with significant geothermal resources are not yet Members of the GIA. Several of them could make important contributions to the GIA and assist with expanding worldwide geothermal development. The GIA encourages new membership and invites interested parties to contact the ExCo or Secretariat for information about joining. Increase outreach to non-member countries with large geothermal energy potential: New regions are opening up as international energy markets expand, and the GIA will embrace this opportunity to invite these non-member countries to participate in its programmes and explore ways to help accelerate development of their geothermal resources. Evaluate market stimulation mechanisms: The ExCo realized that efforts to expand geothermal heat and power markets in both OECD and non-oecd countries require market stimulation to create an expanded market for geothermal energy. (Note: though the GIA ExCo developed a draft Geothermal Market Acceleration Annex (Annex IX), it was closed in October 2004 before being initiated, when the IEA announced it would be establishing the Renewable Energy Technology Deployment (RETD) Implementing Agreement.) Improve dissemination of information about geothermal energy: The ExCo has recognized that more emphasis is needed on the open distribution of high quality and attractive information products in order to promote the use of geothermal energy. The GIA is actively pursuing this issue, and as a part of its effort, is continuing to develop its website, annual reports, brochures, etc. in order to provide information in a more understandable and appealing manner. Leverage limited R&D funding: The R&D budgets of many of the GIA participants have been declining, and the need for cost-shared collaboration is increasing. An affiliation with the IEA brings added value to activities rather than funding. The IEA s reputation for GIA 2005 Annual Report 11

14 technical competence and unbiased excellence can provide leverage to obtain support from industry and other multilateral organizations and financial institutions. Table 1.1. Annex Title, Operating Agent and Status of GIA Annexes at December Annex Number I Title Operating Agent (OA) Task Leader (TL); Affiliation; Contact Participants Environmental Impacts of Geothermal Development OA: GNS Science (GNS), New Zealand TL: Chris Bromley; GNS, New Zealand; c.bromley@gns.cri.nz Participants: EC, Iceland, Italy, Japan, Mexico, New Zealand, USA Status Active since 1997, Continuing through 2009 II Shallow Geothermal Resources Closed III IV Enhanced Geothermal Systems OA: New Energy & Industrial Technology Development Organization (NEDO), Japan TL: I. Matsunaga; AIST, Japan; matsunaga-isao@aist.go.jp Participants: Australia, EC, Germany, Italy, Japan, Switzerland, USA Deep Geothermal Resources OA: Forschungszentrum Jülich (F-J), Germany TL: Dieter Rathjen; F-J, Germany; d.rathjen@fz-juelich.de Participants: Australia, Germany, Italy, Mexico, New Zealand, USA Active since 1997, Continuing through 2009 Active since 1997, Continuing through 2006 V Sustainability of Geothermal Energy Utilization Draft VI Geothermal Power Generation Cycles Draft VII VIII Advanced Geothermal Drilling Techniques OA: Sandia National Laboratories, United States TL: Steven Bauer; Sandia National Laboratories, USA; sjbauer@sandia.gov Participants: EC, Iceland, Mexico, New Zealand, USA Direct Use of Geothermal Energy OA: The Federation of Icelandic Energy and Waterworks, Iceland TL: Einar Gunnlaugsson; The Federation of Icelandic Energy and Waterworks, Iceland; einar.gunnlaugsson@or.is Participants: Iceland, Japan, New Zealand, Republic of Korea, Switzerland, USA Active since 2001, Continuing through 2009 Active since 2003, Continuing through 2007 IX Geothermal Market Acceleration Closed 1.2 Collaborative Activities The GIA s programme is implemented through the conduct of collaborative projects called tasks. After being approved by the ExCo, detailed descriptions of the tasks are appended as Annexes to the IA (Chapters 2-6). Each of these Annexes, referred to by its annex number, is managed by an Operating Agent organization within one of the Member countries. In 2005, participants worked on five broad research tasks, specified in Annexes: I- Environmental Impacts of Geothermal Energy Development; III- Enhanced Geothermal Systems, IV- Deep Geothermal Resources; VII- Advanced Geothermal Drilling Techniques; and Annex VIII- Direct Use of Geothermal Energy. Annexes I, III and IV were part of the original GIA and have continued programmes into the second term, as has Annex VII, which was started in In addition, Annexes I, III and VII GIA 2005 Annual Report 12

15 were extended by the ExCo in September 2005 for further 4 years, to Annex VIII held its first working meeting in September 2005 and will continue through at least Four additional Annexes were previously drafted, though two of these, Annexes II and IX, were subsequently closed. The initiation of Annex V- Sustainability of Geothermal Energy Utilization was discussed, with further investigation continuing. A list of Annexes, Operating Agents and note of their status as of December 2005 is provided in Table 1.1, with more complete details of objectives, results and work planned for 2006 for the active Annexes presented in the Annex Reports included in Chapters 2-6. Table 1.3 presents a brief summary for the current draft and the closed Annexes. Participants must take part in at least one Annex, with their involvement defined by activities relevant to their current research and development programmes. The tasks in each Annex are divided into Subtasks, and not all participants are necessarily active in all Subtasks of those Annexes in which they participate. The involvement of the participants in the Annexes is shown in Table 1.2. Table 1.2. Country participation, funding sources and periods of operation for the current Annexes as of December Annex I III IV VII VIII Participating Country Environmental Impacts of Geothermal Development Enhanced Geothermal Systems Deep Geothermal Resources Advanced Geothermal Drilling Techniques Direct Use of Geothermal Energy Australia G G G EC G G G Germany G OA, G Iceland G, I G OA, G Italy I I I Japan R OA, R R Mexico G G G New Zealand OA, R, I R, I I R Republic of Korea Switzerland G G USA N N OA, N U Start Date Date Current Term of Annex Continuing To End Date* Ongoing Ongoing Ongoing Ongoing Ongoing G = Government; I = Industry; R = Research Institute (government funded); N = National Laboratory (government funded); U= University; OA = Operating Agent; * = Ongoing means no fixed end date yet determined. R During the second term of the GIA, the Annexes have operated under the task-sharing mode of financing (participants allocate specified resources and personnel to conduct their portion of the work at their own expense), as was the case for the first term. The actual amount of work conducted under the auspices of the GIA has not been quantified, though it is estimated that the level of effort spent by each country on GIA activities is on the order of one to several man-years. GIA 2005 Annual Report 13

16 The GIA Secretariat was established in March 2003 to provide the ExCo with administrative and other assistance, as well as to assist with expanding its activities. It is funded through costsharing, whereby all Members contribute to a Common Fund according to the number of shares they have been allocated (see Chapter 1, Section 1.4 for details). A review of the geothermal situation and progress made by each Contracting Party is provided in Chapter 7, with details reported in individual Country Reports in Chapters More information about the GIA s activities may be obtained by contacting the GIA Secretary at: mongillom@reap.org.nz or by visiting the GIA website: Table 1.3. Annex number, name, description and status for draft and completed Annexes as of December Annex Number Title Description Status II Shallow Geothermal Resources The GIA ExCo made the decision in October 2000 to close this Annex after it reached the draft stage. Its major topic, which was associated with the application of geothermal heat pumps, is now included in Annex VIII- Direct Use of Geothermal Energy, which was initiated in September Closed V Sustainability of Geothermal Energy Utilization This proposed annex would investigate alternative scenarios for energy production from representative geothermal resources with the goals of (1) defining methods and requirements for sustaining production from these resources, and (2) of estimating the long-term economic sustainability of such production not only for representative resources but for the worldwide geothermal resource as a whole. The issue of sustainable energy production has grown in recognition and importance over the past few years. Consequently, during 2005, the GIA ExCo has been investigating the possibility of activating this Annex. Draft VI Geothermal Power Generation Cycles This proposed annex would develop scenarios as a basis for comparison of cycles, plant performance and availability, economics and environmental impact and mitigation. The output would be a database and guidelines of best practice. A draft of this Annex has been prepared, though no further consideration was given to it in The ExCo agreed that it would be implemented as soon as two or more participants decided to join. Draft IX Geothermal Market Acceleration Geothermal electricity production and direct heat use are well developed and economically viable in many parts of the world, however, there are large untapped resources in many countries. The ExCo explored ways to hasten geothermal energy development, or market acceleration, in these countries during the last few years, and decided that a more pro-active approach was needed, possibly including: identifying a few regions with high geothermal potential, collating resource assessments on a few sites and discussing with key players (government, utilities, developers, financiers, etc.) the barriers to progress in their regions. Consequently, this market acceleration Annex was drafted. In October 2004, following the IEA s decision to initiate its own market acceleration type of IA, the ExCo made the unanimous decision to close this Annex. Closed GIA 2005 Annual Report 14

17 1.3 Structure of the GIA Supervisory control of the Geothermal Research and Technology Programme is vested in the Executive Committee (ExCo), which comprises one Member and one Alternate Member designated by each Contracting Party. There is one Contracting Party for each country, which is usually a government department or agency. The ExCo meets in regular session twice each year to exchange information, discuss progress in each of the Annexes and in each of the participating countries, and plan future activities. Decisions are made by majority vote, unless otherwise specified in the IA. In 2002, the GIA ExCo decided to increase the scope of its activities. Consequently, it created a dedicated Secretariat, which began operations in March 2003 and is funded by a cost-shared Common Fund. GIA research results are disseminated through participation at international conferences and workshops, and publication in scientific and technical journals and conference proceedings (details in Chapters 2-6). In addition, information is made more widely available on the new GIA website, through promotional material produced by the GIA Secretariat, and via IEA publications and the IEA website ( In 2005, 10 countries and one international organization formally participated in this programme (Table 1.2). 1.4 The Executive Committee Officers Dr David Nieva (Mexico) served as Chairman for Dr Ladislaus Rybach (Switzerland) and Dr Allan Jelacic (USA) served as Vice-Chairs for Policy and Administration, respectively, in Membership There were several changes in the ExCo composition in The Australian Contracting Party changed from Australia National University to the Primary Industries and Resources- South Australia (PIRSA), consequently the ExCo Member and Alternate changed; Barry Goldstein replaced Doone Wyborn and Tony Hill replaced Prame Chopra. Chitoshi Akasaka replaced Yumi Kiyota as Japan s Alternate Member. The Republic of Korea joined the GIA on 22 September 2005, with the resultant appointments of Yoonho Song as the new ExCo Member and Hyoung Chan Kim as the new Alternate Member. The list of ExCo Members and Alternates for 2005 is provided in Appendix B. Meetings The ExCo held two Meetings in 2005 to discuss and review ongoing tasks and plan future activities. 13 th ExCo Meeting April 2005, Antalya, Turkey The 13 th ExCo Meeting was held on April 2005, in Antalya, Turkey, in association with the World Geothermal Congress There were 20 attendees, including eight ExCo members and two Alternate Members, six ExCo Annex Member Observers, one NEDO representative, two Korean Institute of Geoscience & Mineral Resources delegates, and the GIA Secretary. The ExCo unanimously approved the election of David Nieva as Chairman and Allan Jelacic and Ladislaus Rybach as Vice-Chairmen. The activities and progress made in each of the five active Annexes and on the national geothermal situation in the participating countries were reported on. The decline in Annex IV activities as the result of their overlap with, and loss to, Annexes III and VII GIA 2005 Annual Report 15

18 was discussed, and the decision made to continue Annex VI until it was reassessed at its term s end in The GIA s participation in the IEA REWP Seminar held in March 2005 was described. The GIA EC Member explained the problem with the EC s acceptance of the New IEA IA Framework, and indicated that it would be resolved in the next few months. The GIA s World Geothermal Congress (WGC) 2005 exhibition booth activities, including the distribution of IEA and GIA material, were discussed. The status of Australia s Membership in the GIA arising from their inability to contribute to the Common Fund, was again discussed and decisions made that: ANU was considered to have withdrawn from the GIA and the Australian Government had to be contacted to explain the situation and ask for the appointment of a different Contracting Party. There was further discussion on proposed Annex V- Sustainable Geothermal Energy Production, and it was decided to produce a GIA document on sustainability to see if enough interest could be generated to start the Annex. The issue of growing the GIA through new membership was examined and the interest in becoming GIA Members on the part of the Korean participants was encouraged. The Secretary provided a report on the operation of the Secretariat for the 2004-year and the 2005-year to 31 March; presented a work plan for the remainder of 2005; and gave an update on the Common Fund. The Secretary noted that the new GIA website was operational. Copies of the new colour brochure were distributed to the meeting participants in advance of their being made available at the GIA WGC 2005 exhibition booth. The decision was made to increase the Common Fund share cost to US$ 3,500/share/y. The IEA Secretariat report was presented and the GIA was thanked for its input to the IEA Highlights of Implementing Agreements 2005 book and for participating at the IEA REWP 47 th Meeting and the R&D Priorities Seminar held in March th ExCo Meeting22-23 September Zürich, Switzerland The 14 th ExCo Meeting was organized and hosted by Geowatt AG, Zürich, Switzerland, on September There were 17 attendees, including seven ExCo Members and three Alternates, three ExCo observers (Annex members), two invited guests, one IEA Secretariat member, and the GIA Secretary. The ExCo unanimously adopted the New IEA IA Framework, along with appropriate changes to the GIA document. It was reported that the GIA participation at the World Geothermal Congress (WGC) 2005 was very successful, with a keynote paper describing the GIA and its activities and several Annex-related papers presented. There was excellent visitor attendance at the GIA exhibition booth, where 10 posters were exhibited, many IEA and GIA documents were distributed and two GIA computer presentations were continuously operating. The Secretary reported that the IEA Geothermal Annual Report 2004 was completed and submitted to the IEA, a paper describing geothermal energy and the GIA s activities was written for a UK journal at the IEA s request. The Secretary presented the Common Fund report, and work plans for the remainder of 2005 and for 2006 were presented and unanimously accepted by the attending ExCo Members. Annex work and Country Reports were presented and reviewed. Again, the lack of participation in Annex IV was discussed, and it was pointed out that Iceland s Deep Drilling Project might be interested in participating in it when their activities are more advanced. The decision was made to continue Annex IV, but restructure it in the future. Discussion of Annex V- Sustainability of Geothermal Energy Utilization continued with the decision to produce a GIA policy statement and position paper on the topic. The Republic of Korea became a Member of the GIA on 22 September 2005; and industry membership was discussed with ORMAT s interest initiating the decision to send an official invitation to them. A representative from Poland, who is actively working on Poland s membership, attended the meeting and made a presentation on geothermal activities in Poland. A representative of the Swiss Federal Office of Energy addressed the meeting and noted his office s strong support of R&D in renewable energy. The IEA Secretariat representative presented a report; they thanked the GIA for its input into the IEA Energy Technologies at the Cutting Edge GIA 2005 Annual Report 16

19 and R&D Priorities for Renewables publications. The IEA representative notified the attendees that the new Renewable Energy Technology Deployment IA had been approved; and informed the GIA that the EC issues regarding the New IEA Framework had been resolved, thus paving the way for the GIA to accept the New Framework. The GIA was thanked for its input into IEA activities and publications, and was invited to provide material for the Beijing International Renewable Energy Conference to be held in November ExCo Publications, Conference Participation, Etc. The ExCo recognizes the importance of disseminating information on geothermal energy and promoting the GIA and its activities in order to encourage geothermal energy use as well as increase its membership. In support of these efforts, the GIA ExCo has been particularly active in The GIA had a significant presence at the World Geothermal Congress 2005 (WGC 2005), held in Antalya, Turkey. A paper entitled The IEA Geothermal Implementing Agreement Its Goals, Status, Achievements and Prospects, was a keynote address presented by the Chairman. In addition, the GIA operated a large exhibition booth for the 5-day duration of the Congress, in which 10 posters and two audio-visual presentations were shown. Much IEA and GIA literature was distributed and the GIA Secretary, many ExCo Members and Annex Leaders who manned the booth, had frequent discussions about geothermal energy and the GIA with visitors. A GIA ExCo representative also participated in the IEA Joint Seminar on Long-Term R&D Priorities held in March 2005, and material was provided to the IEA for their participation at Beijing International Renewable Energy Conference 2005 (7-8 November 2005). The new public GIA website ( which went on-line in December 2004, grew as a source for information dissemination. A 10-page GIA colour brochure was produced, with over 450 copies distributed at the WGC Several articles were written, including one at the request of the IEA for a UK Public Service journal: For Today and Tomorrow- geothermal energy is a clean, economic, sustainable global energy solution. Contributions for the IEA Energy Technologies at the Cutting Edge 2005 book and the IEA Joint Seminar on Long-Term R&D Priorities were also made. Costs of the Agreement The ExCo established a dedicated GIA Secretariat, supported by a part-time Secretary, in March The Secretary deals with the ongoing administration, assists with the management of the organization and provides a significant part of the information dissemination, including the preparation of GIA documents and publications, including the GIA Annual Reports. The expenses for running the GIA Secretariat, including the Secretary s salary and travel, and other common costs of the ExCo, are met from an Executive Committee Common Fund. This Fund is administered by a Custodian, currently the National Renewable Energy Laboratory (NREL), based in Golden, Colorado, USA. The Common Fund is supported through cost-sharing, with all GIA Participants paying an annual contribution on a fair apportionment basis in the form of assigned shares. Based on current membership, the apportionment for the GIA is shown in Table 1.4. The ExCo set, by unanimous vote, the cost per Common Fund share for 2005 at US$ 3,500/y. The addition of new members, or the withdrawal of current ones, will cause the total number of shares to vary, and may affect the share value, hence Members contributions. Contributions are made annually on a calendar year basis. The number of shares assigned to new Members is determined by the ExCo acting in unanimity. GIA 2005 Annual Report 17

20 1.5 GIA Plans for 2006 Three of the GIA s five active Annexes: Annex I- Environmental Impacts of Geothermal Development, Annex III- Enhanced Geothermal Systems and Annex VII- Advanced Geothermal Drilling Techniques, whose terms of operation ended in 2005, were extended for a further 4 years, taking their activities to With the work in these continued Annexes, and that in Annexes IV and VIII, the GIA foresees a very vigorous and full research programme in 2006 and beyond. Table 1.4. Common fund share apportionment among the GIA Members as of December Australia 2 Mexico 1 European Commission 4 New Zealand 1 Germany 4 Republic of Korea 2 Iceland 1 Switzerland 2 Italy 2 United States 4 Japan 4 ~ ~ Total = 27 shares The GIA will continue its efforts to improve and enhance the visibility of its work and results, to promote geothermal energy as an important global renewable energy resource, and to encourage its sustainable use worldwide. We recognize the importance of explaining geothermal energy, and stressing the contributions it can, and is making, especially to non-experts, particularly decision makers. The GIA will continue to pursue several contacts made at the WGC 2005 who showed interest in becoming Members of the GIA, and encourage their participation. In addition to following-up new Country contacts, the GIA will especially pursue those from industry, since they should be able to contribute new and very different perspectives and ideas for the organization s activities and development. There are plans for the GIA to participate at the 49th Meeting of the IEA Renewable Energy Working Party (6-7 April 2006) and contribute to the IEA OPEN Bulletin. The GIA also expects to complete a major revision of its Implementing Agreement in 2006, based upon its acceptance of the IEA s new IA Framework in September The GIA s second 5-year term ends on 31 March Since it is considering applying for a third term of operation, the ExCo sees 2006 as a busy year, with the production of the second-term End-of-Term Report and the development of a new GIA Strategic Plan for References WEA (2000) World Energy Assessment: energy and the challenge of sustainability. Ed. J. Goldemberg, United Nations Development Programme, UNDECOSOC, WEC, GIA 2005 Annual Report 18

21 IEA GEOTHERMAL R&D PROGRAMME Chapter 2 Annex I- Environmental Impacts of Geothermal Energy Development 2.0 Introduction Environmental effects of energy use are a worldwide concern. Geothermal is generally regarded as a benign energy source. There are, however, some environmental problems associated with its utilization. To further the use of geothermal energy, possible environmental effects need to be clearly identified, and countermeasures devised and adopted to avoid or minimize their impact. Annex I of the GIA was set up to address this. The goals of this Annex are: to encourage the sustainable development of geothermal energy resources in an economic and environmentally responsible manner; to quantify any adverse or beneficial impacts that geothermal energy development may have on the environment, and to identify ways of avoiding, remedying or mitigating such adverse effects. During 2005, six countries participated in Annex I: New Zealand, Iceland, USA, Japan, Mexico and Italy. Contributions were also received from two non-member countries: Turkey and Philippines. The Operating Agent for Annex I is GNS Science, a Crown Research Institute owned by the New Zealand Government. The Task Leader is Chris Bromley. 2.1 Subtasks of Annex I There are currently four Subtasks in this Annex Subtask A- Impacts on Natural Features (Subtask Leader: Chris Bromley, GNS Science, Wairakei, New Zealand) This Subtask focuses on documenting known impacts of geothermal developments on natural geothermal features such as geysers, hot springs and fumaroles. The aim is to provide a sound historical and international basis on which to devise methods to accurately monitor changes and avoid or mitigate the impacts of development on these geothermal features, which often have significant cultural and economic value Subtask B- Discharge and Reinjection Problems (Subtask Leaders: Trevor Hunt and Ed Mroczek, GNS Science, Wairakei, New Zealand) Work in this Subtask focuses on identifying and determining methods of overcoming the impacts of geothermal developments on other aspects of the environment. This includes the effects of gas emissions from geothermal power plants, effects of toxic chemicals in waste fluid that is discharged both into the ground and into rivers, and effects of ground subsidence. Projects examine the problems associated with disposal of waste geothermal fluids and the effects of CO 2, Hg and H 2 S gas emissions, and subsidence. GIA 2005 Annual Report 19

22 2.1.3 Subtask C- Methods of Impact Mitigation and Environmental Manual (Subtask Leader: Chris Bromley, GNS Science, Wairakei, New Zealand) The objective of the Subtask is to contribute to the future of geothermal energy development by developing an effective, standard environmental analysis process. Field management strategies that result in improved environmental outcomes will be identified and promoted based on operational experience. Successful mitigation schemes that provide developers and regulators with options for compensating unavoidable effects are also being identified, documented and promoted Subtask D- Seismic Risk from Fluid Injection into Enhanced Geothermal Systems (Subtask Co-Leaders: Ernie Majer, Lawrence Berkeley National Laboratory, Department of Energy, United States; Roy Baria and Andre Gerard, European Commission) Address the issue of the occurrence of large (felt) induced seismic events, particularly in conjunction with EGS reservoir development or subsequent extraction of heat, but also in connection with regular geothermal operations. These events have, in places, been large enough to be felt by populations living in the vicinity of current geothermal development sites. The objective is to investigate these events to obtain a better understanding of why they occur so that they can either be avoided or mitigated. Objectives are to assess and generate an appropriate source parameter model, and test the model in relation to the hydraulic injection history, temperature gradients, stress field and the tectonic/geological background. An interaction between stress modelling, rock mechanics and source parameter calculation is needed. Once the mechanism of the events is understood, the injection process, the creation of an engineered geothermal reservoir, or the extraction of heat over a prolonged period may need to be modified to reduce or eliminate the occurrence of large events. 2.2 Work Performed in General Six papers were published in a Special Environmental Issue of Geothermics Journal. (Vol 34 No2 April 2005) edited by Trevor Hunt. Several papers and posters on Environmental Aspects of Geothermal Development were presented and published by IEA-GIA Annex 1 participants at the World Geothermal Congress May 2005 in Antalya, Turkey. Convened 1 st Workshop on Geothermal Induced Seismicity (2 day) in conjunction with the Stanford Geothermal Workshop, San Francisco, in February Presented and published a paper and poster on adopting a balanced approach to geothermal environmental management at GRC 2005, Reno, Nevada, USA. Convened 2 nd Workshop on Geothermal Induced Seismicity (2 day) in conjunction with GRC 2005, Reno. Papers were presented on improved subsidence detection, modelling and mechanism identification, and arsenic removal at the annual New Zealand Geothermal Workshop in November 2005 (NZGW 2005) held in Rotorua, New Zealand. Developed longer-term R&D needs, involving research objectives for: induced seismicity, monitoring natural CO 2 and convective heat flux, classifying thermal feature vulnerability, testing mitigation and remediation methods, and developing bioremediation methods to remove toxic elements from geothermal water discharges. GIA 2005 Annual Report 20

23 Pursued collaboration between geochemical researchers in Italy, Iceland, USA and New Zealand to jointly study means of monitoring natural CO 2 emissions from thermal areas, in order to quantify the net long-term effects of geothermal development on global warming through CO 2 emissions. Annex participants took part in brief Workshops/Environmental Annex meetings in conjunction with the GIA Executive Committee Meetings in May at Antalya, and in September in Zürich, to discuss progress on the existing tasks and planning for new tasks Subtask A- Impacts on Natural Features Compared changes to thermal features due to geothermal development at various countries. Submitted commentary on appropriate geothermal policy and planning regulations designed to help regulators to manage effects on thermal features in a practical manner. Further refined methods to quantify surface heat and gas flux changes through steaming ground. Results published at WGC Subtask B- Discharge and Reinjection Problems Waste water disposal options, including groundwater disposal, deep injection, shallow injection, and chemical treatment were debated at various conferences including WGC 2005, GRC 2005, NZGW 2005 and NZ Environment Court hearings for Waikato Regional Council geothermal policy and plans. Potential causes of subsidence in geothermal fields were investigated and methods to improve predictive capabilities of subsidence models were further investigated and presented at NZGW Subtask C- Methods of Impact Mitigation Prepared a draft position paper for GIA Executive Committee consideration titled The Benefits of a Balanced Approach to Geothermal Environmental Management Subtask D- Seismic Risk from Fluid Injection into EGS Commenced multi-party collaboration (mainly EU-France, USA, and New Zealand) to advance understanding of induced seismicity mechanisms, provide strategies, and robust hazard assessment methods to address the issue of large induced earthquakes from injection/production activities. Convened 2 workshops in 2005 at Stanford and Reno, and organised a 3 rd workshop for Stanford in January Highlights of Annex I Programme Work for 2005 Two Induced Seismicity workshops convened (30 to 40 participants from USA, France, Germany, and New Zealand). Geothermics special environmental issue published. Environmental issues addressed at three international workshops WGC 2005, GRC 2005, NZGW Balanced environmental policy position paper prepared. GIA 2005 Annual Report 21

24 2.4 Continuation of Annex Work Introduction At the September 2005 Executive Committee Meeting in Zürich, Switzerland, it was agreed that collaborative environmental work in Annex 1 continues to be vital to the overall success of the Geothermal Implementing Agreement. Furthermore, the Annex has adapted to changing priorities, with a current emphasis on Subtask D, which is investigating induced seismicity. This has resulted in two very successful, and well attended (25-38) special workshops in 2005 to address a specific environmental and technical problem. A 4-year extension to the Annex was therefore approved for the period Work Plans for , Overall Themes Better understanding of the factors that affect the intensity and distribution of induced earthquakes in developed geothermal fields. Development of improved carbon dioxide and heat flux monitoring techniques in areas of steaming ground. Changes to natural thermal features induced by development, and practical methods of controlling or mitigating such effects by subsurface pressure management. Improvements in subsidence modelling to provide a more reliable basis for future predictions, and possible mitigation, remediation or avoidance strategies. Advances in understanding of the processes involved in reducing hydrogen sulphide and mercury emissions, and using thermophilic bacteria (bio-remediation) or chemical process to reduce toxic chemical contaminants (such as arsenic) from geothermal waste waters Work Planned for Subtask A Changes in gas and steam emissions from natural features. Distinguishing natural and induced variations in thermal discharges. Modelling causes of groundwater effects from deep pressure change. Methods of ranking thermal features and ecosystems for protection. Classify vulnerability of thermal features to reservoir pressure changes. Subtask B Cost-effective H 2 S and Hg removal from production steam. Geothermal CO 2 capture for horticulture or bottling. CO 2 sequestration by injection or chemical fixing. Arsenic/boron removal from waste water by bio-processing. GIA 2005 Annual Report 22

25 Protection of potable water aquifers from outfield reinjection effects. Improved prediction of subsidence and effects avoidance or mitigation. Subtask C Environmental policy, practical advice and position paper. Finalise position paper on balanced environmental management. Test the use of targeted injection to rejuvenate failed geysers. Test the use of targeted injection to stop subsidence. Subtask D Induced seismicity- determine mechanisms. Differentiate induced from natural causes. Predict likelihood of damaging induced earthquakes. Devise avoidance or mitigation schemes. Planned Outputs Continue to conduct workshops on induced seismicity in conjunction with suitable geothermal workshops, and prepare position papers on discussion results. 2.5 Outputs for th Stanford Geothermal Reservoir Engineering Workshop (31 January-2 February 2005). o Eight papers from the USA, Japan, Iceland and EU authors addressed issues related to stimulating earthquakes in EGS at Coso (USA), Coopers Basin (Australia) and Soultz (France) First Induced Seismicity Workshop was held after the Stanford Workshop in February o Resulted in establishment of a website where 14 presentations can be accessed: World Geothermal Congress 2005 (see below). Geothermal Resources Council 2005 Annual Meeting held in September 2005; the following papers were presented and published in the Transactions of the GRC, vol. 29: o Bromley, C.J. The Ying and the Yang and Geothermal environmental Management o Majer, E., R. Baria and Fehler. Cooperative research on induced seismicity associated with enhanced geothermal systems o Several papers addressed induced seismicity issues at Cooper Basin (Australia), The Geysers (USA), Coso (USA) and Soultz (France) Second Induced Seismicity Workshop was held in Reno, Nevada, USA, in September o A draft white paper entitled: Induced Seismicity and Enhanced Geothermal Systems was developed by Ernie Majer GIA 2005 Annual Report 23

26 New Zealand Geothermal Workshop was held in Rotorua, New Zealand, in November 2005, with the following papers presented: o Bromley, C.J. Taupo Subsidence Reassessment with the Help of Boltzmann Functions, INSAR and GPS Data o Young and White A New Method for the Prediction of Reservoir Subsidence o Mroczek, E. Removal of Arsenic from Geothermal Fluids by Electro-Coagulation. 2.6 List of World Geothermal Congress (WGC) 2005 Environmental Papers Presented by Participating Authors from IEA-GIA Countries Ármannsson, H. Monitoring the Effect of Geothermal Effluent from the Krafla and Bjarnarflag Power Plants on Groundwater in the Lake Mývatn Area, Iceland, with Particular Reference to Natural Tracers Asanuma, H. Monitoring of Reservoir Behavior at Soultz HDR Field by Super-Resolution Microseismic Mapping Bertani, R. Greening of Geothermal Power: An Innovative Technology for Abatement of Hydrogen Sulphide and Mercury Emission Bromley, C.J. Advances in Environmental Management of Geothermal Developments Bromley, C.J. and M. Hochstein Heat Discharge of Steaming Ground at Karapiti (Wairakei) Bromley, C.J. and C. Werner Carbon Dioxide Emissions from the Rotorua Hydrothermal System, New Zealand Giroud, N. Estimation of Long-Term CO 2 and H 2 S Release During Operation of Geothermal Power-Plants Ito, H. Preliminary Results of CO 2 Sequestration into Ogachi Geothermal Reservoir, Northeast Japan Keam, R. Definition and Listing of Significant Geothermal Feature Types in the Waikato Region Kristmannsdóttir, H. Geochemistry, Origin and Balneological Properties of a Geothermal Brine at Hofsstadir near Stykkishólmur, Iceland Lawless, J. Advances in Subsidence Modelling of Geothermal Fields Lund, J.W. Basic Principals of Geothermal Balneology and Examples in the United States Motoyama, T. Development of a Commercial Plant for Arsenic Removal from Geothermal Hot Water at Hatchobaru Power Plant Rossi, A. Interpreting Ground Deformation and Microgravity Changes in the Travale-Radicondoli Geothermal Field (Italy) Sarychikhina, O. Modelling of Subsidence in the Cerro Prieto Geothermal Field, B. C., Mexico Webster-Brown, J. The Environmental Fate of Geothermal Arsenic in a Lowland River System, New Zealand GIA 2005 Annual Report 24

27 2.7 Websites Related to Annex I Studies IEA-GIA website: Website hosting the results of the IEA-GIA convened induced seismicity workshops, containing presentations and links: Author and Contact Chris Bromley, GNS Science, Wairakei Research Centre, Taupo, New Zealand; c.bromley@gns.cri.nz GIA 2005 Annual Report 25

28 IEA GEOTHERMAL R&D PROGRAMME Chapter 3 Annex III- Enhanced Geothermal Systems 3.0 Introduction Enhanced Geothermal Systems (EGS) energy technologies have been conceived to extract the natural heat contained in high temperature, water-poor rocks in formations that are either too dry or too impermeable to transmit available water at useful rates. Necessary permeability can be created by hydraulic fracturing or stimulation, which involves the high-pressure injection of a fluid into the reservoir to crack and enlarge pre-existing fractures. The objective of the EGS Annex is to address new and improved technologies, which can be used to artificially stimulate a geothermal resource to enable commercial heat extraction. The countries and organization participating in Annex III in 2005 were: Australia, Italy, Germany, Japan, Switzerland, USA and the EC. The Operating Agent for Annex III is the New Energy and Industrial Technology Development Organization (NEDO), Japan. The Task Leader of Annex III is Isao Matsunaga, AIST, Japan. 3.1 Annex III Subtasks The work undertaken in Annex III is divided among three Subtasks. Note that Subtask A, involving the evaluation of the economics of EGS systems, was successfully completed in An evaluation code can be downloaded from the Internet. Subtask E, which was proposed by USA and EU, was approved by the participants. Peter Rose at EGI, University Utah, is the Subtask Leader and Andre Gerard of EEIG at Soultz is Co-Leader Subtask B- Application of Conventional Geothermal Technology to EGS (Subtask Leader: Joel Renner, Idaho National Laboratory, USA) Subtask B is aimed to modify conventional geothermal development technology, such as horizontal drilling, fracture detecting and mapping, and pumping, for applying to EGS energy development Subtask C- Data Acquisition and Processing (Subtask Leader: T. Mégel, Geowatt AG, Switzerland) Subtask C involves the collection of information necessary for the realization of a commercial EGS energy producing plant at each stage of reservoir characterization, design and development and of construction and operation. GIA 2005 Annual Report 26

29 3.1.3 Subtask D- Reservoir Evaluation (Subtask Leader: Tsutomu Yamaguchi, AIST, Japan) The overall object of Subtask D is to compile and make clear what kind of methods, techniques, and tools are effective for reservoir evaluation; and then establish the evaluation method that can be applied to develop a new EGS site, through the use of the Internet questionnaire Subtask E- Field Studies of EGS Reservoir Performance (Subtask Leader: Peter Rose, EGI University Utah, USA, and Co-Leader: Andre Gerard, EEIG, EC) The objective of Subtask E is to conduct Engineered Geothermal Systems (EGS) research and development with an emphasis on reservoir-management and reservoir-enhancement technologies. This topic covers a broad area, including fracture- and stress-analysis, hydraulic and chemical stimulation, fluid-flow modelling of hydraulic and chemical stimulation processes, tracer technologies, and geophysical methods. This is a collaborative subtask between the EGS projects at Soultz-sous-Forêts (France) and Coso, California (USA). 3.2 Work Performed in Subtask B- Application of Technology of Conventional Geothermal Energy to Enhanced Geothermal System Technology U.S. Department of Energy (DOE) continues to fund research projects bridging between hydrothermal technology and technology that will be useful for Enhanced Geothermal Systems development. Much of this research is described in the EGS sessions of the Transactions Geothermal Resources Council Annual Meeting 2005 ( and the Proceedings, Thirty-First Workshop Geothermal Reservoir Engineering, Stanford University ( DOE research continues studies of fractures in existing hydrothermal systems to gain a better understanding of the structural and geochemical changes that may occur in artificially generated geothermal systems. The TOUGH family of reservoir simulators continues to be modified to include chemical reactions and mechanical properties of the reservoir rock. TOUGH-REACT is being coupled to FRAC-3D to provide a coupled flow-chemical mechanical code that can be used in hydrothermal and EGS. Several field based studies are also investigating the mineralogy and chemistry of hydrothermal systems to aid in predicting chemical changes that may be anticipated in EGS. DOE in conjunction with the U.S. Navy and the U.S. Geological Survey is funding the development of improved methods for determining locations of microearthquakes in existing hydrothermal fields. These methods will be utilized in the planned EGS stimulation project at the Coso, California, geothermal field. DOE is also funding several projects that will provide an up-to-date review of current petroleum industry stimulation practices. Both laboratory studies and theoretical considerations suggest that hydraulic stimulation of rocks produces electric currents in surrounding rocks that can be detected through properly instrumented SP studies. DOE is funding several projects bearing on the phenomena in collaboration with researchers in Japan. Heat flow studies initiated for hydrothermal exploration in the United States are also suitable for EGS. DOE continues to fund such heat flow studies in order to better delineate targets for both hydrothermal and EGS development and also to establish the resource base for EGS development in the U.S. GIA 2005 Annual Report 27

30 Researchers completed development of a high-temperature acoustic televiewer. The televiewer has been tested at the Coso geothermal field at temperature up to about 235 ºC. The tool is designed for a maximum temperature of 275 ºC Subtask C- Data Acquisition and Processing The first version of the EGS-PMDA was presented at the IEA-GIA booth at the World Geothermal Congress WGC 2005 in Antalya, Turkey. An advertisement has been installed at the IEA-GIA website under including a downloadable flyer. The extension of the EGS- PMDA has been discussed at the Annex III meetings in Antalya, Turkey and in Zürich, Switzerland. Two major tasks have been identified: 1. The EGS-PMDA includes a list of suppliers of technical services. This facilitates the planning of specific project steps and provides and overview to the state of art of commercially available services. However, this list can never be complete. Therefore a company interested in offering their services to EGS projects should have the opportunity of self-declaration to this list. This can be solved best via a website. 2. Increasingly new EGS projects are started on financially private basis. The access to information is therefore limited. It has been proposed to include in future the public available information in separate sections of an updated version of the EGS-PMDA Subtask D- Reservoir Evaluation The questionnaire had been finished. But the answers (especially from foreign countries other than Japan) were not sufficient to complete the task. Thus Subtask D we will be focusing our efforts on compiling Japanese data that includes Hijiori and Ogachi fields. Apart from the activity of Subtask D, a review program chaired by Prof. Niitsuma of Tohoku University had compiled a review of Hijiori project from October 2002 to March The review mainly consists of Overall System Design, Field Characterization, Reservoir Creation, Circulation and Heat Extraction and Monitoring. The most essential parts of the review related to the Subtask D are Circulation and Heat Extraction and Monitoring. These parts of the review were translated from Japanese into English Subtask E- Field Studies of EGS Reservoir Performance Two fundamental EGS research areas are reservoir stimulation and circulation testing, which deal with the creation of the heat exchanger fracture network and its subsequent characterization, respectively. Work performed on this Subtask at the Soultz-sous-Forêts EGS reservoir during 2005 focused on geochemical aspects of these two disciplines- the development and testing of mineral dissolution agents for chemical stimulation and the development and evaluation of novel tracers and tracer-testing approaches Mineral Dissolution Agents for the Chemical Stimulation of Near-Wellbore EGS Formations Under a grant from the U.S. Department of Energy, EGI studied the application of various mineral dissolution agents for the purpose of enhancing near-wellbore permeability. Such an approach is potentially very useful in an environment such as the one at Soultz where hydraulic stimulation testing is risky due to induced seismicity. Included in the study were two promising chelating agents, EDTA and HEDTA, which have been used in the petroleum industry for dissolving calcite scale in oil wells. Thermal stability studies were conducted in laboratory bench-scale reactors under high-temperature geothermal conditions GIA 2005 Annual Report 28

31 in order to determine the thermal-decay kinetics. Both EDTA and HEDTA were shown to decay according to first-order kinetics. Data from the experiments were used to determine the controlling Arrhenius-equation parameters, which could be subsequently used to determine the temperature dependence of the decay rate constant. Shown in Figure 3.1 are plots of ln(k) vs inverse temperature between 160 o C and 180 o C, where k is the decay-rate constant. Figure 3.1 Plots of the temperature dependence of the decay rate constants for EDTA and HEDTA over the temperature range 160 o C 180 o C. These data show that the thermal stabilities of EDTA and HEDTA change positions over this temperature range, with HEDTA being slightly more stable at 160 o C and EDTA more stable at 180 o C. Either chelating agent possesses sufficient thermal stability to be used at Soultz Tracer Testing at Soultz as Part of the 2005 Circulation Test A tracer test was conducted during the summer of 2005 as part of a circulation test at the recently completed Soultz EGS reservoir. The objective of this tracer test was to characterize the fluid-flow pathways between injection well GPK-3 and production wells GPK-2 and GPK kg of the tracer fluorescein was injected into GPK-3 and the two producers were subsequently monitored during the ensuing five months of the circulation test. Samples were sent to BRGM s analytical laboratory at Orleans, France, for analysis. A subset of samples was analyzed on site by EGI in order to provide real-time feed-back during the early days of the circulation experiment using EGI s state-of-the-art analytical equipment. Excellent agreement between BRGM and EGI was obtained as shown in Figure 3.2 below, which plots the tracer-analysis results from samples taken at production well GPK-2 and analyzed by EGI on site and by BRGM in the laboratory. GIA 2005 Annual Report 29

32 Figure 3.2. Tracer return curve from test conducted during the summer and fall of 2005 at the Soultz-sous-Forêts EGS reservoir. 3.3 Activity in Participating Countries Switzerland In Switzerland there are 4 major activities in the domain of EGS: 1. Soultz-sous-Forêts, France Since over 15 years a Swiss EGS research group is active at the European EGS project in Soultzsous-Forêts, France, in the domain of hydro-mechanical reservoir modelling, borehole simulations, data interpretation and geochemical modelling. Three projects are in different stages of realization: 2. Deep Heat Mining (DHM) Project Basel This is the most advanced project in Switzerland. The goal is a co-generation plant of 3 MW e power generation and 20 MW th heat for the local district network. The drilling of the first of the planned three 5 km deep boreholes will start in early summer The monitoring wells for the microseismic network are under work. VSP measurements have been carried out in the exploratory well OT2 which reaches the target granite. 3. Deep Heat Mining Project Geneva Geologic, environmental and feasibility studies led to site selection: it is located 4 km west of the city of Geneva, in the Aire peninsula, encircled by the Rhone River. The first exploratory well is in the concept phase. 4. GCP-VR ( Geothermie du cristallin profond, Valle du Rhone ) The project aims to evaluate the feasibility of producing geothermal electricity form EGS systems along the Rhone valley, in the cantons Valais and Vaud. The project will start in September 2005 with a geologic/hydrogeologic/geothermics study financed by the Swiss Federal Office of Energy. GIA 2005 Annual Report 30

33 3.3.2 Soultz Project, EC On the beginning of 2005, the three deep wells GPK2, GPK3 and GPK4 were drilled down to 5000 m (Figure 3.3). After hydraulic stimulation tests of various intensities and durations, they have been more or less successfully connected to the surrounding natural fractures system (Table 3.1 and previous GIA Annual Reports). During the first part of year 2005 the focus was on an attempt to develop the injectivity/productivity indexes of the well GPK4. A second hydraulic stimulation job performed in February produced a slight improvement of the injectivity of that well (from about 2 l/s/mpa to about 2.5 l/s/mpa). That operation was followed by a soft HCl chemical stimulation at the end of which the injectivity of the well appeared to be close from 4 l/s/mpa. During the second part of the year the focus was on a first circulation test (through a loop built from March to June) between both GPK2 and GPK4 (production wells) and GPK3 (re-injection well). That test was carried out from 11 th July up to 19 th December 2005 (total duration of about 5 months). The production was only buoyancy effect driven and a rather high pressure (# 0.5 to 1.2 MPa) was intentionally maintained at wellhead in order to moderate the scaling problems in the surface loop. The main stable results are summarised in Table 3.1. Figure 3.3. Soultz Project well information. Table 3.1. Soultz Project stable well information at the end of Characteristic Flow (l/s) Wellhead temperature ( C) Wellhead pressure (MPa) Estimated injectivity (l/s/mpa) Estimated productivity (l/s/mpa) Production Well GPK2 Production Well GPK4 Re-injection Well GPK GIA 2005 Annual Report 31

34 At the end of the circulation test the proportion of natural brine appeared as being stable around values of about 85% for GPK2 and 80% for GPK4. Some scaling of unforeseen nature, dominated by iron carbonate and magnetite (calcite risk was considered as the major one before this test) generated some problems with the plate heat exchanger used for cooling the brine before reinjection. Nevertheless they were mastered enough to not generate any shortening of the duration of the circulation test. Tracer tests using various techniques (batch injection of fluoresceine or fluid signed with Naphtalene sulfonates) carried out in cooperation with EGI (Utah Univ.) under umbrella of the IEA / GIA / Annex III Agreement. Tracer response indicates the water reinjected in the well GPK3 returned back in very variable proportion to the production wells GPK2 and GPK4. The main connections appeared between GPK3 and GPK2 (see loops 1 and 2 in Figure 3.4). 2 GPK2 1 GPK3 GPK4 3(?) Inflow of geothermal brine Inflow of geothermal brine (Sanjuan et al., 2006) Figure 3.4. Schematic results for reinjection into well GPK3. The shortest scale loop 1 had a mean transfer time calculated to be close from 25 days for a swept volume evaluated to 4500 m 3 and the largest (deepest?) scale loop 2 had a mean transfer time calculated to be close from 77 days for a swept volume evaluated to 5500 m 3. The third loop between GPK3 and GPK4 could have needed a much longer circulation time to be fully defined. Nevertheless the present interpretations suggest that GPK4 could be essentially connected to the large loop between GPK3 and GPK2 rather than directly to GPK3. Some microseismic activity was observed continuously during this test. It started some days after the beginning of the circulation. Despite the location of the events which are for a large part under the production well GPK2, this activity looked as being in quasi totality triggered by the over pressure required for re-injection in GPK3. A maximum magnitude of 2.3 was observed during a period where the injection rate had been increased up to about 20 l/s Australia A number of geothermal exploration companies have formed in Australia following the success of Geodynamics Limited program in granites beneath the Cooper Basin. Most of these are exploring for high temperature rocks before commencing development of any engineered systems. GIA 2005 Annual Report 32

35 Geodynamics circulation testing program succeeded in producing flow from its Habanero #2 well at rates up to 20 l/sec and surface temperatures of 210 ºC. However, gradual loss of productivity is attributed to a lost bridge plug lodged in the upper part of the fracture zone at a depth of 4,300 m, where rock temperatures are 250 ºC. Following this loss of access to the main fracture zone, an upper stimulated zone was developed in fractures at a depth of 4,100 m. The upper zone was proven to flow independently of the lower main zone. Further stimulation of the main zone from Habanero#1 well resulted in extension of the seismically activated zone by a further 50%. The activated zone now extends more than 3 km by 1.6 km in plan view. In early 2006 a side track is planned around the lost bridge plug in Habanero#2 to regain access to the main stimulated zone. The side track will be drilled using a snubbing unit and water in full underbalanced mode with formation fluid production during drilling. Circulation and tracer testing after the side track is completed should see a commitment to build a 2-3 MW e demonstration power station. 3.4 Highlights of Annex Programme Work for 2005 The World Geothermal Congress (WGC) 2005 which is the biggest periodic event in geothermal field was held at Antalya, Turkey. For advertising Annex III activity, a poster was displayed at IEA-GIA booth, and papers related Annex III activity were presented at the Congress. Under this Subtask C, a tool of Project Management Decision Assistant (PMDA) was released as a classifier, containing more than 80 pages, divided into 5 main registers (Figure 3.5), and an attached CD with 6 data collections. In detail the chapters contain a data matrix defining the data requirement for each development phase of an EGS power plant, an overview of former and present EGS projects, a bibliography, and a list of suppliers. The first version of the EGS-PMDA can be ordered under Chapters EGS-PM DA: H andbook for starting new EG S Projects Status 2005 Introduction Tasks and targets and generalsta tu s E G S -P M D A Project planning Generic project Principalm ilestones with in the w hole life cycle o f a E G S p lant Data Matrix (E X C E L): D a ta re q u ire m e n t fo r e a ch p ro ject phase Task M atrix: F irst p o in t o f n e e d o f a sp e cific d a ta se t In fo rm a tio n to th e d a ta se ts Index of Suppliers Register of suppliers (E X C E L) S ources of Know -how Collected Experiences D atabases (AC C ESS) Fenton H ill: L ite ra tu re Rosemanowes : Lite ra tu re, In fo rm a tio n to d a ta Soultz-sous-Forêts: Literature, Inform ation to data EGS-PMDA-classifier, including a CD Bibliography EGS lite ra tu re d a ta b a se (E n d N o te ) Figure 3.5. The EGS Project Management Decision Assistant (PMDA) handbook. 3.5 Continuation of Annex Work The objective of the EGS Task is to address new and improved technologies, which can be used to artificially stimulate a geothermal resource to enable commercial heat extraction. Progress has been relatively slow in developing EGS. However, several EGS projects are now being pursued in Europe, America, and Australia. And field application of EGS technology and also collaboration of R&D among groups becomes more important for future EGS development. Although there are different levels of effort among the Subtasks, participants of the Task recognized such situation GIA 2005 Annual Report 33

36 and agreed to continuation of the Annex. Work plan of each Subtask for extended period is compiled in the other report. Subtasks B, C, and E will be continued to Subtask D will probably be terminated in 2006 or Outputs for 2005 Conference proceedings and articles: André L. & Vuataz F.D. (2005) Stimulated evolution of reservoir properties for the Enhanced Geothermal System at Soultz-sous-Forêts: the role of hot brine-rock interactions: Proceedings, 30 th Workshop on Geothermal Reservoir Engineering, Stanford University SGP-TR-176. Baria, R., Michelet, S., Baumgaertner, J., Dyer, B., Nicholls, J., Teza, D., Hettkamp, T., Soma, N., Asanuma, H., and Kueperkoch, L. (2005) A 5000 m Deep Reservoir Development at the European HDR Site at Soultz: Proceedings, 30 th Workshop on Geothermal Reservoir Engineering, Stanford University SGP-TR-176. Baujard C. & Bruel D. (2005) Improving a numerical tool and evaluating impact of density changes of injected fluids in the hydraulic behaviour of HDR reservoirs. Proceedings, 30 th Workshop on Geothermal Reservoir Engineering, Stanford University SGP-TR-176. Dezayes Ch., Chèvremont P., Tourlière B., Homeier G., Genter A. Geological study of the GPK4 HFR borehole and correlation with the GPK3 borehole (Soultz-sous-Forêts, France). BRGM/RP FR, 85 p., 24 Figs, 6 Tables, 3 Annexes. Evans K. F. (2005) Permeability creation and damage due to massive fluid injections into granite at 3.5 km at Soultz: Part 2 - Critical stress and fracture strength: Journal of Geophysical Research, 110, B Evans, K. F., Genter, A. and Sausse, J. (2005) Permeability creation and damage due to massive fluid injections into granite at 3.5 km at Soultz: Part 1 - Borehole observations: Journal of Geophysical Research, 110, B Evans, K.F., H. Moriya, H. Niitsuma, R.H. Jones, W.S. Phillips, A. Genter, J. Sausse, R. Jung, and R. Baria (2005) Microseismicity and permeability enhancement of hydro-geologic structures during massive fluid injections into granite at 3 km depth at the Soultz HDR site: Geophys. J. Int., 160: Hooijkaas G.R., Genter A. and Dezayes C. (2005) Deep seated geology of the granite intrusions at the Soultz HFR site based on 5 km depth borehole data. J. Volc. Geoth. Research., in press. Klee G (2005) The European Hot-Dry-Rock project in the tectonic regime of the Upper Rhine Graben. In: Rock Mechanics with Emphasis on Stress (ed. F. Rummel), , Balkema. Kohl, T. and Mégel, T. (2005) Coupled Hydro-Mechanical Modelling of the GPK3 Reservoir Stimulation at the European EGS Site Soultz-sous-Forêts: Proceedings, 30 th Workshop on Geothermal Reservoir Engineering, Stanford University SGP-TR-176. Rachez X PROJET SOULTZ-SOUS-FORÊTS Modélisation thermo-hydro-mécanique 3DEC de GPK1 avec prise en compte de la convection thermique par le fluide, Rapport final ITASCA , 341 p. Rose, P.E., Sheridan, J., McCulloch, J., Moore, J.M., Kovac, K, Weidler, R, and Hickman, S. (2005) The Coso EGS Project Recent Developments: GRC Transactions, 28. Rose, P.E., McCulloch, J., Adams, M.C., and Mella, M. (2005) An EGS Stimulation Experiment under Low-Wellhead Conditions: Proceedings, 30 th Workshop on Geothermal Reservoir Engineering, Stanford University SGP-TR-176. GIA 2005 Annual Report 34

37 Rummel, F (2005) Geothermal energy - an energy option for the future. In: Rock Mechanics with Emphasis on Stress (ed. Rummel F), , Balkema. Sausse J. & Genter A. (2005) Types of permeable fractures in granite, Special Publication of the Geological Society of London, 240, List of WGC 2005 Papers Presented (Oral and Poster) Prepared Annex III Poster for display at IEA/GIA booth WGC 2005, and the following papers were presented for the WGC: Asanuma, H., Kumano, Y., Izumi, T., Soma, N., Niitsuma, H., and Baria, R.: Monitoring of Reservoir Behavior at Soultz HDR Field by Super-Resolution Microseismic Mapping. Asanuma, H., Soma, N., Kaieda, H., Kumano, Y., Izumi, T., Tezuka, K., Niitsuma, H., and Wyborn, D.: Microseismic Monitoring of Hydraulic Stimulation at the Australian HDR Project in Cooper Basin. Baria, R., Michelet, S., Baumgärtner, J., Dyer, B., Nicholls, J., Hettkamp, T., Teza, D., Soma, N., Asanuma, H., Garnish, J., and Megel, T.: Creation and Mapping of 5000 m deep HDR/HFR Reservoir to Produce Electricity. Baumgärtner, J., Teza, D., Hettkamp, T., Homeier, G., Baria, R., and Michelet, S.: Electricity Production from Hot Rocks. Dezayes, C., Genter, A., and Hooijkaas, G.R.: Deep-Seated Geology and Fracture System of the EGS Soultz Reservoir (France) based on Recent 5km Depth Boreholes. Kaieda, H., Ito, H., Kiho, K., Suzuki, K., Suenaga, H., and Shin, K.: Review of the Ogachi HDR Project in Japan. Kohl, T., Mégel, T., Baria, R., Hopkirk, R., and Rybach, L.: Determining the Impact of Massive Hydraulic Stimulation on Local Microseismicity. Kumano, Y., Moriya, H., and Niitsuma, H.: Estimation of Radiational Mechanism of AE Multiplets Observed While Hydraulic Fracturing in HDR Reservoir. Matsunaga, I., Yanagisawa, N., Sugita, H., and Tao, H.: Tracer Tests for Evaluation of Flow in a Multi-Well and Dual Fracture System at the Hijiori HDR Test Site. Matsunaga, I., Renner, J., Megel, T., and Yamaguchi, T.: Status of the IEA Geothermal Implementing Agreement Task III. Matsunaga, I., Niitsuma, H., and Oikawa, Y.: Review of the HDR Development at Hijiori Site, Japan. Mégel T., Kohl T., Gérard A., Rybach L.1, Hopkirk R.: Downhole Pressures Derived from Wellhead Measurements during Hydraulic Experiments. Moriya, H., Niitsuma, H., and Baria, R.: Multiplet Analysis for Estimation of Critical Pore- Pressure of Fractures Inside Geothermal Reservoirs. Orzol, J., Jung, R., Jatho, R., Tischner, T., and Kehrer, P.: The GeneSys-Project: Extraction of Geothermal Heat from Tight Sediments. Pruess, K., van Heel, T., and Shan, C.: Tracer Testing for Estimating Heat Transfer Area in Fractured Reservoirs. GIA 2005 Annual Report 35

38 Rabemanana, V., Vuataz, F.-D, Kohl, T. and André, L.: Simulation of Mineral Precipitation and Dissolution in the 5-km Deep Enhanced Geothermal Reservoir at Soultz-sous-Forêts, France. Robertson-Tait, A., Morris, C. and Schochet, D.: The Desert Peak East EGS Project: A Progress Report. Rose, P.E., Sheridan, J., McCulloch, J., Moore, J.N., Kovac, K., Weidler, R., and Hickman, S.: An Enhanced Geothermal System at Coso, California Recent Accomplishments. Soma, N., Takehara, T., Asanuma, H., Niitsuma, H., Baria, R., Michelet, S., and Wyborn, D.: Automatic Wave Picking Technique for Multi-Component Microseismicity and It's Practical Application to on Site Analysis in HDR Development. Tenma, N., Yamaguchi, T., and Zyvoloski, G.: Variation of the Characteristics of the Shallow Reservoir at the Hijiori Test Site between 90-days Circulation Test and Long-Term Circulation Test Using FEHM Code. Tezuka, K., Tamagawa, T., and Watanabe, K.: Numerical Simulation of Hydraulic Shearing in Fractured Reservoir. Yanagisawa, N., Matsunaga, I., Sugita, H., Sato, M., and Okabe, T.: Scale Precipitation During Circulation at the Hijiori HDR Test Field, Yamagata, Japan. Wannamaker, P.E., Rose, P.E., Doerner, M.W., McCulloch, J., and Nurse, K.: Magnetotelluric Surveying and Monitoring at the Coso Geothermal Area, California, in Support of the Enhanced Geothermal Systems Concept: Survey Parameters, Initial Results. Wyborn, D., de Graaf, L., Davidson, S. and Hann, S.: Development of Australia s First Hot Fractured Rock (HFR) Underground Heat Exchanger, Cooper Basin, South Australia. 3.8 Websites Related to Annex Work Coso stimulation Project, USA: Deep Heat Mining, Switzerland: DOE technical projects: GeneSys-Project, Germany: Germany s Resources: Habanero project, Australia: Hijiori project, Japan: Soultz European HDR Project: University Utah, USA: Authors and Contacts Andre Gerard, EEIG, Kutzenhausen, France; gerard@soultz.net Isao Matsunaga, AIST, Tsukuba, Ibaraki, Japan; isao-matsunaga@aist.go.jp Thomas Mégel, GEOWATT AG, Zürich, Switzerland; megel@geowatt.ch Joel Renner, Idaho National Laboratory, Idaho Falls, Idaho; USA; rennerjl@inl.gov Peter Rose, Energy and Geoscience Institute, University of Utah, Salt Lake City, Utah, USA; prose@egi.utah.edu Tsutomu Yamaguchi, AIST, Tsukuba, Ibaraki, Japan; t-yamaguchi@aist.go.jp GIA 2005 Annual Report 36

39 IEA GEOTHERMAL R&D PROGRAMME Chapter 4 Annex IV- Deep Geothermal Resources 4.0 Introduction The Deep Geothermal Resources Task began as one of the original Annexes in 1997, and was initiated as a four-year international collaborative program under the IEA Geothermal Implementing Agreement (GIA). In 2001, the GIA Executive Committee approved the continuation of this Annex to The objective of the Deep Geothermal Resources Annex is to address the issues necessary for the commercial development of deep geothermal resources at depths greater than 3,000 m. The activity in this Annex has slowed considerably in the past two years; with the only major projects currently being pursued that at Soultz (an EC project in Alsace, France) and those in Germany. Mexico also continued to participate, albeit in a low-level manner. This situation has evolved as a consequence of a growing overlap of Annex IV investigations with Annex III due to the emphasis of deep geothermal resources work moving more into creation of geothermal reservoirs at depths greater than 3,000 m, i.e. the application of EGS to create deep geothermal resources. In addition, there has been a gradual shifting of Annex IV studies into Annexes III and VII. Consequently, the only participants in Annex IV in 2005 were Forschungszentrum Jülich GmbH, Germany and Instituto de Investigaciones Eléctricas, Mexico. However, it is recognized that there are still important topics associated with deep geothermal resources that require investigation, for example: the effects of high temperature acid fluids. There are also current GIA Members, such as Iceland, Italy and New Zealand, interested in deep geothermal resources studies, though they are awaiting certain developments within their countries before committing to their participation. One very important project is the Iceland Deep Drilling Project, which is awaiting successful completion of the current drilling phase of a 5 km deep well before agreeing to participate in Annex IV. There are also prospective new Members who have declared an interest in deep geothermal resources. Consequently, the Executive Committee have decided to keep Annex IV active with plans to re-design it when its current term of operation ends in The Operating Agent for Annex IV is Forschungszentrum Jülich GmbH, Germany. The Task Leader for 2005 was Dieter Rathjen. 4.1 Subtasks of Annex IV The investigations in this Annex are presently divided into three subtasks Subtask A- Exploration Technology and Reservoir Engineering (Subtask Leader: to be appointed) The objective of Subtask A is to carry out collaborative research on exploration technology, including geothermal modelling; geophysical, geological and geochemical exploration; and on reservoir engineering, including reservoir characterization and reservoir modelling. GIA 2005 Annual Report 37

40 4.1.2 Subtask B- Drilling and Logging Technology (Subtask Leader: to be appointed) The objective of Subtask B is to carry out collaborative research on drilling and logging technologies, including the reviews of drilling and logging reports of deep geothermal wells; and exchange of information on improvements in drilling and logging tools Subtask C-Reservoir Evaluation (Subtask Leader: to be appointed) Subtask C seeks to exchange experience on materials and chemistries among the group. Published and unpublished information is gathered on past, present and planned experiences, and tests and research on materials in deep and aggressive geothermal systems. The information is then summarized in a database. 4.2 Work Performed in Germany Groß Schönebeck The Groß Schönebeck study is part of an interdisciplinary project that seeks to develop geothermal technologies required for extracting hot fluids (> 100 ºC) at rates (> 50 t/h) sufficient to economically generate electricity in sedimentary basins. The initial results from this ongoing investigation were described in the 2004 Annual Report. Though this project is scheduled to continue into 2006, the German Ministry cut the budget in 2005, and tests on the first well were not completed. GeneSys Project This project involves investigating the extraction of geothermal heat from fight sediments at a test well in Horstberg (near Hannover). The goal is to provide 2 MW t for direct use. The results demonstrated that water fracture technology was applicable in sedimentary environments, with water injection having created a large fracture volume with high conductivity (~ 10 - > 100 Dm). Production was demonstrated via cyclic operation (i.e. injection followed by production on a cyclic basis) and deep vertical circulation (i.e. injection at depth and production of this injected water at higher levels. Investigations are to continue at the Horstberg test site and preparations were begun at the Hannover site EC Soultz-sous-Forêts (Alsace, France) Germany continued its participation in 2005, with France, Italy, Switzerland and the EC, on the European Soultz-sous-Forêts project to develop a scientific geothermal pilot plant as the first phase. The second production well, GPK-4, was drilled in 2004, and stimulation tests continued in Work Planned for 2006 The Soultz project is ongoing and will be continuing into 2006, when the pilot power plant is to be completed. Government aid from the EC, France and Germany will continue to provide funding. The project at Groß Schönebeck ran through 2005 with little funding. However, a second borehole is needed to complete this study and positive discussions with the German Ministry indicate that financing for it will be forthcoming, with drilling expected to begin in May GIA 2005 Annual Report 38

41 4.4 Outputs European Hot Dry Rock Association EHDRA, Scientific Conference, March Soultz-sous-Forêts, France. Presentations and publications in the Proceedings. Geothermal: Synergie und Effizienz Annual Meeting November 2005 in Unterschleißheim, Germany. World Geothermal Congress 2005, Antalya, Turkey April 2005 Contributions Baumgärtner, Teza, Hettkamp (2005) Electricity Production from Hot Rocks; p Henninges, Zimmermann, Huenges (2005) Wireline Distributed Temperature Measurements and Permanent Installations behind Casing, p Holl, Moeck, Schandelmeier (2005) Characterisation of the Tectono-Sedimentary Evolution of a Geothermal Reservoir, p Köhler (2005) Analysis of the Combined Heat and Power Plant Neustadt-Glewe, p Legarth, Saadat (2005) Energy Consumption for Geothermal Wells, p Legarth, Zimmermann, Huenges (2005) Fracture Performance Impairment and Mitigation Strategies, p Orzol, Jung, Jatho, Tischner (2005) The GeneSys-Project: Extraction of Geothermal Heat from Tight Sediments, p Seibt, Kabus, Hoth (2005) The Neustadt-Glewe Geothermal Power Plant, p Zimmermann, Reinicke, Legarth, Saadat, Huenges (2005) Well Test Analysis after Massive Waterfrac Treatments in a Sedimentary Geothermal Reservoir, p Websites Related to Annex IV Work Germany Bad Urach project: EU-Project in Soultz-sous-Forêts: Federal Institut for Geosciences and Natural Resources in Hannover, Germany: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety: Forschungszentrum Jülich, Project Management: GeoForschungsZentrum Potsdam, GFZ: Institut für Energetik Leipzig: Mexico Instituto de Investigaciones Electricas: Author and Contact Dieter Rathjen, Forschungszentrum Jülich, Jülich, Germany; d.rathjen@fz-juelich.de GIA 2005 Annual Report 39

42 IEA GEOTHERMAL R&D PROGRAMME Chapter 5 Annex VII- Advanced Geothermal Drilling h l 5.0 Introduction The objective of advanced drilling technology is to promote ways and means to reduce the cost of geothermal drilling through an integrated effort which involves developing an understanding of geothermal drilling needs, elucidating best practices, and fostering an environment and mechanisms to share methods and means to advance the state of the art. Drilling is an essential and expensive part of geothermal exploration, development, and utilization. Drilling, logging, and completing geothermal wells are expensive because of high temperatures and hard, fractured formations. The consequences of reducing cost are often impressive, because drilling and well completion can account for more than half of the capital cost for a geothermal power project. Geothermal drilling cost reduction can take many forms, e.g., faster drilling rates, increased bit or tool life, less trouble (twist-offs, stuck pipe, etc.), higher per-well production through multilaterals, and others. Activities in the Advanced Geothermal Drilling Technology Annex will address aspects of geothermal well construction, which include: Develop a detailed understanding of worldwide geothermal drilling costs. Compile a directory of geothermal drilling practices and how they vary across the globe. Develop improved drilling technology. The objectives of the Advanced Geothermal Drilling Annex are: Quantitatively understand geothermal drilling costs from around the world and identify ways to reduce those costs, while maintaining or enhancing productivity. Identify and develop new and improved technologies for significantly reducing the cost of geothermal well construction to lower the cost of electricity and/or heat produced with geothermal resources. Inform the international geothermal community about these drilling technologies. Provide a vehicle for international cooperation, field tests, etc. toward the development and demonstration of improved geothermal drilling technology. Annex VII of the Geothermal Implementing Agreement has been developed to pursue advanced geothermal drilling research that will address all aspects of geothermal well construction. Participants in this Annex are: Mexico, Iceland, the European Commission, New Zealand, and the United States. Sandia National Laboratories (USA) is the Operating Agent for Annex VII. Task Leader (from Sandia National Laboratories). Stephen Bauer is GIA 2005 Annual Report 40

43 5.1 Subtasks of Annex VII Annex VII has three Subtasks, described below. As specified in the Annex VII Charter, all Participants in the Annex are considered to participate in all Subtasks Subtask A- Compile Geothermal Well Drilling Cost and Performance Information (Subtask Leader: Jaime Vaca, Comisión Federal de Electridad (CFE), Mexico) This activity is a compilation of drilling cost information associated with the development, construction and operation of geothermal wells. This information/data will be maintained in a single database, so that all participants can use it to identify key cost components that might be reduced by new technology or by different drilling practices. Data could include R&D cost, project cost, operation and maintenance cost, and overall cost of energy. It will include information on wells for both electricity and direct-use applications (including geothermal heat pumps), and will include information from 1990 to date. The key modification sought in this time period, based on the realization that operators do not want to openly share costs, is to collect depth-time data, from which, performance may be estimated Subtask B- Identification and Publication of Best Practices for Geothermal Drilling (Subtask Leaders: High Temperature Drilling: Jaime Vaca, Comisión Federal de Electridad (CFE), Mexico; Low Temperature Drilling: Sverrir Thorhallsson, (ISOR), Orkustofnun (OS), Iceland) The Participants plan to identify and catalogue the technologies that have been most successful for drilling, logging and completing geothermal wells. A complete Handbook will contain drilling practices for both direct use (low temperature) and electrical generation (high temperature) wells. The complete Handbook will eventually include, but not be limited to: design criteria for the drilling and completion programs, drilling practices for cost avoidance, problem diagnosis and remediation during slimhole drilling, trouble avoidance, well testing, geophysical logging, and wellbore preservation Subtask C- Advanced Drilling Collaboration (Subtask Leader: Stephen Bauer, Sandia National Laboratories (SNL), USA) The Participants will monitor and exchange information on drilling technology development and new applications in their respective countries. The Participants will also identify activities and projects for collaboration, and then collaboration plans will be developed. For example, the Participants anticipate identifying opportunities to field test in one country a technology/system that is being developed in another participant s country. 5.2 Work Performed in Review of the Antalya Annex VII Meeting Parties interested in Annex VII of the IEA Geothermal Implementing Agreement met at the Sheraton Hotel in Antalya, Turkey on 22 and 26 April Key Points from Meeting: Task leadership was transferred to Stephen Bauer (Sandia National Laboratories). Each of the five active participants in the Annex was represented at one of the meetings: Iceland, Mexico, New Zealand, European Commission, and the United States. GIA 2005 Annual Report 41

44 A key desire of the meeting participants was to get some work accomplished in the Annex. Each task was discussed, with a view towards developing a substantive path forward. Communications will be further augmented through and Skype, so that meetings and costs can be conserved Subtask A- Compilation of Geothermal Well Drilling Cost and Performance Information Mexico (CFE) agreed to accept the responsibility for this task (contact: Jaime Vaca) Subtask B- Identification and Publication of Best Practices Handbook for Geothermal Drilling Handbook draft outline completed. Handbook draft outline posted on GIA webpage, IGA homepage and GRC ing to solicit comments. About a dozen comments received and catalogued for consideration (each commenter responded to personally). Fairly frequent communications between participants via and Skype Subtask C- Collaboration on Advanced Drilling Requests for collaboration received, discussed, and information exchanged between principal investigators. This endeavour- connecting the correct people with each other- at the correct time and place so that a sharing experience can be had by all has proven difficult to align in a way such that normal work is unaffected. Randy Normann was invited to present, Geothermal Strategies at Sandia at the HITEN (High- Temperature European Network) conference, Paris, France, September 6-8, The High- Temperature European Network (HITEN) conference is a sister organization to the U.S. HiTEC (High-Temperature Electronics Conference). The U.S. version is a much larger conference drawing from military high-temperature development programs. In general, the High-Temperature European Network (HITEN) was well attended over the previous 2003 conference (some ~70 people over ~30 in 2003). There were people from the auto, aircraft and drilling industries. Randy also attended a technical high-temperature electronics meeting Schlumberger s Paris, office. Schlumberger is one of two major conference sponsors of HITEN. Schlumberger is a leader in the high-temperature electronics effort as financial sponsors of HOT CAR (hightemperature electronics for the all electric car) and the NETL Joint Industry Partnership currently developing high-temperature electronic components. As such, Schlumberger has serous interest in better understanding the geothermal market. New Zealand and USA collaborated to develop a visit by Steve Bauer, a cost shared information exchange, with travel support provided by the Institute of Geological and Nuclear Sciences (IGNS). During the visit informal meetings and discussions were held at Mighty River Power and Contact Energy offices and drill sites (Mangakino and Wairakei, respectively) and IGNS. The focus of the discussions was on wellbore integrity, lost circulation, and high temperature grouts in the context New Zealand based well construction experiences. Presentations and discussions were also made on high temperature electronics and diagnostics while drilling. The visit culminated in a workshop sponsored by the New Zealand Geothermal Association, Life Cycle Considerations for Geothermal Wells, given by Keith Lichti, Paul Bixley, and Steve Bauer. The workshop was attended by about forty professionals representing about ten companies, a university, and a GIA 2005 Annual Report 42

45 government lab. This information exchange supports wellbore integrity and lost circulation, as well as other geothermal drilling issues design criteria for the drilling and completion programs, drilling practices for cost avoidance, corrosion, problem diagnosis and remediation during drilling, trouble avoidance, well testing, geophysical logging, and wellbore preservation. Roy Baria, representing the Soultz HDR Project, visited Sandia National Laboratories in January of He gave a presentation entitled Current Status of EGS Technology with a Particular Reference to the European HDR Programme. Roy visited with Sandia staff and exchanged information and ideas pertinent to the geophysical response observed during the Soultz injection testing. 5.3 Highlights of Annex Programme Work for 2005 The highlight of the year centred on the Antalya meeting (the WGC 2005), the many papers and presentations given there, the Annex VII and ExCo meetings in Antalya, and the concert conducted by Ladsi Rybach. 5.4 Continuation of Annex Work Work Plans for Subtask activities are to be the same as at present, with current Subtask Leaders assuming their same positions, Subtask A- Compilation of Geothermal Well Drilling Cost and Performance Information (CFE, Mexico); Subtask B- Identification and Publication of Best Practices Handbook for Geothermal Drilling (Subtask Co-Leaders: CFE, Mexico; Orkustofnun, Iceland); Subtask C- Collaboration on Advanced Drilling (Subtask Leader: Sandia National Laboratories, U.S.A.). A detailed work plan submitted to the GIA Executive Committee at the 14 th ExCo Meeting and was accepted. Details for 2006 work: Subtask 1 General- The plan is to modify this task with a view towards obtaining the essence of the same information. The key modification sought in this time period, based on the realization that operators do not want to openly share costs, is to collect depth-time data, from which, performance may be estimated. Work Plan for CFE is modifying (if necessary) the NEDO data request format and will solicit performance data from operators. The output will be a compilation of data received. Discussions of information, path directions and path forward will be discussed Subtask 2 General- The Participants plan to identify and catalogue the technologies that have been most successful for drilling, logging and completing geothermal wells. A complete Handbook will contain drilling practices for both direct use (low temperature) and electrical generation (high temperature) wells. The complete Handbook will eventually include, but not be limited to: design criteria for the drilling and completion programs, drilling practices for cost avoidance, problem diagnosis and remediation during slimhole drilling, trouble avoidance, well testing, geophysical logging, and wellbore preservation. GIA 2005 Annual Report 43

46 The Handbook outline will be fleshed-out and finalized by incorporating comments from international sources through internet communication. The output will be a first draft of the Handbook Subtask 3 General- The Participants will monitor and exchange information on drilling technology development and new applications in their respective countries. Meetings to share information will be conducted twice annually (at Annex VII meetings for example). The meetings will be used to identify activities and projects for collaboration, and then collaboration plans will be developed. For example, it is anticipated that Participants will identify opportunities to field test in one country a technology/system that is being developed in another participant s country. Solicit, coordinate, and plan international collaborations of technology sharing. Examples of such collaborations include: instrumentation demonstrations and evaluations, information exchanges through visits to foreign sites (ongoing for each year). Participants will attend the High Temperature Electronics (HiTEC 2006) Meeting sponsored by the International Microelectronics and Packaging Society (IMAPS), The Air Force Research Laboratory (WPAFB) and Sandia National Laboratories. It will be held on May 2006, at the Hilton of Santa Fe, 100 Sandoval Street, Santa Fe, NM (contact Randy Norman: ranorma@sandia.gov). The output will be a report to GIA Executive Committee Outputs for 2005 S.J. Bauer visited New Zealand and participated in a workshop entitled Life Cycle Considerations for Geothermal Wells sponsored by the New Zealand Geothermal Association. About forty professionals attended the workshop, with representatives from ten companies, Auckland University and a government laboratory. This workshop supported information exchange on topics of wellbore integrity and lost circulation, as well as other geothermal drilling issues including design criteria for the drilling and completion programs, drilling practices for cost avoidance, corrosion, problem diagnosis and remediation during drilling, trouble avoidance, well testing, geophysical logging, and wellbore preservation. Roy Baria, representing the Soultz EGS Project in Alsace, France, visited Sandia National Laboratories in January of He gave a presentation entitled Current Status of EGS Technology with a particular reference to the European EGS Program. He held discussions with SNL staff and exchanged information and ideas pertinent to the geophysical response observed during the Soultz injection testing WGC 2005 Participation There was significant participation on the part of the Annex at the World Geothermal Congress (WGC) 2005, Antalya, Turkey, held on April 2005: Posters: Two Annex VII Posters were prepared for display, one for the WGC 2005 IEA-GIA booth and the other for the technical poster session. GIA 2005 Annual Report 44

47 The following papers were also presented at the WGC: Wise, J. L., and J. T. Finger (2005) The IEA's Role in Advanced Geothermal Drilling, Technical Poster Session 1 at WGC 2005, Antalya, Turkey, April 24-29, Wise, J. L., and J. T. Finger (2005) IEA/GIA Annex VII: Advanced Geothermal Drilling Technology, displayed in the IEA/GIA Booth at WGC 2005, Antalya, Turkey, April 24-29, Fridleifsson, G. O., W. A. Elders, S. Thorhallsson, and A. Albertsson (2005) The Iceland Deep Drilling Project - A Search for Unconventional (Supercritical) Geothermal Resources, WGC 2005, Antalya, Turkey, April 24-29, Normann, Randy A. (2005) Recent Advancements in High-Temperature, High-Reliability Electronics Will Alter the Geothermal Industry, SAND World Geothermal Congress 2005 Antalya, Turkey, 04/24/2005. Tyner, C. E., J. T. Finger, A. Jelacic, and E. R. Hoover (2005) The IEA's Role in Advanced Geothermal Drilling, WGC 2005, Antalya, Turkey, April 24-29, Wise, Jack L., Mansure, Arthur J., Blankenship, Douglas A. (2005) Hard-Rock Field Performance of Drag Bits and a Downhole Diagnostics-While-Drilling (DWD) Tool, SAND C, World Geothermal Congress 2005 (WGC 2005), Antalya, Turkey, 04/24/2005. Author and Contact S. J. Bauer, Geothermal Research Department, Sandia National Laboratories, Albuquerque, NM, USA; sjbauer@sandia.gov GIA 2005 Annual Report 45

48 IEA GEOTHERMAL R&D PROGRAMME Chapter 6 Annex VIII- Direct Use of Geothermal Energy 6.0 Introduction The Direct Use of Geothermal Energy Annex is the most recent to be included in the GIA. It was initiated on 19 September 2003, when the agreement entered into force. Efforts during 2005 have concentrated on extending the membership of the Annex prior to the start of actual work. Work in the Annex is expected to begin in 2006, and continue through Geothermal energy can be used directly as heat for many applications such as building and district heating, industrial process heating, commercial uses such as greenhouse heating and temperature control of water for fish farming, bathing and swimming, and many other purposes. Many applications are well developed and are economically viable, while others are challenged by implementation difficulties and unfavourable economics. The Direct Use Annex will address all aspects of the technology with emphasis on improving implementation, reducing costs and enhancing use. The objectives of Annex VIII are to: Define and characterize the direct use applications for geothermal energy, with emphasis on defining barriers to widespread application. Identify and promote opportunities for new and innovative applications. Define and initiate research to remove barriers, to enhance economics and to promote implementation. Test and standardize equipment. Develop engineering standards. The Contracting Parties who officially agreed to participate in this Annex as at the end of 2004 were: The Federation of Icelandic Energy and Waterworks (Iceland) and Switzerland. In 2005, Japan, New Zealand USA and Korea confirmed their participation in the Annex, extending the total participation to six countries. Poland is expected to join the Annex as soon as their participation in IEA is confirmed. The Operating Agent is The Federation of Icelandic Energy and Waterworks, Reykjavik, Iceland, and the Task Leader is Einar Gunnlaugsson. 6.1 Subtasks The objectives of this Annex will be achieved through work in five subtasks. The Subtask Leaders remain to be appointed Subtask A- Resource Characterization The aim of this Subtask is to define the available resources in the various participating countries. GIA 2005 Annual Report 46

49 6.1.2 Subtask B- Cost and Performance Database This Subtask focuses on collecting, analyzing and disseminating the characteristic cost and performance data for installations in participating countries, with emphasis on establishing a baseline and then validating the improvements from innovative components and better designs Subtask C- Barrier and Opportunity Identification Based on subtasks A and B, this Subtask will define the barriers which must be overcome to gain widespread use of geothermal heat for various applications. The research activities necessary to take advantage of these opportunities will also be defined and initiated Subtask D- Equipment Performance Validation The work in this Subtask will define and test critical and innovative equipment; such as submersible and line shaft pumps, compact heat exchangers, down-hole heat exchangers, nonmetallic piping, heat pumps and other equipment to characterize performance for various applications and for various geothermal brines. The testing can be at multiple sites or can be round robin Subtask E - Design Configurations and Engineering Standards The work is to develop and characterize standardized designs for various applications, with the goal of minimizing the engineering related to various applications. Develop engineering standards for designs, equipment and controls. 6.2 Funding The collaborative direct use technology research to be carried out under this Annex will involve both cost-sharing and task-sharing. A common fund will be established to cover the special duties of the Operating Agent, including the cost of publishing the reports and summary assessments and the cost of maintaining and distributing the cost database. The costs associated with collecting the information in the database shall be borne by the respective participants. In addition, each participant shall bear all costs it incurs in carrying out the Annex activities, including reporting and travel expenses. The level of effort to perform the work specified in this Annex is estimated to be no more than one-person year per year for each participant. 6.3 Results The primary results of Annex VIII will be improvements in systems and equipment, reduction in cost of delivered heat and an increase in the number of direct use applications. Further, enhanced cooperation between the countries and increased exchange of technical and scientific information within the field of direct use of geothermal energy. Specifically, the results of this Annex shall include: Development of an international database on direct use applications by each of the participating countries. The database will be based on standardized instruments and reporting techniques. Reports on state-of-the-art in direct use of geothermal energy, including areas needing improvement. Cooperative research to accomplish the needed improvements. Participant reports on the status of research and development in new and improved technology that shall be presented in appropriate journals and meetings. GIA 2005 Annual Report 47

50 6.4 Activity in 2005 A kick-off meeting was held on 21 September 2005 at ETH Zentrum, Zürich, Switzerland in connection with the 14 th Executive Committee Meeting. Participants from all the countries except USA attended the meeting. At this meeting data from each country, regarding the 5 subtasks, were introduced and it was decided to work on the following subjects until spring 2006: Subtask A- Resource Characteristics- Temperature Collect data on the temperatures of geothermal manifestations in member s countries and evaluate and compare the data. The evaluation and comparison are to be performed by Chris Bromley Subtask A- Resource Characteristics- Chemistry Collect data on the chemistry of geothermal manifestations in member s countries and evaluate and compare the data. The evaluation and comparison are to be performed by Hirofumi Muraoka and Einar Gunnlaugsson Subtask B and C- Barriers and Opportunities/Cost and Performance Prepare a questionnaire to be sent to the members. The responses and data from members are to be evaluated. Preparation of the questionnaire and the evaluations are to be performed by Yoonho Song and Ladsi Rybach Subtask E. Design Configuration- Engineering Standards Collect available information for different countries, then review and compare. This subject was assigned to John Lund Next Meeting of Annex VIII The next Annex VIII meeting is scheduled to be held in connection with the September 2006 Executive Committee Meeting. There, the initial results of the Subtask investigations will be introduced and a plan made for the next step of Annex VIII Direct use. Author and Contact Einar Gunnlaugsson, Federation of Icelandic Energy and Waterworks, Iceland; einar.gunnlaugsson@or.is GIA 2005 Annual Report 48

51 NATIONAL ACTIVITIES Chapter 7 Synopsis of National Activities 7.0 Introduction This chapter is based on the national activities reports presented in Chapters It provides a brief summary of the geothermal state of affairs in the Member Countries and EC for The Member Country reports include information on: national policy; current status of geothermal energy use, both for electricity generation and direct use; market development; stimulation and constraints; economics; research activities; education and international cooperation. The status of geothermal installed capacity and electricity generated in the Member Countries and the EC in 2005 are provided in Table 7.1. It should be noted that the differences between the GIA values and those of Bertani (2005), c.f. Tables ES1 and 7.1, are most likely attributable to the range in dates that the data represent. The GIA data is for the end of 2005 unless otherwise indicated (see notes to Table 7.1). The geothermal direct use installed capacity and energy used are presented in Table 7.2. Table 7.1. Geothermal power installed capacity and electricity generation in GIA Member Countries and EC for Country Installed Capacity [MW] Annual Electricity Generated [GWh/y] % of National Capacity % of National Energy Australia a Negligible Negligible EC ,219 b - - Germany Negligible Negligible Iceland 232 1,658 na 17 Italy ,022 na 1.9 Japan , Mexico 953 7,298.5 na 3.3 New Zealand 481 2,774 f USA 2,200 c 14, Total e 5, , d 4.8 d a The Australian plant closed in 2005 for upgrading, no power generated; b Estimate using Italy Country Report and Bertani (2005); c Operating capacity; d Average % of 6 GIA Member Countries with non-negligible generation; e Totals exclude EC values; f for 2003 ; Year to March The Context Geothermal energy is used for the generation of electricity and for direct heat applications such as district heating, agricultural drying, industrial processes, green house and aquaculture pond heating, bathing and swimming, and snow melting. At the start of 2005, electricity was being generated from geothermal sources in 24 countries, with a total installed capacity of 8,900 MW e generating about 56,800 GWh/y (Table ES1) (Bertani, 2005). There is considerable potential for a GIA 2005 Annual Report 49

52 growth in geothermal electricity generation and it is possible that 5% of the global electricity could be supplied by As of May 2005, the installed thermal power was estimated to be about 28,269 MW t, with 72 countries reporting the use of 273,372 TJ/y, or 75,940 GWh/y (Table ES3) (Lund, et al., 2005). The installed thermal power nearly doubled between 1995 and 2000, and again between 2000 and 2005 (ibid.), and this significant growth is expected to continue, especially with the rapid worldwide expansion in the use of geothermal heat pumps. In 2005, the worldwide use of geothermal energy for electricity generation and direct uses are estimated to have saved the equivalent of about 40 million tonnes of oil (Mtoe) and reduced CO 2 emissions by about 125 Mt. The GIA Member Countries contribution amounted to approximately 9.8 Mtoe and about 33 Mt of CO 2 emissions, assuming total fuel oil replacement. Table 7.2. Geothermal direct use in GIA Member Countries. Country Installed Thermal Power (MW t ) Annual Energy Used (TJ/y) Australia na na EC 2,059 18,090 Germany 400 na Iceland na 26,000 Italy ,530 Japan* 409 5,139 Mexico 164 na New Zealand 300 7,413 Republic of Korea** Switzerland 609 4,773 USA 1,700 17,940*** Total for GIA 2 > 4,092 > 69,015 na = not available; Using GIA conversion factor: 1 TJ (heat) = 35.2 toe; * 2001; ** 2004; *** Equivalent to 17,000 GBtu; 2 Excluding the EC values. The use of geothermal energy provides many benefits, including: low emissions of pollutants such as particulates and greenhouse gases, especially CO 2 ; less dependence on imported fuels, hence reduced problems caused by their price fluctuations; increased security and more diversity in supply; independence from weather oscillations; effective distributed application in both on and off grid developments, especially useful in rural electrification schemes; and more employment and opportunity for industry and the local population through equipment supply and plant construction and servicing. To maximize these benefits, barriers to geothermal development must be overcome. This requires: an improvement in the understanding of the environmental benefits and how to avoid or minimize the drawbacks; the ability to better characterize geothermal resources; the improvement of technologies for the use of geothermal energy; and the distribution of information about geothermal energy and its benefits to governments, industry, the utilities and financial communities and the general public. Success in these endeavours will make geothermal development more cost-effective, help it acquire a larger part of the marketplace and increase the use of geothermal energy. GIA 2005 Annual Report 50

53 Table 7.3. Equivalent fuel oil and CO 2 emissions savings in Country Equivalent Fuel Oil Savings (Mtoe) Electricity Generation Direct Use Total Savings in CO 2 Emissions (Mt) Electricity Generation Direct Use Australia na na na na na na EC na na na na na na Germany na na na na na na Total Iceland na na 0.6 na na 1.9 Italy na na 1.27 na na 3.6 Japan Mexico (1.85) na (>1.85) (5.6) na (> 5.6) New Zealand (0.7) (0.26) (0.96) (2.27) 0.84) (3.11) Republic of Korea - na (0.01) - (0.02) (0.02) Switzerland USA Total for GIA - - (~ 9.8) - - (~ 33.0) ( ) = Estimated based on Mongillo (2005) where not reported. 7.2 Review and Highlights of National Activities Australia Although Australia s current total geothermal installed capacity is only 0.12 kw, supportive government geothermal legislation has led to an extremely rapid growth in geothermal license applications (70 by the end of 2005), and exploration and proof-of-concept projects. Eleven companies were involved in geothermal investigations at the end of 2005, with four of them at or beyond the drilling stage. The most advanced project, located in the Cooper Basin, has successfully drilled two wells to greater than 4.3 km and reached temperatures of 250 ºC, with one well producing 210 ºC fluid at 25 l/s. The principal geothermal research is aimed at EGS, since current exploration results indicate the necessity for fracture stimulation to create producing geothermal reservoirs. Over US$ 300 M in work programme investment has been committed for and at the end of 2005, 3 geothermal exploration companies were listed on the Australian Stock Exchange with a total market capitalization of about US$ 130 M European Community The European Union has set ambitious targets of 22% of the EU15 s electricity to be generated by renewable energy in 2010, with 12% of their total energy consumption to be provided by renewables. The EC has also developed a new guideline, Sustainable Energy Europe, which includes geothermal targets of 250,000 new geothermal heat pump installations and 25 new electric power plants by Achieving the latter geothermal power station objectives is directly dependent upon the success of the required geothermal drilling that is currently underway. In 2005, four new geothermal projects were begun with EC support: the EGS pilot plant at Soultz sous-forêts; ENGINE, or Enhanced Geothermal Innovative Network for Europe, which aims to coordinate ongoing R&D initiatives for unconventional geothermal resources and EGS; I-GET which endeavours to develop advanced seismic and magnetotelluric methods to improve detection of fracture zones containing fluid; and LOW-BIN, a project working to improve costeffectiveness, competitiveness and market penetration of geothermal energy generation schemes, GIA 2005 Annual Report 51

54 and including the development of a geothermal Rankine Cycle power generator able to operate effectively at temperatures down to 65 ºC Germany The German Federal Government has set the goal of renewable energies contributing 4.2% of the primary energy consumption by 2010 as part of their strategy for sustainable development. The use of geothermal energy for power generation began in Germany at the end of 2003, and about 1.5 GWh/y were generated in The relatively favourable geothermal conditions found at depths greater than about 4 km in certain parts of the country have encouraged the Government to continue funding geothermal investigations at 5 sites in Germany, including drilling and reservoir stimulation and testing. German participation in the Soultz project is also continuing. Industry funded projects are currently active at four locations Iceland Iceland s location on the mid-atlantic Ridge endows it with abundant geothermal resources, which the Government has recognized in its national strategy to harness them whenever possible while respecting the natural and human environment. In 2005, geothermal energy was used to provide space heating to almost 90% of all the homes and to generate 1,658 GWh/y, or 17% of the country s electricity. The favourable price for geothermal electricity in Iceland has led to a rapid growth in demand by intensive industry, hence to recent large-scale geothermal power development. This growing demand has led to the focussing of research on known high temperature geothermal areas in order to categorize them for future electricity development. In addition, exploration is being conducted to locate geothermal resources near districts without space heating. Of particular interest and importance is the Government s decision to participate and provide significant funding (4 M Euros ~ US$ 5 M) for the Iceland Deep Drilling Project (IDDP), which is a research project drilling to depths of 4-5 km and expected to reach ºC supercritical hydrous fluids. Iceland s prestigious United Nations University geothermal school continued into its 27 th year, with high demand continuing Italy Italy has the longest history of geothermal power generation in the world, with its first industrial power plant commissioned in All of Italy s geothermal power generation, amounting to 5,022 GWh/y in 2005, is currently located in Tuscany, where it contributes to 24% of the demand, or 1.9% for the entire country. Italy has been actively implementing its environmental impact reduction programme that includes new designs for the reduction of noise and visual impacts from drilling, fluid gathering systems and power plants; as well as through the installation of its innovative AMIS H 2 S and Hg abatement plants. In 2005, five more AMIS plants were installed in the Larderello/Travale-Radicondoli area. Italy has also pursued the European Directive for promoting the use of renewable resources for electricity generation by setting the portion of renewables generated electricity at 2.35% in 2005, and increasing it by 0.35%/y to A system of Green Certificates also encourages renewable energy generation by making the value of the kwh generated equal to the sum of the base price of the energy plus the market value of the Green Certificate, which was cent/kwh in Japan Though Japan has major geothermal resources, their development has experienced a very difficult time over the past several years. Development for power generation has been tempered because of resource location within or near National Parks and because of the desire to maintain the many developed hot spring resort areas. In addition, geothermal energy was removed from the category of new energy in 1997, so lost a variety of incentives available for other renewables; and finally in 2003, the government terminated all R&D projects. Consequently, Japan s geothermal power generation has been very steady, with an installed capacity of 534 MW e and generation of 3,360 GIA 2005 Annual Report 52

55 GWh/y. On the positive side, the Renewable Portfolio Standard (RPS) law established in 2003, qualified geothermal binary cycle power generation for inclusion, though conventional geothermal generation was excluded. The recent construction of a 2 MW e demonstration binary plant at Hatchubaru, which was approved in 2005 as the first geothermal facility for the RPS Law, hopefully signals an improvement in Japan s geothermal future. In addition, NDEO has continued some geothermal investigations (four in 2005) through its Geothermal Development Promotion Surveys programme that aims to reduce survey risk and thus encourage power generation by the private sector. Japan has been actively supporting international geothermal development, most recently through its work at Yangbajain (China) and in Indonesia Republic of Korea Korea s identified geothermal resources are of the lower temperature variety, mainly hot springs associated with localized, deeply connected fracture systems. However, recent studies have identified a high heat flow anomaly in the southeast of the country. More exciting is the recent successful drilling of a well that freely flows water at 70 ºC and locates new geothermal potential on an island near Seoul. Moreover, booming geothermal heat pump installations have encouraged increased Government R&D funding, mainly for the new Information System of Geothermal Resources Distribution and Utilization Programme. Though geothermal resources are not yet included in the Government s new and renewable energy strategy, which is aimed at increasing new and renewable energy use to 3% by 2006 and 5% by 2011, funding for geothermal R&D has increased annually since 2003 to over US$ 6 M in Mexico In 2005, Mexico had the world s third largest geothermal installed capacity, 953 MW e ; and generated 7,300 GWh/y, or about 3.3% of the nation s total electricity. Currently, several feasibility studies are examining the possibilities for extending Mexico s geothermal production: by replacing 90 MW installed capacity of older units with 125 MW of new units at two fields, utilizing the same quantity of steam; and by adding 150 MW of new capacity at three existing fields. The development of four new fields is also being considered. At present, there are no Government support incentives for geothermal development New Zealand Geothermal energy generation New Zealand has been relatively steady for many years, contributing about 6% of the nation s total. However, there has been a significant increase in industry expenditure on exploration, drilling and development. During 2005, 55 MW of new installed capacity was added at two existing fields, 15 MW of which was a binary plant that uses existing waste water with no addition field production. Geothermal direct use has remained relatively steady at existing facilities, though a new 5-hectare glasshouse was recently commissioned. The energy supply strategy for New Zealand anticipates geothermal energy use to double in the next 8-10 years, and a Government energy outlook document indicates geothermal installed capacity will grow from the current 481 MW e to at least 600 MW e by Government policies currently encourage increased development of renewable resources, including geothermal energy. Government funded research has remained relatively stable at about US$ 1.3 M/y Switzerland The national SwissEnergy programme aims to develop more efficient use of energy including increasing the contribution of renewable energy, reduction of CO 2 and energy saving (see GIA 2004 Annual Report for details). Though there is no geothermal electricity generation in Switzerland at present, a substantial DHM (Deep Heat Mining) project is underway to develop EGS plants in Basel and Geneva within the next 10 years, with funding from local communal and private sources. Switzerland s major activity in 2005 remains in the direct use arena, with an installed capacity of 609 MW t and heat produced 4,773 TJ/y. Most significantly, Switzerland is in GIA 2005 Annual Report 53

56 the forefront of geothermal heat pump (GHP) use, with the steep growth trend continuing- 800 km of total borehole length drilled in 2005! The clear growth in large GHP use (e.g. geostructures like heat piles) led to the development of a design manual published in Government funding for geothermal R&D was about US$ 0.88 M in Work is continuing on the development of a large-scale Swiss Geothermal Resource Atlas United States of America The United States remains the major geothermal developer worldwide, with an operating capacity of 2,200 MW e and generation of 14,400 GWh/y (0.37% of US total) in 2005 (EIA AEO 2006). The US Government s national policy is to improve its energy security by promoting diverse forms of reliable and affordable energy, including geothermal. The passage of the Energy Policy Act of 2005, enacted policies that are expected to encourage rapid expansion of geothermal energy use in the western US, especially in combination with Congress 2004 decision to include geothermal power in the Production Tax Credit. In addition, many states require renewable resources, including geothermal, to provide a certain amount of their power. In 2005, 483 MW e of new power projects in four states were agreed to, not including many other power projects hoping to proceed in seven states. A period of significant growth in new geothermal power and direct use projects is now expected, with estimates of installed generating capacity ranging from 6,640 MW e by 2025 to 8,300 MW e by Direct use has also seen major growth, with geothermal used in 44 states, amounting to an installed capacity of 1,700 MW t and use in excess of 17,900 TJ/y in Geothermal heat pump use is steadily increasing with units installed in all US states. The US Department of Energy (DOE) works in partnership with US industry to conduct geothermal research and provides most of the research funding, which amounted to about US$ 25.6 M in Research is aimed at technology development (examines underlying technology that supports deployment of geothermal energy) and technology application (transfers new/improved technology to private sector for practical application). The US Geological Survey, Bureau of Land Management and US Navy are also involved in various ways with geothermal development. The US has a wide ranging outreach and education programme, aimed at providing accurate information on and promoting geothermal energy, and interpreting geothermal research and developing educational products, mainly implemented through the Geopowering the West programme. The US DOE also supports university research, which provides educational and training opportunities for students. 7.3 References Bertani, R. (2005) World Geothermal Generation : State of the Art. Proc. World Geothermal Congress 2005, Antalya, Turkey, April EIA AEO (2006) Annual Energy Outlook Energy Information Administration, USA. Lund, J.W., Freeston, D.H. and Boyd, T.L. (2005) Direct application of geothermal energy: 2005 worldwide review. Geothermics, vol. 34, Mongillo, M.A. (2005) Savings factors for geothermal energy utilization. IEA Geothermal Implementing Agreement document, January Author and Contact Mike Mongillo, IEA-GIA Secretary, GNS Science, Wairakei, New Zealand; mongillom@reap.org.nz GIA 2005 Annual Report 54

57 NATIONAL ACTIVITIES Chapter 8 Australia 8.0 Introduction The only geothermal energy being used in Australia currently emanates from a 120 kw geothermal energy plant located in Birdsville, Queensland. Investment to explore for, and demonstrate the potential of geothermal energy in Australia is, however, on the rise. Although still to be commercialised, significant progress in the geothermal energy has been achieved by the Australian sector during There has been a dramatic increase in the number of investors, geothermal licences and licence applications in 2005 (Figure 8.1). This progress is founded on major advancements in realising the geothermal potential through drilling and flow testing programs primarily in South Australia in the term The strength of the Australian geothermal sector can be gauged by the increased number (11 at year-end 2005) of companies targeting at least 3 types of geothermal resource: Hot Rock (HR) radiogenic granites targets below sedimentary basins (e.g. Geodynamics, Petratherm, Greenrock, Geothermal Resources, Eden Energy, Proactive Energy, Osiris, KUTH Exploration, Hot Rock Energy); hydrothermally heated water in sedimentary reservoirs in proximity to recent (4000 to 5000 years bp) volcanic centres (e.g. Scopenergy, Geothermal Resources, Osiris Energy); and the extraction of heat from waters within proven aquifers in the Great Artesian Basin (Pacific Hydro). This increase in interest is largely in response to the encouraging results emerging from the implementation of legislation providing clear entitlements to investors to explore for and sell geothermal energy in a number of the states; and the recognition of geothermal resource potential from pre-existing borehole data. 8.1 Exploration and Proof-of-Concept Projects A summary of exploration and proof-of-concept projects that have reached the drilling phase by year-end 2005 are summarised below. These include Geodynamics Limited proof of concept project in the Cooper Basin. Others including Petratherm, Greenrock Energy and Scopenergy also entered the drilling phase of demonstrating the prevalence of geothermal energy in Geodynamics The most significant advancement in terms of realising the potential for HDR energy is Geodynamics fracture stimulation and flow testing at its Habanero Project in the Cooper Basin. Indeed, the Habanero Project was the first and remains the most advanced Hot Rock proof of concept development in Australia. Geodynamics has achieved first mover advantages through its extensive Hot Rock energy exploration and appraisal programs and is the only proponent with a proven to be productive geothermal resource in its tenements, having successfully drilled 2 wells to depths of 4,358 m and intersecting naturally fractured granites with the proven capacity to sustain flows of very hot waters to surface without appreciable pressure depletion. Geodynamics has successfully hydraulically fracture stimulated the natural fracture system within these granites. GIA 2005 Annual Report 55

58 Figure 8.1 (a). Geothermal licences, applications and gazettal areas as at December Figure 8.1 (b). Heatflow map of Australia. Courtesy of Prame Chopra, ANU. of the already high permeability in this zone. This test represents the first Hot Fractured Rock (HFR) flow in Australia In May 2005 Geodynamics announced that Habanero 2 well flowed at a rate in excess of 25 l/sec (13,586 barrels of water per day) from reservoirs at 4,300 meters below ground level at Kbars (13,000 pounds per square inch) and 250 C. Geothermal brines flowed to surface at temperatures of approximately 210 C, equivalent to 15 MW th (just one well s flow). In October GIA 2005 Annual Report 56

59 2005 the hydraulic stimulation through Habanero resulted in a 52% enlargement of the Bottom Zone reservoir and a further significant improvement To facilitate the conduct of a circulation test through the Bottom Zone reservoir, Geodynamics plan to drill a new sidetrack as the current connection between Habanero 2 and the reservoir is essentially blocked off. This sidetrack will commence in March A flow test between the two wells is planned as a further step towards demonstrating commercial viability. Geodynamics has also secured exclusive regional rights to the Kalina power cycle technology, which is a more efficient technology for converting the geothermal heat to electricity and has the potential to lower power generating costs by 25%. The development of the fluid filled fracture network has exceeded expectations and securing the Kalina Cycle technology should allow Geodynamics proof-of-concept pilot project to progress to supply power to Moomba from a 2-3 MW e demonstration plant via a low voltage power line from Habanero, subject to successful flow testing between Habanero 1 and 2 wells. This will be an important milestone for the commercialisation of Hot Dry Rock derived geothermal energy in Australia and the stepping stone to realising significant renewable energy reserves to meet Australia s future energy requirements Petratherm Petratherm has drilled two wells to establish thermal gradients down to about 600 m above exceptionally high heat producing granites in Southern Australia. Results from both wells were encouraging, with the Callabonna and Paralana sites respectively exhibiting 68 and 81 C per kilometre thermal gradients. Petratherm next plans to drill its first injection well at Paralana to approximately 3.5 km depth where temperatures are expected to exceed 220 C Green Rock Energy Green Rock drilled Blanche No 1 to 1,935 m (718 m of sediments and 1,216 m of homogenous hot granite) in The target granite is interpreted to persist to depths of 6,000 m over an area of about 400 km 2 and represents a potential geothermal resource in excess of 1,000 MW e. Cores and wireline logs from Blanche No 1 suggested natural fracture exist. Greenrock plans to drill at least one deep well in 2006 to establish the basis for flow tests. A summary of the activities of the twelve Australian geothermal explorers at year-end 2005 is provided as Attachment Highlights and Achievements Highlights and achievements to end 2005 are summarised as follows: At year-end 2005, eleven companies had applied for a total of 70 geothermal licence areas in Australia; 64 or 91% of the areas applied for are located in South Australia. A further 5 geothermal applications have been lodged in New South Wales and 1 in Tasmania. Of these 70 applications, to year-end 2005, 58 Geothermal Exploration Licenses (GELs) have been granted in South Australia and 4 Exploration Licences for geothermal exploration (ELs) have been granted in New South Wales. Over AUS$410 million (US$307 million) in work program investment has been committed for the period This figure excludes capital expenditure associated with demonstration power plants. Strong interest expressed by yet more new entrants into the geothermal sector bodes well for continued growth and competition. Passage of legislation in other Australia jurisdictions will also stoke the sectors growth. 6 tenements were released for tender in Queensland in October GIA 2005 Annual Report 57

60 31 bid areas are forecast to be released over the entire state of Victoria in At year-end 2005, 3 geothermal explorers were listed on the Australian Stock Exchange (ASX) Geodynamics, Petratherm and Green Rock Energy. Market capitalisation for these 3 geothermal explorers as at 31 December was about AUS$172 million (US$129 million). At least four geothermal energy companies plan ASX listings in Encouraging results were achieved in well (drilling and/or flow testing) programs in a variety of geological settings by Geodynamics, Petratherm, Greenrock Energy and Scopenergy. Geodynamics was very successful in its fracture stimulation of wells in the Cooper Basin, making considerable progress in the proof of concept phase of their Habanero project (Figure 8.2). Following South Australia s lead, Queensland, Victoria, Western Australia and the Northern Territory implemented reviews of geothermal legislation (ahead of gazettal of prospective geothermal acreage). Australian Federal and State grants totalling ~AUS$9.5 million (US$7.1 million) were awarded to 6 geothermal companies in 2005 (to progress geothermal exploration and development projects). Strong public interest and investment was sustained in ASX-listed hot rock companies, with the majority of geothermal capital raisings oversubscribed. Revitalisation of Australia s GIA membership with 21 participating organisations including representatives from, industry, academia and State and Federal governments (Attachment 2). Figure 8.2. Well Habanero 2 Steam Separator, April 2005, Cooper Basin, Australia. The well is flowing at 12 kg/sec with a wellhead temperature of 160 o C. (Photo by Ralph Weidler of Q-Con GmbH; courtesy of Geodynamics Limited) GIA 2005 Annual Report 58

61 8.2 National Policy Strategy There has been a steady increase in all forms of renewable energy over the period largely due to government activities. In 2000 the Australian federal parliament passed the Renewable Energy (Electricity) Act. This Act saw the introduction of the Mandatory Renewable Energy Target (MRET) Scheme that requires an additional 9,500 GW of renewable electricity by the year 2010 and which includes geothermal energy. This equates to approximately 2% of Australia s annual electricity consumption being sourced from renewable technologies. The MRET Scheme operates through a system of tradable Renewable Energy Certificates (RECs) that are created by renewable energy generators at the rate of 1 REC for each MWh of electricity generated from an eligible renewable source. In 2004 the Australian Federal government reaffirmed the 2% MRET target and released a new energy policy Securing Australia s Energy Future. Included in this policy was the introduction of the Low Emissions Technology Development Fund (LETDF) that will provide AUS$500 million (US$375 million) to companies that can demonstrate new technologies that will significantly reduce long term green house gases. Geothermal energy and in particular, HDR, has been identified by the federal government as a technology suitably placed to benefit from this fund. A number of additional renewable energy grants are outlined in Section 8.4. The energy White Paper, released in 2004, included a statement that Australia should seek to be a Market Leader (highest category of involvement) in hot dry rocks technology ( Legislation and Regulation Four states (South Australia, New South Wales, Queensland and Tasmania) have legislation in place to control geothermal exploration and development. Geothermal energy exploration in South Australia falls under the Petroleum Act, 2000 whilst in New South Wales and Tasmania it is governed by the Mining Act, 1992 and Mineral Resources Development Act, 1995 respectively. Legislation for the production of geothermal energy in Queensland will be progressed in Queensland is (thus far) the only state to have developed stand-alone legislation for geothermal energy exploration under the Geothermal Exploration Act, The remaining onshore Australia jurisdictions (Western Australia, Victoria and the Northern Territory) plan to follow Queensland s lead, and are in the process of developing stand-alone legislation and regulations. Of these, the Geothermal Energy Resources Act, 2005 has been passed in Victoria and the Regulations are in preparation with both pieces of legislation expected to come into operation by April The geothermal legislation and regulations are intended to apply to high-end scale geothermal operations. Under the new GE regulations, exploration permits are not required where the geothermal resource is less than 70 ºC or less than 1000 m depth. Low-end operations operate under existing environmental, water and planning laws. The Western Australian Department of Premier and Cabinet, Greenhouse Policy Unit, together with Petroleum and Royalties Division, of the Department of Industry and Resources is preparing legislative drafting instructions to enable geothermal energy and geothermal energy resources to be explored and produced in Western Australia. It is contemplated that the Petroleum Act 1967 (Western Australia) will be amended to enable the regulation of geothermal resources, in a similar manner to the approach taken by Primary Industry and Resources, South Australia. The Northern Territory expects to develop stand alone legislation for both geothermal exploration and development tenure that will be administered by the Titles section within the NT Department of Primary Industry, Fisheries and Mines and is expected to be operative in GIA 2005 Annual Report 59

62 8.2.3 Progress Towards National Targets for Renewable Energy and Emissions There has been no shift in the Federal Government s MRET of 9,500 GW of new renewable electricity by the year Government Expenditure on Geothermal Research and Development Federal and state government expenditure on geothermal research and development, including grants to industry, totalled just over AUS$9.5 million in 2005 (Table 8.1). Detailed descriptions of these grants are outlined in Section 4 under Support Initiatives and Market Stimulation Incentives. Federal government grants- Geodynamics Ltd was awarded a AUS$5 million Renewable Energy Development Initiative (REDI) grant from the Federal government in December 2005 for the demonstration HFR power plant to be constructed near Innamincka in the Cooper Basin, South Australia. Scopenergy Ltd also secured a AUS$4 million REDI grant for its Limestone Coast Geothermal Project in the southeast of South Australia. This project, which has the potential to reduce ~ 40 Mt of carbon dioxide will focus on proving and commercialising its potentially large scale, geothermal power project using conventional geothermal methods for the production of baseload renewable electricity. The grant will assist in financing 3-D seismic and drilling that are critical to proof of concept. Scopenergy and Snowy Hydro Limited have entered into a long-term Power Purchase Agreement for 40 MW of electricity to be generated from the project. Table 8.1. Recipients of Federal and State funded grants for geothermal R&D. Grant Recipient Project Amount ($AUS) REDI REDI Geodynamics Ltd Scopenergy Ltd Habanero Project, Cooper Basin, SA Limestone Coast Geothermal Project, SA $5,000,000 $3,982,855 PACE Petratherm Ltd Paralana Geothermal Project, SA $ 140,000 PACE PACE PACE Scopenergy Ltd Geothermal Resources Ltd Green Rock Energy Ltd Limestone Coast Geothermal Project, SA Curnamona Geothermal Project, SA Olympic Dam Geothermal Project, SA $ 130,000 $ 100,000 $ 68,000 PACE Eden Energy Ltd Witchellina Project, SA $ 21,000 State government grants- South Australia- A total of AUS$459,000 in South Australian PACE drilling grants has been provided to five companies exploring for geothermal energy (Table 8.1). These grants assist in addressing critical uncertainties in frontier geothermal exploration regions and include partial funding of drilling, temperature logging and thermal conductivity analyses. The South Australia Department of Primary Industries and Resources (PIRSA) also allocated AUS$50,000 to the Australian School of Petroleum at University of Adelaide to undertake a GIA 2005 Annual Report 60

63 research study exploring the likelihood of enhanced seismic hazard in Australia s Cooper Basin petroleum province as a result of geothermal energy production in the region. The collaborative study, led by Dr Suzanne Hunt, will assess anthropogenic seismic hazard assessment through predictive modelling of local stress change resulting from Hot Fractured Rock (HFR) geothermal energy operations. The one year study will be completed in June Victoria- The Victorian Department of Primary Industries (Vic DPI) spent AUS$35,000 on validation and analysis of existing borehole temperature database by Geoscience Victoria in preparation for a geothermal acreage release in April 2006 that will cover the entire state of Victoria and comprises 31 blocks (up to 10,000 km 2 ). Sustainability Victoria commissioned a review of information on geothermal resources in Victoria that was undertaken by Sinclair Knights Mertz (SKM) in conjunction with Monash University. The final report is dated February 2005 although the report has not been released to the public. Western Australia- A report on the energy needed for minerals development in the South West of Western Australia (Sleeman and Goodall, 2005) included a recommendation that the Geological Survey of Western Australia investigate the potential of geothermal energy from hot dry rocks. It is planned to conduct a preliminary study in Industry Expenditure on Geothermal R&D All industry field expenditure is classed as R&D and is estimated at AUS$26.1 million for the calendar year This represents an increase of AUS$8.5 million (up 48%) from the previous year. Historical, current and projected expenditure for 2006 are highlighted in Figure 8.3. Growth in geothermal licences and expenditure in Australia to 2006 Expenditure AUD$million Year Forecast No. of GEL and GELA Annual Expenditure Cumulative Expenditure No. GEL & GELA Figure 8.3. Geothermal licence applications and exploration expenditure, 2000 to 2006 (source: PIRSA). GIA 2005 Annual Report 61

64 8.3 Current Status of Geothermal Energy Use in Electricity Generation Geothermal energy is currently produced at one small binary power station at Birdsville in western Queensland, which is supplemented by diesel-powered generators. The fluid is 98 o C and derives from the Great Artesian Basin that overlies the Cooper Basin. The gross capacity of the plant is 120 kw and has 40 kw parasitic losses, which equates to a net output of 80 kw. The plant was shutdown from December 2004 to December 2005 for upgrading to meet compliance of Australian Standards regarding handling of isopentane but is now operating. Total power generation in 2004 was 1,756,009 kwh of which 520,116 kwh was provided by the geothermal power plant. There were no new developments in Direct Use Direct use of geothermal waters continues to be an important source of energy in the city of Portland in western Victoria. Water pumped from a 1400 m deep bore at a temperature of 58 C at rates of approximately 60 Litres per second with a nominal capacity of 3600 kw and is used to heat many of the municipal buildings and public facilities. Geothermal waters are also used for spas at Moree, near Barradine and at Lightning Ridge in New South Wales and at two developments in Victoria on the Mornington Peninsula, south of Melbourne. There are no available estimates of the amount of energy being produced at these locations. There is a plan for development of another (unrelated) spa resort in Gippsland, Victoria. Ground source heat pumps are also finding increased use in Australia in both commercial and residential applications. 8.4 Market Development and Stimulation Support Initiatives and Market Stimulation Incentives There are a number of Federal and State government support initiatives designed to accelerate commercialisation of renewable energy technologies, including geothermal energy. For more information on the following support programs visit the site: Start Program The R&D Start program was introduced in 2002 by the Federal government to assist Australian industry to undertake research and development and commercialisation. Geodynamics was granted AUS$5,000,000 from this fund in Renewable Energy Certificates (RECs ) The MRET Scheme operates through a system of tradable RECs that are created by renewable energy generators at the rate of 1 REC for each MWh of electricity generated from an eligible renewable source. Renewable Energy Development Initiative (REDI) Program This Federal government initiative is a competitive, merit based grants program supporting renewable energy innovation and its early stage commercialisation. The AUS$100 million program commenced in 2003 and will provide individual grants from AUS $ to AUS $5 million over seven years. Geodynamics Ltd and Scopenergy Ltd were awarded REDI grants of AUS $5million and AUS $4 million respectively in December Low Emissions Technology Demonstration Fund (LETDF) The AUS $500 million LETDF is a merit based programme designed to demonstrate break-through technologies with significant long term greenhouse gas reduction potential in the energy sector. Key criteria for award is the potential to reduce Australia s total carbon dioxide emissions by at least 2%. The Fund was announced by the Federal government in June 2004 and will leverage at least AUS $1 billion in additional private investment in new low emission technologies. The Fund will operate over the period GIA 2005 Annual Report 62

65 to Geodynamics has announced that it will submit an application for the March 2006 funding round to assist with financing of an initial large-scale commercial HFR power plant in the Cooper Basin. Renewable Energy Equity Fund (REEF) The REEF program was introduced by the Federal government in 1997 and is a specialist renewable energy technology research fund. PACE the Plan for Accelerating Exploration was launched in April 2004 by the South Australian government to fund collaborative exploration drilling programs that will address critical uncertainties in the resources sector including the mineral, petroleum and geothermal industries. The AUS $22.5 million program (of which AUS $10 million has been designated for direct drilling initiatives) will be operative until A total of AUS $459,000 in South Australian PACE drilling grants has been provided to 5 geothermal explorers: Scopenergy (AUS $130,000), Petratherm (AUS $140,000), Green Rock (AUS $68,000), Geothermal Resources (AUS $100,000) and Eden Energy (AUS $21,000). Renewable Energy Support Fund Sustainability Victoria offer a Renewable Energy Support Fund that helps to pay 50% of the capital cost for new operations (such as fish farms, horticulture & swimming pool heating) Development Cost Trends Drilling costs remain high due to difficult drilling conditions associated with overpressured granites and equipment failures. The vast distances between geological provinces, coupled with a critical shortage of drilling rigs, has seen high costs for mobilisation and lengthy delays in securing a rig. Substantial increases in the cost of diesel fuel and steel casing has also contributed to elevated development costs. 8.5 Development Constraints Figure 8.4 illustrates the current costs of power generation from alternative fuels, including geothermal energy. At this point in time, coal and gas are the most competitively priced fuels for electricity generation. Whilst geothermal energy resources in Australia have vast potential, it is not yet price-competitive, and remains to be demonstrated to be economic at price levels that could be realised with the addition of costs to constrain greenhouse gas emissions in the cost of electricity from fossil fuels. 8.6 Economics Trends in Geothermal Investment Funding from the general public has continued to increase in 2005, with Geodynamics, Petratherm and Green Rock Energy raising AUS$20.78 million from public share subscriptions during the year. As at 31 December 2005, the market capitalisation of these three companies amounted to about AUS $172 million (US$129 million). There are strong indications that several geothermal explorers will list on the Australian Stock Exchange in Trends in the Cost of Energy Coal-fired electricity costs remain one of the lowest in the world so new renewable technologies find it difficult to compete. However, if we assume geosquestration costs of AUS $66/tonne CO 2 (US$50/tonne), geothermal energy becomes competitive in the energy market. A comparison of power generation costs per MWh versus CO 2 emissions kg/mwh in Australia places geothermal power favourably ahead of nuclear, wind, gas, brown and black coal (assuming you include geosequestration costs) at AUS $58/MWh (Figure 8.4). GIA 2005 Annual Report 63

66 USA $ $7.50 $15 $22.50 $30 $37.50 $45 $52.50 $60 $67.50 $75 Brown Coal PF 420MW (CF85%) 1400 Brown Coal PF 420MW (CF85%) + GS Black Coal PF 420MW (CF85%) CO2 emissions kg/mwhr Black Coal Brown Coal Black Coal Gas Black Coal PF 420MW (CF85%) + GS Black Coal Supercritical 860MW (CF85%) Gas Combined Cycle 130MW (CF65%) Gas Combined Cycle 250MW (CF65%) Gas Comb d Cycle 250MW (CF65%) + GS Gas Combined Cycle 400MW (CF60%) Wind 90 MW (CF35%) Geothermal 550 MW (CF70%) Brown Coal + CO2 capture 200 Gas + CO2 capture Black Coal + CO2 capture Geothermal Wind 0 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 AUS Generation Cost AUS$/MWhr COMBUSTION CO2 EMISSIONS vs LONG RUN COST GS = geosequestration Efficiency Frontier no GS Figure 8.4. Electricity generation sources and technologies CO 2 emissions vs. long run marginal costs. All costs are in AUS$ (source: PIRSA, 2005). 8.7 Research Activities Focus Areas The principal focus area of research in Australia relate to Enhanced Geothermal Systems (Annex III) associated with the fracture stimulation of granitic basement rocks in the Cooper Basin and related research into anthropomorphic seismicity associated with these high energy fracture stimulation. There is also a key focus in establishing more accurate heat flow maps of Australia through acquisition of thermal conductivity data and refined gridding techniques Government Funded Australian National University Australian Capital Territory Research has focused on development of a new database of temperature measurements made in 5722 wells across Australia that has been used to construct improved maps of the spatial distribution of temperature in the Australian crust. This work has been undertaken by Dr Prame Chopra and Fiona Holdgate. The new database, Austherm04, builds upon the earlier work of GIA 2005 Annual Report 64

67 Somerville et al. (1994) by greatly improving data quality control and by including temperature data from a further 1430 wells. Whilst there has been some enhancement of the overall spatial coverage when compared with the earlier work, the bulk of the new data are still largely clustered within the same provinces that dominate the Somerville et. al. dataset. As a result, data distribution across the continent still tends to be rather patchy and irregular with some regions well represented and others not. An Arc/Info GIS coverage has been built from the Austherm04 database. The crustal temperature maps produced in this study reveal large spatial variations in temperature across continental Australia. Lowest temperatures occur where basement is exposed at the surface such as in the Yilgarn Block, Gawler Craton and Lachlan Fold Belt. High temperatures are associated with thick sedimentary basin cover and the inferred presence of high heat production granites under the sedimentary sequences. Particular examples include the Cooper-Eromanga, Macarthur and Canning Basin regions. Other smaller areas of relatively elevated crustal temperature that may represent future hot dry rock targets include parts of the Sydney, Perth and Murray Basins. Whilst representing significant improvements over the previous Somerville et al. map, the new crustal temperature maps continue to be influenced by artefacts caused by the strongly heterogeneous spatial distribution of the subsurface temperature data across continental Australia. More sophisticated geostatistical methods and analysis on a province by province basis may offer some improvements but further temperature exploration data will probably be required to significantly improve the resource analysis. University of New South Wales The School of Petroleum Engineering at the University of New South Wales (UNSW) has made a strong commitment to the development of renewable energy and has been actively participating in developing technology for the exploitation of geothermal energy in Australia since the 1st HDR Conference held in Canberra in Together with Geoscience Australia, it actively participated in collecting geophysical and temperature data from different parts of Australia and prepared a heat map of Australia in Following this it carried out a major study to characterise temperature, stress and natural fracture system of the basement in the Cooper Basin. As part of this study the School also developed an innovative fracturing technology for the development of geothermal reservoir. This study was primarily funded by ERDC and industry. To commercialise the technology it formed a geothermal company, Scopenergy Ltd, in January 2001 (currently owned by Eureka Capital Partners) who hold the major geothermal licences in Mount Gambier region of South Australia. The School of Petroleum Engineering is working together with Scopenergy on a number of issues: (1) characterisation of geothermal reservoirs in particular in sedimentary rocks, (2) geothermal reservoir development by hydraulic fracturing and (3) fluid flow and production estimation in fractured reservoirs. The program is being funded by UNSW, Australian Greenhouse Office (AGO) and industry. In 2005, the School developed a numerical simulation technique for characterisation of fracture system in geothermal reservoirs adopting a geostatistical approach that incorporated field data. Initial results are very encouraging and the School is currently working to advance this work. The School has also developed a numerical geothermal reservoir simulator to estimate hot water recovery. An important feature of this model is that it simulates fracture system with spatial distribution and considers fluid flow between fracture and matrix. Australian School of Petroleum, Adelaide University South Australia The South Australia Department of Primary Industries and Resources (PIRSA) allocated AUS $ in June 2005 to the Australian School of Petroleum at University of Adelaide to undertake a research study exploring the likelihood of enhanced seismic hazard in Australia s Cooper Basin GIA 2005 Annual Report 65

68 petroleum province as a result of geothermal energy production in the region. The collaborative study, led by Dr Suzanne Hunt, will assess anthropogenic seismic hazard assessment through predictive modelling of local stress change resulting from Hot Fractured Rock (HFR) geothermal energy operations. This work will be pursued in collaboration with the International Energy Agency (IEA) who has officially stated that as part of a cooperative effort in addressing induced seismicity associated with enhancing output of geothermal systems: Participants will pursue a collaborative effort to address an issue of significant concern to the acceptance of geothermal energy in general but Enhanced Geothermal Systems (EGS) in particular. The issue is the occurrence of significant seismic events in conjunction with EGS reservoir development or subsequent heat extraction. Outputs from the project will include the development of numerical models to assess permanent impact of the developed HFR reservoir structure on the local in-situ stress field and also the development of finite difference models of wellbore and completion to assess the likelihood of damage caused by a seismic wave hitting a wellbore at various depths. The one year study will be completed in June Monash University Victoria Geothermal research has focussed on measuring and mapping heat flow and temperature distribution in the crust across SE Australia during Geothermal Education Dr Graeme Beardsmore (Monash University, Victoria) ran a 5-day Introduction to Geothermal Energy course in 2005 through the VIEPS coursework program, and will do so again in June International Cooperative Activities Australia is a member of the IEA Geothermal Implementing Agreement. In addition, Geodynamics Limited and the Australian National University have formal agreements with Japanese researchers in geothermal energy. There are also linkages with the French Bureau de Recherches Geologiques et Minieres (BRGM) through Intrepid Geophysics who are a member of Australia s GIA. BRGM have expertise in the integration of state of the art rapid 3D geological modelling with geothermal temperature and thermal capacity latent in radiogenic granites. Petratherm is currently engaged in Hot Rock energy research with BRGM References Chopra, P.N. (2005) Status of the Geothermal Industry in Australia, Proceedings World Geothermal Congress 2005, Antalya, Turkey April Chopra, P.N. and Holdgate, F. (2005) A GIS Analysis of Temperature in the Australian Crust. Proceedings World Geothermal Congress 2005, Antalya, Turkey April Sleeman, R., and Goodall, N. (2005) Energy for Minerals Development in the South West coast region of Western Australia: Western Australia Department of Industry and Resources, 20p. Tran, N.H., Chen, Z. and Rahman, S.S., Practical Application of Hybrid Modelling to Naturally Fractured Reservoirs. Journal of Petroleum Science & Engineering, 2005f (Article in Press). Tran, N.H., Chen, Z. and Rahman, S.S.(2005) Integrated Conditional Global Optimisation for Discrete Fracture Network Modelling. Journal of Computers & Geosciences, 32(1), GIA 2005 Annual Report 66

69 Teimoori, A., Tran, N.H., Chen, Z. and Rahman, S.S.(2004) Simulation of Fluid Flow in Naturally Fractured Reservoirs with the Use of Effective Permeability Tensor. Geothermal Resources Council Transactions, 28, Teimoori, A., Chen Z., Rahman, S.S. and Tran, T. (2005) Effective Permeability Calculation using Boundary Element Method in Naturally Fractured Reservoirs. Petroleum Science and Technology, 23(5-6), Acknowledgements Information on the Birdsville geothermal power station was kindly provided by David Smyth and Bashir Gabriel of Ergon Energy Corporation Ltd. Author and Contact Barry Goldstein, Minerals and Energy Resources, South Australian Department of Primary Industries and Resources, Adelaide, South Australia, Australia; GIA 2005 Annual Report 67

70 Attachment 1 Australian Geothermal Licence Holders (Alphabetical Order) Eden Energy Ltd is a new diversified clean energy company seeking listing on the Australian Stock Exchange in early Eden has interests in hydrogen storage and transport fuel systems, including the low emission Hythane hydrogen-methane blend, a revolutionary cryogenic storage and superconducting magnetic electrical storage device, coal seam and abandoned mine methane, conventional gas, low temperature pyrolysis research into hydrogen production and geothermal energy production. All these aspects of Eden s business are part of an integrated strategy to become a major global participant in the alternate energy market, particularly focussing on the clean energy transport market, producing hydrogen without any carbon emissions, transporting the hydrogen to markets and providing the engines to power hydrogen-based transport and energy solutions. Eden is exploring for geothermal resources in a number of target areas: 1 At Witchellina, northwest of Leigh Creek; 2 North of Renmark, on the Murray River; 3. Around Moomba in the Cooper Basin, adjacent to Geodynamics and at Bollards Lagoon; and, 4. At Mungeranie, in the southwest Eromanga Basin region on the Birdsville Track. The company is pursuing a prospecting-style strategy, aiming to test a number of different geothermal target types, ranging from the deep hot fractured granite model near Moomba and at Mungeranie, relatively shallow (2-3 km) heat sources associated with buried radiogenic iron oxide and granite at Witchellina and enhanced permeability zones in the Renmark Trough associated with elevated heat flows. If successful, Eden will target electricity markets and clean hydrogen production. Eden Energy was the recipient of a $21,000 PACE 2 grant in July For more information, visit Green Rock Energy Ltd is a public company listed on the Australian Stock Exchange which is undertaking the evaluation and development of a hot dry rock ( HDR ) geothermal power plant on its geothermal exploration licences in central South Australia in preparation for the construction of power plants with a base load electricity capacity of no less than 100 MW. Green Rock Energy holds 7 SA GELs. The Olympic Dam HDR Geothermal Energy Project is located within 10 kms of BHP Billiton's world class Olympic Dam copper and uranium mine and only 5 kms from a high voltage power transmission line connected to the national power grid which supplies electricity to eastern Australia's major cities. Green Rock drilled Blanche No 1, its first exploratory diamond geothermal well, in the second half of The well was drilled to a depth of 1,935 m through 718 m of sediments and 1,216 m of homogenous hot granite. The temperature measured was 85 C at 1.9 km depth. This granite body is interpreted to persist to depths of 6,000 m near Blanche No. 1 and cover an area of about 400 square kms of the GELs and represents a potential geothermal resource in excess of 1,000 MWe. Studies are underway into the key factors that determine the quantity of heat that can be recovered via water circulating through the hot rocks, and thus the amount of electricity that can be generated. This water circulation requires the forcing open of a network of fractures in the hot granites by injecting water under pressure. Cores from Blanche No 1 exhibited horizontal fracturing and logging suggested other natural fracture orientations are present. The Company hopes to commence the drilling of the first of two deep wells in the second half of 2006 to enable a water circulation system to be established. Green Rock is the recipient of a $68,000 Round 3 PACE grant for the Olympic Dam Geothermal Energy Project and the Blanche Prospect. For more information, visit Geodynamics Ltd has first mover advantage in Australia with its Habanero project in the Cooper Basin in NE South Australia and is the only proponent with a proven resource in its tenements. All other proponents in Australia still have to prove geothermal resources exist in their tenements. Geodynamics Proof of Concept project (Habanero) is located where rocks are hottest in the Cooper Basin (approximately 300 ºC at 5 km depth). The company has created the world s largest underground heat exchanger by high pressure water injection in two stages in 2003 and High GIA 2005 Annual Report 68

71 rates of injectivity into the heat exchanger indicate the presence of large areas of low impedance reservoir where the rock temperature is 250 ºC (4.3 km). After successful completion of the Habanero 2 well, flows of up to 20 l/sec and output temperatures of 210 ºC in 2005, a 6 week circulation test will complete Proof of Concept in The potential area of accessible hot rocks extends for more than 1000 km 2. The great distances from electricity markets are not considered a problem since external consultants reports indicate transmission costs of less than 0.8 cents per kilowatt hour to the national grid. Geodynamics was the recipient of a $6.5 million START grant in and a $5 million REDI grant in The company aims to build a 2-3 MW demonstration plant using Kalina Cycle technology to supply electricity via a 60 km power line from its Habanero project site to Moomba. For more information visit Geothermal Resources Ltd holds two hot dry rock geothermal exploration projects located within high heat flow areas of South Australia. In both cases the model is based on hot radiogenic granites that are buried by a sufficient thickness of insulating sediments. The Frome project lies within the Mesoproterozoic Curnamona Craton, which is characterized by some of the most radiogenic granites in Australia, associated with numerous historic uranium occurrences. In the project area a large body of granite, evidenced by a regional gravity low and non-reflective seismic responses, is interpreted to lie beneath 2-4 km thickness of younger sedimentary cover rocks. Geothermal Resources has been awarded a $100,000 PACE 3 grant by the South Australian government to assist with deep drilling for the purposes of obtaining reliable heat flow measurements over the interpreted buried granite complex. The Crower project situated in the South East lies along the northern onshore margin of the Otway basin where early Palaeozoic granites of the Padthaway Ridge dip beneath onlapping Jurassic to Cretaceous sediments. Rapid changes in thickness of the sediments caused by basement faulting and rifting at the time of continental break up provide the opportunity for locally elevated geothermal gradients and optimal depths of burial. Both projects are well located with respect to existing power grids and even modest geothermal fields could be quickly brought into production to meet the rising demand for clean renewable energy. Geothermal Resources is currently in process of raising capital for exploration of its projects by way of an IPO that will close on 24 February For more information please visit: Hot Rock Energy Pty is operator of Exploration Licence (EL) 6212 in the Sydney Basin, New South Wales. This licence area covers approximately 5,500 km 2 and was granted in 2004 to Longreach Oil Ltd (50%) and Hot Rock Energy Pty Ltd (50%). A company is currently undertaking a technical review of the Sydney Basin, incorporating petroleum, coal and water well data with the aim of identifying areas of high heat flow. The outcome of the study will lead to the isolation of certain areas of abnormally high geothermal gradients to provide the focus for shallow drilling in Acquisition of prospective petroleum exploration acreage, drilling and development of such areas, whether in Australia or overseas, is a vital part of the company s strategy. KUTh Exploration Pty Ltd has applied for a Class 6 (Geothermal Substances) Special Exploration Licence (SEL) over an area of some 13,000 km 2 in eastern Tasmania. The company is exploring the eastern portion of the state in SEL 26/2005 where several large radiogenic granite masses have demonstrated high heat fluxes. The first stage of the project is to locate the most favourable areas in the overlying Tasmania Basin where it is associated with the eastern batholith. For more information visit: Osiris Energy Pty Ltd is a privately held Australian company and a new entrant to Australian geothermal exploration and development. The company was formed to locate, define and exploit geothermal resources suitable for power generation and other ancillary uses requiring energy in the form of heat. It has already submitted two geothermal exploration licence applications in South Australia adjacent to existing geothermal exploration licences in the Cooper Basin in the northeast GIA 2005 Annual Report 69

72 of the State and one in the Otway Basin area in the State s southeast. Osiris perceives an opportunity in combining the expertise and methods available in the petroleum, mineral and energy sectors. It has engaged consultancy group Hot Dry Rocks Pty Ltd to provide it with the necessary technical expertise to achieve its aim of being in the forefront of geothermal exploration and development using state-of-the-art techniques. Hot Dry Rocks ( provides a very experienced and multidisciplinary team of geoscience professionals with extensive experience in the utilisation of geological, geophysical and remote sensing techniques, analysis of well bore data, expertise in basin modelling and experience in cross-disciplinary approaches to minerals and petroleum exploration. It offers specialist services in locating and defining geothermal resources by applying leading edge exploration methodologies and three dimension (3D) modelling and resource estimation. Osiris believes that its approach to exploration and development is unique in the emerging renewable hydrothermal energy industry, and will result in successful and cost-effective exploration and development of geothermal resources. Osiris Energy Pty Ltd is currently an unlisted company, but plans to list on the Australian Stock Exchange towards the end of 2006 or the beginning of Pacific Hydro Ltd is exploring for sediment-hosted geothermal heat in the Great Artesian Basin for a 400 MW conventional geothermal project. Pacific Hydro holds 18 Geothermal Exploration Licenses covering 9,000 km 2 and has successfully completed year 1 of its GEL work program to delineate the resource and define exploration targets. During 2006 drilling is planned as the next phase of development. Petratherm Ltd listed on the Australian Stock Exchange in July 2004 after a highly successfully public offering based on a commercial rationale of locating high quality geothermal resources close to market. The Company has developed predictive exploration methods to locate Hot Dry Rock Resources through collaborative research with the University of Adelaide. It has since drilled gradient test wells to approximately 600 m at two sites associated with exceptionally high heat producing granites in Southern Australia. Results from both wells were outstanding, with the Callabonna site returning an average temperature gradient of 68 ºC per kilometre and at the Paralana Site an average gradient of 81 ºC per kilometre. Plans are now underway for the company to drill its first injection well at Paralana to approximately 3.5 km depth where temperatures are expected to exceed 220 C. Having an up front exploration focus, Petratherm are also actively looking to develop new projects elsewhere in Australia and overseas. Petratherm successfully secured a PACE 2 grant of $ to partially fund its Paralana Project drilling programme. For further information, visit Proactive Energy Development Ltd is a privately held company that plans to explore for hot rocks at intermediate depths in proximity to the existing high voltage grid to connection to Olympic Dam. Proactive has commenced geotechnical model building in GEL207 Roxby Downs in SA, and a field inspection is planned over the coming month with an ex- WMC project manager to guide on past exploration drilling activity. The company has also commenced geotechnical model research for the Felton EPM in SE Qld, but await the passing of Geothermal legislation, copied from NSW & SA. Proactive has completed a geotechnical model on the Bulli EL6360 in NSW, and is currently seeking funding plus a research grant to drill a 3,000+ m well later this year. The Ulan ELA for Geothermal Energy in NSW is awaiting a decision on grant by the Minister. The company plans to list with the ASX in the first half of Scopenergy Ltd is focused on searching for water in hot sedimentary rocks in proximity to recent volcanic activity in the South East of South Australia, around Millicent. The company holds contiguous Geothermal Exploration Licences totalling 2,634 km 2 covering substantially all of Australia s most recently active volcanic province (5,000 yrs BP). Scopenergy commenced a slim hole (100 mm) drilling program in January 2006, seeking to confirm several large scale heat flow anomalies previously measured in 19 petroleum exploration wells and 26 water wells in the vicinity of its tenements. If this program is successful the company plans a 3D seismic program to GIA 2005 Annual Report 70

73 better define drilling targets, and to drill 3 production scale test wells later in Scopenergy's areas are well served by 275kV and 132kV transmission lines. Scopenergy's business model seeks to generate conventional geothermal power from water at or above 170 C hosted in a known deep aquifer of the Otway Basin, in proximity to recent volcanic activity and the existing electricity grid. The company is the recipient of a $4 million Australian Government REDI grant to fund an extensive drilling and 3D seismic program and also successfully secured a PACE 2 grant of $ to partially fund its South East drilling program that commenced in January Scopenergy is currently a privately owned company but may seek a listing on the ASX later in For further information, visit GIA 2005 Annual Report 71

74 Attachment 2. Australia s GIA Membership IEA Geothermal Energy Company/Organisation Name Title Address Phone Department of Industry, Tourism and John Soderbaum Science & Technology Advisor - GPO Box 9839, Canberra ACT 2601 john.soderbaum@industry.gov.au Resources Energy & Environment Division Eden Energy Graham Jeffress Senior Geologist PO Box Z5360 St Georges Tce Perth gjeffress@tasmanresources.com.au WA 6831 Geodynamics Ltd Bertus de Graaf Managing Director Suite 6, Level 1, 19 Lang Parade, bdegraaf@geodynamics.com.au Milton QLD 4064 Geoscience Australia Clinton Foster Chief of Petroleum & Marine Division GPO Box 378, Canberra ACT 2601 clinton.foster@ga.gov.au Greenrock Energy Ltd Adrian Larking Managing Director PO Box 1177, West Perth WA 6872 alarking@greenrock.com.au Havilah/Geothermal Resources Ltd Bob Johnson Chairman 63 Conyngham Street, Glenside SA 5065 geo@havilah-resources.com.au Intrepid Geophysical Des Fitzgerald Managing Director 2/1 Male Street, Brighton, VIC 3186 des@dfa.com.au Minerals & Energy, NT Department of Steve Tatzenko Deputy Director, Resource GPO Box 3000, Darwin NT 0801 steve.tatzenko@nt.gov.au Primary Industry, Fisheries & Mines Development & Policy Monash University - School of Geoscience Graeme Beardsmore Senior Research Fellow Monash University, VIC 3800 graeme.beardsmore@sci.monash.edu.au NSW DPI Tony Galligan Director Sustainable Development Level 6, 201 Elizabeth Street Sydney tony.galligan@dpi.nsw.gov.au NSW 2000 Osiris Energy Pty Ltd Geoff Geary Director PO Box 871, South Yarra VIC 3141 geoff.geary@hotdryrocks.com Pacific Hydro Ltd Terry Teoh Development Manager - SA 30 Kensington Road, Rose Park SA tteoh@pacifichydro.com.au Petratherm Ltd Peter Reid Chief Executive Officer 247 Greenhill Road, Dulwich SA preid@petratherm.com.au PIRSA Barry Goldstein Director - Petroleum & Level 6, 101 Grenfell Street, goldstein.barry@saugov.sa.gov.au Geothermal Adelaide SA 5000 Proactive Energy Developments David Hawley Director Level 21, 201 Miller Street, North Sydney NSW 2060 dhawley@proenergy.com.au Qld Department of Natural Resources & Malcolm Cremer Deputy Director General - Mining GPO Box 2454, Brisbane Qld 4001 malcolm.cremer@nrm.qld.gov.au Mines & Petroleum Scopenergy Ltd Roger Massy-Greene Managing Director Level 9, 1 York Street, Sydney NSW rogermg@bigpond.com Tas Department of Infrastructure, Carol Bacon Managing Geologist GPO Box 936, Hobart Tasmania carol.bacon@dier.tas.gov.au Energy & Resources 7001 UNSW - School of Petroleum Sheik Rahman Associate Professor University of NSW, NSW 2052 sheik.rahman@unsw.edu.au Engineering VIC DPI Kathy Hill Director Geoscience Victoria GPO Box 4440, Melbourne VIC 3001 kathy.hill@dpi.vic.gov.au WA DOIR Bill Tinapple Director Petroleum & Royalties Level 11, 100 Plain Street, East Perth bill.tinapple@doir.wa.gov.au WA 6004 GIA 2005 Annual Report 72

75 Members of the Australian Geothermal Implementing Agreement Group Prepared by: Tony Hill, Principal Geologist, PIRSA (7 th March 2006) Name Barry Goldstein - Contracting Party GIA Executive Committee Representative John Soderbaum Australian GIA Member Representative Clinton Foster Australian GIA Member Representative Graham Jeffress Australian GIA Member Representative Bertus de Graaf Australian GIA Member Representative Adrian Larking Australian GIA Member Representative Bob Johnson Australian GIA Member Representative Des Fitzgerald Australian GIA Member Representative Graeme Beardsmore Australian GIA Member Representative Tony Galligan Australian GIA Member Representative Steve Tatzenko Australian GIA Member Representative Geoff Geary Australian GIA Member Representative Terry Teoh Australian GIA Member Representative Peter Reid Australian GIA Member Representative David Hawley Australian GIA Member Representative Malcolm Cremer Australian GIA Member Representative Roger Massy-Greene Australian GIA Member Representative Carol Bacon Australian GIA Member Representative Sheik Rahman Australian GIA Member Representative Kathy Hill Australian GIA Member Representative Bill Tinapple Australian GIA Member Representative Title. Organisation Director - Petroleum & Geothermal Primary Industries & Resources South Australia (PIRSA) Science & Technology Advisor - Energy & Environment Division Australian Federal Government Dept. of Industry, Tourism &Resources Chief of Petroleum & Marine Division, Geoscience Australia, Australian Federal Government Senior Geologist, Eden Energy, Managing Director, Geodynamics Ltd Managing Director, Greenrock Energy Ltd Chairman, Geothermal Resources Ltd Managing Director, Intrepid Geophysical Senior Research Fellow, School of Geoscience, Monash University Director Sustainable Development, Department of Primary Industries, New South Wales Deputy Director, Resource Development & Policy, Minerals & Energy, Northern Territory Department of Primary Industry, Fisheries & Mines Director, Osiris Energy Pty Ltd Development Manager South Australia, Pacific Hydro Ltd Chief Executive Officer, Petratherm Ltd Director, Proactive Energy Developments Deputy Director General - Mining & Petroleum, Queensland Department of Natural Resources & Mines Managing Director, Scopenergy Ltd Managing Geologist, Tasmanian Department of Infrastructure, Energy & Resources Associate Professor, School of Petroleum Engineering, University of New South Wales Director Geoscience, Victorian Department of Primary Industries Director Petroleum & Royalties, West Australian Department of Industry and Resources GIA 2005 Annual Report 73

76 NATIONAL ACTIVITIES Chapter 9 European Commission 9.0 European Union Policy The European Union has set indicative targets for renewable energy: An increase to 22% in the share of electricity generated by renewable energy in 2010 for the EU15 (this compares with 14% in 2000). A 12% share of renewable energy in overall energy consumption in the EU15 in 2010 (including heating, electricity and transport). For geothermal energy, the new Commission guideline, the Sustainable Energy Europe programme, has determined new objectives to be reached between 2005 and 2008, i.e new heat pumps, 15 new electric power plants and 10 new low temperature power plants. Taking current geothermal heat pump market growth into consideration (25% between 2003 and 2004), the new Commission objective appears to be completely feasible and attainable. Success of these objectives in terms of high and low temperature applications will mainly depend on the results of geothermal drillings that are currently underway and which will trigger investment decisions. 9.1 Current Status of Geothermal Energy Use in Electricity Generation Few European countries have the natural resources necessary for electrical valorisation of geothermal energy. Total installed capacity in the European Union amounts to MW e. Italy has the principal high temperature geothermal deposits in the EU (790 MW e ), and alone represents nearly 95% of total European capacity. The other countries are Portugal, which is developing installations on the volcanic archipelago of the Azores, France, which is exploiting the Bouillante site in Guadeloupe, as well as Germany and Austria, which have been developing this sector for a short period of time Direct Use In the 25-member European Union at the end of 2004, medium and low temperature geothermal energy represented a capacity of MW th (for geothermal use of ktoe), i.e. an additional MW th with respect to Hungary is the biggest user of medium and low temperature geothermal energy with, according to the Hungarian Association for Geothermal Energy, installed capacity of MW th. Italy is the second ranked European Union country for low temperature applications with, according to the UGI (Italian Geothermal Union) and the ENEL, a capacity of MW th. France, ranked third in the EU with MW th installed at the end of 2004, has developed more urban heating networks. The European Union is one of the main regions to have developed heat pump technology. It is estimated that there are more than 379,000 geothermal heat pump units, equivalent to 4,531 MW th. Geothermal energy use corresponding to this capacity is of the order of 0.58 Mtoe. Sweden has the largest number of heat pumps with more than 185,531 units, i.e. a cumulated capacity of 1,700 MW th. It is ahead of France (49,950 units, i.e MW th ), Germany (48,662 units, i.e MW th ), Austria (30,577 units, i.e MW th ) and Finland (30,000 units, i.e. 300 MW th ). GIA 2005 Annual Report 74

77 9.2 Research Activities in the European Union in 2005 In 2005, four new geothermal research projects have started with Commission support: EGS Pilot Plant, Engine, I-Get and Low-Bin ENGINE The ENGINE (Enhanced Geothermal Innovative Network for Europe) project aims to coordinate ongoing research and development initiatives for Unconventional Geothermal Resources and Enhanced Geothermal Systems, from resource investigation and assessment through to exploitation monitoring. Internet: I-GET The project I-GET aims at developing an innovative geothermal exploration approach based on advanced seismic and magnetotelluric methods, in order to improve the detection, prior to drilling, of fluid bearing zones in naturally and/or artificially fractured geothermal reservoirs. The new approach will be tested in four European geothermal systems with different geological and thermodynamic reservoir characteristics: two high enthalpy (metamorphic and volcanic rocks), one middle enthalpy geothermal system (deep sedimentary rocks), and one low enthalpy geothermal system (shallow sedimentary rocks). Internet: LOW-BIN The LOW-BIN project aims at improving cost-effectiveness, competitiveness and market penetration of geothermal electricity generation schemes, targeting both hydrothermal resources for immediate market penetration and future hot dry rock systems. Specific objectives are (1) to develop a geothermal Rankine Cycle power generation unit that can generate electricity from low temperature geothermal resources, with temperature threshold for profitable operation at 65 C, compared with C of existing units, and (2) develop a Rankine Cycle machine for cogeneration of heat and power by heat recovery from the cooling water circuit. This will lead in cogeneration of heat and power from Rankine Cycle units in present and future geothermal district heating schemes with overall energy efficiency of 98-99%, compared with 7-15% for existing units producing only electricity and for 35-60% of existing geothermal cogeneration schemes Soultz-sous-Forêts The EGS Pilot Plant project at Soultz-sous-Forêts, France, involves France, Germany, Italy and Switzerland, as well as teams from other countries inside and outside Europe, including Japan and USA. The project is co-ordinated by an industrial consortium (EEIG Heat Mining). Public funding is provided by the European Commission, France, Germany and Switzerland. Private funding comes from the Members of the EEIG Exploitation Minière de la Chaleur. This project is further discussed in the section below. Internet: EGS Pilot Plant- The aim of the project is to establish the world s largest and most efficient HDR-system at a depth of about 5,000 m. The system will consist of one central injection borehole and two symmetrically deviated production boreholes, each separated by about 500 m from the injection hole at depth (see illustration below). The surface circulation loop has been designed in order to enable permanent production from side wells GPK2 and GPK4 with re-injection via the central well, GPK3. A total flow rate of 80 l/s is envisaged equivalent to a total thermal power of 50 MW th and an electric power of 6 MW e. The aim is to bring a 1.5 MW e scientific pilot plant on line by the second half of 2006, and to increase this to some 6 MW e within the following year. GIA 2005 Annual Report 75

78 The construction of the pilot plant has been organized in two phases: The first phase completed in 31 March 2005, covered mainly the setting up of the legal and physical infrastructure (planning permission and authorization of work, civil engineering...) and the construction of the underground installations. Two additional boreholes drilled down to 5,000 m, (GPK3 and GPK4) have been completed in order to permit the planned tests and have been connected to the network of natural fractures by use of hydraulic stimulation and acid treatments. 25MWth GPK2 GPK3 GPK4 25MWth Sediments 1500m Granite 35 à 50 Kg/s 35 à 50 Kg/s 70 à 100Kg/s #4250m #600m 5000m >200 C The second phase already started on 1 April 2004, and thus is in part overlapping with the first one. It is based on a programme of testing and on improvements to the hydraulic productivities/injectivities of the wells. Preliminary observations and conclusions from the testing are: There appears to be good correlation between the spatial growths of microseismic events and the distribution of flow exits in the well as indicated by flow logs. The injectivity and productivity of GPK3 after stimulation is ~ 0.4 l/s/bar and 1.3 l/s/bar respectively. The productivity was declining. The undisturbed injectivity of GPK4 is ~ l/s/bar i.e. very poor. In excess of 17 MPa overpressure was required to inject 45 l/s. GIA 2005 Annual Report 76

79 The above and other hydraulic data indicate that the system at 5,000 m depth behaves like a relativity-closed system. Microseismic data is a good indicator of what was happening during the stimulation and supports the view that a satisfactory hydraulic breakthrough between GPK4 and GPK3 was not established. The strategy of using smaller volume for stimulation to reduce the generation of larger microseismic events appears to be promising. The permeability between the wells GPK3 and GPK4 has not been enhanced to a required degree and a further stimulation with higher flow rate will be necessary. Author and Contact Jeroen Schuppers, European Commission, Directorate-General for Research, New and Renewable Energy Sources, Brussels, Belgium; jeroen.schuppers@cec.eu.int GIA 2005 Annual Report 77

80 NATIONAL ACTIVITIES Chapter 10 Germany 10.0 Introduction The new German Government will further develop renewable energies. The German Law on Energy Supply is ongoing under the new German Government German National Policy The Federal Government policy aims at: A balanced energy mix of fossil and renewable energies for ensuring Germany s energy supply. Further increasing overall industrial energy efficiency and thus at the same time making a contribution to the good economic performance and competitiveness of German industry and also to climate protection. Further raising the contribution of renewable energies to covering the primary energy demand and making them competitive as rapidly as possible Renewable Energies In its strategy for sustainable development, the Federal Government has set itself the goal of raising the proportion of renewable energies in primary consumption to 4.2% by By 2050 the Government aims for a further expansion of renewable energies of up to 50%. In 1990 the proportion of renewable energies in primary energy consumption was about 1.6%. By 2003 it was possible to increase the proportion of renewable energies in primary energy consumption to 3.1%. To the conversion of these purposes the German Government in August 2005 dismissed the 5 th energy research program Geothermal Energy The use of geothermal energy is still largely in its infancy in Germany. However, due to the relatively favourable temperature characteristics, the geological situation and also the economic structure, for the foreseeable future the Upper Rhine rift valley is of primary interest for commercial geothermal power plants. In the North German basin and also in regions of crystalline rock, research mainly aims at establishing an economic operation of geothermal heating plants even at low flow rates and/or low temperatures. In order to bring geothermal electricity generation closer to market maturity, the costs and risks involved in exploiting geothermal energy must be further reduced. Detailed research requirements are as follows: Supplementation and revision temperature database by temperature measurements in boreholes. GIA 2005 Annual Report 78

81 Recording and mapping all available data on the hydraulic properties of hot water aquifers, also by applying geostatistics methods. Development and trial of investigation techniques and calculation models in borehole physics for developing scientific forecasting methods. Identification and monitoring of seismic risks, accompanying ecological research. Further development of exploration methods for forecasting aquifer properties and thus the useful heat flow. Further development of technologies for mechanical (fracturing) und chemical (acid) methods for conditioning geothermal areas. Testing stimulations methods in pilot and demonstrations projects (e.g. reservoir management). Energy conversion. In power engineering, there is potential for optimizing plant technology (ORC-process) and further development (Kalina process), which has to be explored under real conditions in Germany. Research funding through the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety is given in Table Table Research funding by the German Federal Ministry of the Environment, Nature conservation and Nuclear Safety. Year Research Funding (Mio EUR) Current Status of Geothermal Energy Use Electricity Generation In November 2003 the organic Rankine cycle was installed in Neustadt-Glewe for electricity production (230 kw). The annual use amounted to 1500 MWh/a. There were no new geothermal energy plants constructed in Rates and Trends in Developments The geothermal projects in Unterhaching, Landau, Speyer, Groß Schönebeck, Hannover and Soultz-sous-Forêts are ongoing Direct Use Installed Thermal Power There were roughly 30,000 earth coupled heat pumps installed in 2005; with a total installed capacity of about 400 MW th : 7 installations each with an installed capacity in excess of 5 MW: 120 MW th. GIA 2005 Annual Report 79

82 24 installations each with an installed capacity in excess of 100 kw: 15 MW th. 31 installations with an installed capacity: 135 MW th. There were 17 projects under construction in 2005, with a total capacity of 110 MW th Thermal Energy Used Table Examples of thermal energy installed capacity for heating in Germany. Location Installed Power (MW th) Temperature ( C) Form Neustadt-Glewe doublet Unterschleißheim 9 90 doublet Erding 9 66 heat pump Straubing 5 36 doublet Waren (Müritz) 5 60 doublet Wiesbaden New Developments during 2005 Drilling of a well in Landau began in 2005 and is continuing Market Development and Stimulation A market for geothermal energy in Germany has not yet developed Development Constraints Geothermal energy in Germany presents a high risk due to the high costs for drilling and use. Most of the geothermal resources also have a very high salinity. In addition, the costs for oil, gas and coal (hard and brown) for heating and for electricity generation are quite low Economics Trends in Geothermal Investment Investment in geothermal development is being made in the following locations: Soultz: EGS Technology for generation of electricity. North Germany. Neustadt-Glewe: Long term stability of the aquifer for heating and electricity. Groß Schönebeck: Drilling the second borehole and stimulation the reservoir. Hannover: Drilling the first borehole and heating the geothermal research center. GIA 2005 Annual Report 80

83 Aachen: Heating a new building. Landau: Drilling the second borehole. Unterhaching: Drilling the second borehole Trends in the Costs of Energy The costs for geothermal generation continue to rise Research Activities Focus Areas Soultz-sous-Forêts (France) Task: Installation of a scientific geothermal pilot plant (first phase). The project is a European project on HDR. It is funded by the funding agencies of EC, France and Germany and a part by the industry. The working plan on the German side is distributed to 5 partners (federal agency, university and companies. Status: In the first phase 3 boreholes are drilled, to up to 5,000 m. Stimulation tests were done with very much success. It was possible to generate two heat exchangers at two horizons. The upper reservoir is located in 3,000 m to 3,600 m depth and delivers temperatures of 165 C. The lower reservoir with depths of 5,000 m and deeper has temperatures of 200 C. The new reservoir at 5,000 m shows closer boundaries compared to the upper reservoir. No leak-off to the upper reservoir has been detected. At the moment the last planned borehole GPK 4 is drilled without problems to 5,200 m depth. Costs: 6,4 Mio Euros Funding. The cost accumulated over all parties amounted to 30 Mio Euros. Phase II of the project started in April 2004 with the aim to produce electricity and this is an ongoing project, that continued through Government Funded The German Government funds the following research and development projects: Neustadt-Glewe Task: Evaluation of operational parameters for the geothermal heat plant at Neustadt-Glewe for the production of heat and electricity over a 5-year period beginning in The power generation is based on using turbines operating on the ORC. The work is spread over two projects. Status: Neustadt-Glewe is the first geothermal plant working in Germany. The heat production project has operated very successful since In November 2003 the organic Rankine cycle electricity production began. This is the first electricity production via geothermal energy in Germany. Costs: 1.3 Mio. Euros total project costs, with 0.6 Mio. Euros funding for GIA 2005 Annual Report 81

84 Figure Drill rig at Soultz-sous-Forêts, Alsace, France Groß Schönebeck Task: Preparation of a hot water rock storage in the (sedimentary) north-german Basin for the use of geothermal heat and production of electricity. This task is done by a network of 6 stand alone -projects. Status: The place for the second borehole was prepared, with drilling to begin in March Hannover Task: This study investigates the one-probe-two-layer-method. There are two institutions working on this project. The goal is to examine the method for extraction of geothermal heat from sedimentary rocks (north-german Basin). During hydraulic tests temperature and pressure logs will run as well as seismic monitoring. The results are interpreted by analytical and numerical models to get information on the thermal capacity and the physical and economic life of the one-probe-twolayer-system. Costs: 2.0 Mio. Euros total project costs, with 2.0 Mio. Euros funded Landau Task: Stimulation test between the boreholes (accompanying research to the industrial project) Costs: 15 Mio EUR total project costs, with 875,000 Euros funding. GIA 2005 Annual Report 82

85 Bruchsal Task: Geothermal use of high salinity and high temperature deep waters in the geothermal field of Bruchsal for heat and electricity production. Two wells were drilled in After getting new government aid it was then possible to do the circulation tests. Due to the high salinity and extreme temperature and pressure changes during the circulation tests the heating pipeline (fiber glass pipe) broke up. It is planned to fund a new heating pipeline to get the project running again. For the new pipeline steel will be used which will get an inner wall scaling made of the natural aragonite or calcite precipitation. The scaling will be applied under controlled (temperature, pressure, inhibition of oxygen entry) conditions. Under constant conditions even during test phases and later in operation the scaling should prohibit corrosion. Status: The scientific project was completed in October Costs: 3.1 Mio. Euros total project costs, with 1.5 Mio. Euros funding Industry Funded Landau/Pfalz Task: To produce heat and electricity using two boreholes. Plant: Geox Landau. Funding: Risk capital, with costs approximately 15 Mio EUR. Status: At the end of 2005, the depth of the first borehole was 3,000 m; with a temperature of 152 C attained. Aim: Drilling of the second borehole is to begin in spring Location Neustadt-Glewe Task: The plant BEWAG-Berlin is being used to investigate the reservoir-parameters (2,250 m) in a long-term project. Costs: The project cost is not known Location Unterhaching Task: To investigate the production of heat and electricity with two boreholes. Plant: Town Unterhaching. Funding: Risk capital amounting to 30 Mio. Status: In 2004, the first borehole was drilled to a depth of 3,446 m, and attained a temperature of 122 C, with a flow rate of 150 l/sec. No work was conducted in Aim: Drilling of the second borehole is to begin in the spring of GIA 2005 Annual Report 83

86 Location: Speyer Task: Heat and electricity generation using five boreholes. Plant: FirstGeotherm. Funding: Risk capital, though the costs are unknown. Status: The first borehole was drilled to a depth of 2,700 m in There was no work conducted in Aim: The plan is to drill the second borehole in the spring Geothermal Education Geothermal Education is provided at several universities in Germany (for instance Uni Bochum, RWTH Aachen, TU Berlin) 10.8 International Cooperative Activities The German Ministry of Environment funds participation in the IEA-GIA. The focus is on the project in Soultz-sous-Forêts. There are also other activities from the German funded participants. Author and Contact Dieter Rathjen, Forschungszentrum Juelich GmbH, Project Management Organization Juelich, Department of Renewable Energies (EEN), Juelich, Germany; d.rathjen@fz-juelich.de GIA 2005 Annual Report 84

87 NATIONAL ACTIVITIES Chapter 11 Iceland 11.0 Introduction Because of the location of Iceland on the Mid-Atlantic Ridge the geothermal resources are ample and abundant. Over half of the primary energy supply in the country comes from geothermal energy. The main use of geothermal energy is for space heating and about 88% of all houses are heated by this energy source. Other sectors of direct use are swimming pools, snow melting, industry, greenhouses and fish farming. Of the total electricity generation, about 17% comes from geothermal energy. An expansion in the energy intensive industry has led to a rapid increase in electricity demand in the country. This has stimulated the development of geothermal power production and resulted in the construction of new plants. Two of the largest energy companies in Iceland, Reykjavik Energy and Hitaveita Suðurnesja, have new power plants for electricity production under construction. The total capacity of these two plants will be 220 MW e. An expansion of 30 MW e was inaugurated at Nesjavellir power plant in November See Figure 11.1 for locations of geothermal areas in Iceland and Figures 11.2 and 11.3 for the locations and distribution of geothermal energy utilization. Figure Location of Iceland s geothermal areas (from Orkustofnun webpage: GIA 2005 Annual Report 85

88 Figure Location of Iceland s utilization sites (from Orkustofnun webpage: National Policy The national strategy is aimed at harnessing geothermal resources whenever possible, respecting the natural and human environment. There has been a governmental effort to explore the geothermal potential in areas previously defined as cold regions. This effort has been quite successful and in the autumn of 2005 a town in east Iceland Eskifjörður, with about 1000 inhabitants was connected to a new heating system. A new geothermal area has been located using gradient wells. Water from this area will be utilized for the heating of still another small town in west Iceland, Grundarfjördur (about 900 inhabitants). In addition, foreign investment in power intensive industry is encouraged and watch is being kept on developments in the hydrogen fuel field. The Icelandic Electricity Act came into force in According to the Act, until and including 31 December 2003, only those parties purchasing 100 GWh of electricity or more annually may purchase electricity from parties other than the distribution system operator in their distribution zone. From 1 January 2005, final customers who are power measured and use more power than 100 kw could purchase from the electricity supplier of their choice. From 1 January 2006 all parties are entitled to select the electricity supplier of their choice. Government expenditure on geothermal R&D was about 1 M Euros in Industry expenditure amounted to 6-7 M Euros. GIA 2005 Annual Report 86

89 Industrial process heat 5.2% Snow melting 4.4% Swimming pools 4.2% Electricity generation 18.7% Fish Farming 7.1% Greenhouses 2.7% Space heating 57.8% Figure Utilization of geothermal energy in Iceland for Current Status of Geothermal Energy Use in Electricity Generation As a result of a rapid expansion in the energy intensive industry in Iceland the demand for electricity has increased considerably. This has partly been met by increased geothermal electricity production. Two new geothermal power projects are now under construction at Hellisheidi and Reykjanes, will start producing respectively 80 MW and 100 MW in In Bjarnarflag an environmental impact assessment for a 90 MW power plant is almost completed. In Krafla power plant a third 30 MW unit is planned, but currently pending due to other projects. An enlargement at Hellisheiði to double the capacity to 220 MW within the next 10 years is in preparation. In 2005, Iceland s geothermal installed capacity was 232 MW e, increasing by 30 MW when a new unit in Nesjavellir was put into production late in the year. The total generation in 2005 was 1,658 GWh. A total of 10 high temperature production wells and one injection well were drilled in Direct Use The total direct use of geothermal energy in Iceland in 2005 was about 26,000 TJ, corresponding to 7,200 GWh. About 88% of all energy used for space heating is geothermal and its share is still slowly increasing mainly due to the governmental effort to explore the geothermal potential in areas previously defined as cold regions. In 2005 the town Eskifjörður in east Iceland, with about 1000 inhabitants was connected to a geothermal heating system. GIA 2005 Annual Report 87

90 Heating of swimming pools is also one of the most important types of geothermal utilization in Iceland and the one with the longest tradition. There are today about 130 geothermally heated swimming pools (surface area of 28,000 m 2 ). Most of the public pools are open-air pools that are used throughout the year. Snow melting has been common in Iceland for the past years and the total area covered is about 740,000 m 2. There has been no increase in direct industrial uses of geothermal energy in Iceland during the last years and recently there has rather been a cut-down as one of the biggest industrial users of geothermal energy, the diatomite plant Kísilidjan at Mývatn in operation since 1967, was closed down in late However a geothermal health spa was opened up in the area just before and has become very popular. There are hopes for a further balneological projects located in northeast Iceland in the near future. A seaweed processing plant at Reykhólar, W-Iceland uses about 150 TJ annually for drying. A plant for the commercial production of liquid carbon dioxide (CO 2 ) has been in operation at Haedarendi in SW-Iceland since Geothermal water is also used on a small scale for timber drying and fish drying. The total geothermal energy used for industrial purposes is about 1,100 TJ per year. Almost all greenhouses in Iceland are heated by geothermal energy. The total area under glass has increased slowly the last years and is now about 195,000 m 2. Of this area 55% are used for growing vegetables and 45% for growing flowers. In addition it is estimated that about 105,000 m 2 are used for soil heating. Artificial lighting and CO 2 enrichment has considerably enhanced the growing season and practically doubled the crop yield during the last few years. The CO 2 gas used in the greenhouses originates mainly from the geothermal plant at Hæðarendi. The total geothermal energy used in the greenhouse sector in Iceland is estimated to be 840 TJ per year. There are about 50 fish farms in operation in Iceland and most of them use geothermal water. The total production in fish farms in Iceland has been slowly increasing the last years to about 4,000 tonnes per year. The total geothermal energy used in the fish farming sector in Iceland is estimated to be 2,200 TJ per year. Nine low temperature wells for space heating purposes were drilled in 2005 and 23 wells for surveying purposes Energy Savings The use of geothermal energy in Iceland provided a fuel savings of about 600,000 tonnes of oil equivalent (toe). The reduced/avoided CO 2 emissions amounted to about 1.9 Mt Market Development and Stimulation The government gives grants to small projects in the field of energy. However, for the last few years emphasis has been on finding usable geothermal water for space heating in areas where resources were previously unknown. The high demand for electricity for intensive industry resulting from the favourable prices of electricity has resulted in large-scale geothermal power development. Development cost trends have been stable except for increases in steel prices. Performance improvement has been dramatic and the time for drilling high temperature geothermal wells has been reduced from 55 to 40 days. This has not yet affected the cost for the energy companies as the prices are unit prices and they have not been changed. GIA 2005 Annual Report 88

91 Figure Computer drawn picture of the Hellisheiði power plant (by Gunnar Birgisson). Figure Pictures of the Reykjanes power station during construction (by Oddgeri Karlsson) Development Constraints Development constraints are mostly due to environmental issues, though geothermal energy was looked upon more positively than hydropower in a recent national review. Local issues do place constrains on drilling sites and access to them. GIA 2005 Annual Report 89

92 11.5 Economics Recent developments of geothermal resources have demonstrated that geothermal power plants can compete with hydro power plants in the country in providing electricity for the industry of aluminium smelters. Government investment in geothermal has increased due to the large demand for the power intensive industry. The cost of energy has been stable Research Activities Focus Areas Research is focusing on known high temperature geothermal areas for the purpose of categorizing them according to the feasibility for future electricity production. In addition, geothermal areas are being searched for, that are close to districts that do not currently have geothermal space heating. A consortium of Icelandic energy companies has begun the project of drilling a 4-5 km deep drill hole into the Reykjanes high-temperature systems to reach C hot supercritical hydrous fluid at a rifted plate margin on a mid-ocean ridge. The main purpose of the IDDP project ( is to find out if it is economically feasible to extract energy and chemicals out of hydrothermal systems at supercritical conditions Government Funded Research Deep drilling: The Government of Iceland decided at its meeting on 30 th August 2005, to participate significantly (300 MIKR or 4 M Euros) in funding the IDDP drilling and flow testing in Hopes are still high that the next phase can start late 2005, which is to deepen a 3 km well to 4 km. During the past six years the Ministry of Industry has been running a program to encourage geothermal exploration for domestic heating in areas where geothermal resources have not been identified, so-called cold areas. A total of US$1.9 has been granted for this purpose and used mainly for drilling m deep thermal gradient exploration wells. This method has proven to be a successful exploration technique in Iceland. A project aiming at finding new high geothermal areas within the neovolcanic zone was formally started in If new geothermal areas will be found the potential for electrical production in Iceland will increase considerable Industry Funded Research In the past years, Reykjavik Energy has been drilling several exploration and production wells on Hellisheidi, where they have started the construction of a new 80 MW power plant for both electricity and hot water production. Also at Nesjavellir, new wells have been drilled in preparation for expansion of the existing power plant. At Reykjanes, Hitaveita Suðurnesja has been carrying out exploration and production drilling in connection with the decision to utilize this high-temperature field for power production. They plan to build, as a first stage, a power plant of 100 MW e. The National Power Company in Iceland funds a full professor chair in geothermal research at the Natural Resources Faculty, University of Akureyri. GIA 2005 Annual Report 90

93 Individual heating companies as well as the cooperation of energy producing companies funds several geothermal research projects, the biggest one being the deep drilling project also funded by the government Geothermal Education During the 27 years the geothermal training program in Iceland operated under the supervision of the United Nations University there have been graduated altogether 338 fellows from 39 countries. In year 2005 there were trained 20 fellows from 11 countries. In the Master of Science program in geothermal research there are currently 3 students, but 8 have finished so far. In November 2005 the first 2 weeks course was given in Nairobi, Kenya organized by the school. There is a great demand for the admission to trainingship in the program. The Icelandic government stands for the main part of the funding of the geothermal training program. The Natural Resources Faculty, University of Akureyri offers BSc and MSc degrees in sustainable energy utilization of the renewable energy sources with emphasis on hydro and geothermal energy. The students attend several courses covering the harnessing of geothermal energy and are trained in different geothermal disciplines. A new MSc program in sustainable energy, that will be taught in English will be offered for international students from the autumn of University of Iceland offers BSc, MSc and PhD degrees in geophysics, geology, engineering and other disciplines that form the basis for geothermal research International Cooperative Activities Iceland is a member of the IEA-GIA and leads the new Annex VIII Direct Use of Geothermal Energy. In addition, it is a member of the International Geothermal Association with two Board Members, and now hosts the IGA Secretariat since September Iceland is also a Member of the World Energy Council, cooperates within the EU and Orkustofnun hosts the UNU Geothermal Training Programme References Orkustofnun (National Energy Authority), data ( Ragnarsson, A., pers. comm. Ragnarsson, A. (2005) Geothermal development in Iceland World Geothermal Congress 2005, Antalya, Turkey, April Authors and Contacts Helga Tulinius, Orkustofnun (National Energy Authority of Iceland), Reykjavik, Iceland; htul@vgk.is Hrefna Kristmannsdóttir, University of Akureyri, Akureyri, Iceland; hk@unak.is GIA 2005 Annual Report 91

94 NATIONAL ACTIVITIES Chapter 12 Italy 12.0 Introduction This chapter outlines the development of the geothermal activities in Italy in the year Geothermal resources in Italy are used mainly to produce electricity and Enel is the sole operator for these activities. The first industrial power plant dates back to Since then, geothermal installed capacity has been increasing, reaching 810 MW e at the end of the year In 2005 geothermal net generation exceeded 5 billion kwh. Though this represents only 1.9% of the total domestic generation, it meets about 24% of the electricity demand in Tuscany, the Italian region where all the geothermal plants are located. In addition to electricity generation, geothermal fluids are used as heat sources, mainly for spas, space and district heating, greenhouses and fish farming. In 2005 the supply of thermal energy totalled about 265 ktoe (thousand tonnes of oil equivalent). As from 1 June 2005 Enel GreenPower S.p.A., fully owned by Enel Group, which had the specific aim of developing renewable energy sources both in Italy and abroad, was closed and the entire renewable energy sector was moved into the Generation & Energy Management Division, where a business Area for Renewable Resources was set up. This Business Area includes the Geothermal Production Unit, with the mission of developing and operating the geothermal resources for power generation in Italy and also of giving technical support for the development of geothermal projects abroad The Electricity Market in Italy In line with the European Directive (EC/96/92) relating to the creation of a single market for electric energy in Europe, on 19 February 1999 the Italian Government approved a decree law (n 79/99) defining the basic rules for the new organization of the Italian electricity market. According to the new regulations, no individual operator was allowed to generate or import more than 50% of the domestic overall consumption of electric energy as from 1 January In the period , in order to comply with this new legislation, Enel S.p.A. has sold 15,057 MW of its generating capacity to other operators. As a consequence, several international competitors are now present in the Italian electricity market. From 1 April 2004 the Italian Power Exchange has been operating and in the same year an independent private company, called TERNA, was established for the ownership and management of the national high voltage electric grid (transmission network). Specific policies for supporting the development of renewable resources have been adopted in Italy. As from the year 2001, under the same law (n 79/99), all operators (importers and producers of electricity from non-renewable sources) have to supply a quota of their production from renewable sources into the grid within the following year. The quota was initially, i.e. from the year 2002, set at 2% of the total energy, produced or imported, exceeding 100 GWh (excluding cogeneration, auxiliary consumption and exports). GIA 2005 Annual Report 92

95 Applied to the whole Italian market, the 2% quota was at that time equivalent to about 5 billion kwh. This amount was large enough to effectively spur the market, considering that it had to be obtained only from plants that began production or were re-powered (for the additional capacity only) after the law had come into effect. The conceived mechanism provides a great deal of flexibility: operators are allowed to meet their obligations either by generating directly or by purchasing from others some or all of the necessary green energy, or simply their rights (as in the spirit of the green certificates ). In 2003 a new decree law (n 387/03) fixed a 0.35% per year increase rate for this quota, as for the period, and further increases are foreseen in the subsequent years to keep up with international commitments for CO 2 emissions reduction. Over the first two years of application, this mechanism has lead to an average market price of 8.3 -cent/kwh of the so-called green certificates, to be added to the average price for the sale of electricity, which was around 5 -cent/kwh Current Status of Geothermal Energy Use Electricity Generation All the plants in operation are located in Tuscany, in the areas of Larderello/Travale-Radicondoli and Mt. Amiata. As of 31 December 2005, 230 production wells were in operation, feeding many steam networks for a total length of about 160 km. In addition, 32 reinjection wells were in operation with a total water network of about 180 km. There were 32 units in operation with a total installed capacity of MW e and a maximum running capacity of 711 MW e. The net electricity generation in 2005 was 5,022 billion kwh, slightly lower than the value of the year 2004 because of re-powering activities in some of the units already in operation Drilling Activities Carried Out in 2005 Drilling and completion of 4 new production wells (one of them with depth of 3,785 m) and of 1 shallow well for water production. Workover/deepening activities in 6 wells. Drilling and completion of 1 deep exploratory well (4,100 m depth). Start of 3 deep exploratory wells drilling which will be completed in These wells are in the framework of the deep exploratory program launched in 2003 for the area of Larderello/Travale- Radicondoli with the aim of verifying the possibility of further enlarging the productive horizons. The program includes 3D seismic surveys and 12 deep exploratory wells. In the year 2005 the total drilling activity in Italy has added to 13,868 m. In addition to the 2005 drilling activities in Italy, Enel also had strong commitment in El Salvador, where 5 wells were completed and drilling of one well continued into 2006, for a total of 10,683 m drilled. GIA 2005 Annual Report 93

96 Power plant construction in 2005 Two new units have been commissioned and started up in 2005, both of them in the Larderello area: 40 MW Nuova S. Martino replacing two old 20 MW units. 20 MW Nuova Larderello as additional capacity due to the positive results of the reinjection program AMIS Plant Construction in 2005 The AMIS abatement plants have been designed by Enel to remove H 2 S and Hg from plant emissions. This technology makes possible a substantial reduction of the environmental impact of the generation park, with a consequent acceptability improvement from the local population. It will eliminate the bad smell of H 2 S present in the geothermal areas, which represents a real nuisance for the people living near the plants. In addition, Hg removal will prevent possible effects of mercury build up in soils, water and food chain in the long-term operation of the plants. In 2005, two additional AMIS plants were installed and operated in the Mt. Amiata area and three others have been installed in the Larderello area. The total investment for the above mentioned activities were 87 million Euros. Figure The ENEL proprietary AMIS hydrogen sulphide and mercury emission abatement system installed at the Travale 4 geothermal power station. GIA 2005 Annual Report 94

97 Forecasts for the Development Program for 2006 Production Wells Completion of drilling and testing of one production well, whose drilling started in Drilling of one production well. Exploratory Wells Completion of drilling and testing for three wells of the deep exploration program whose drilling started in Drilling of three exploratory wells. AMIS Abatement Plants Commissioning of 5 AMIS plants in the area of Larderello/Travale-Radicondoli area Direct Uses In addition to the electricity generation, in Italy geothermal fluids are also used as thermal sources. In 2005 the total heat supply was equivalent to about 265 ktoe. Most of the applications (60% of the supply) are devoted to bathing (temperatures less than 40 C), which has a long tradition in Italy, dating back to Etruscan and Roman times. There are also several other uses including space and district heating, fish farming, greenhouses and industrial process heat. Enel is the most important domestic operator in the field of direct use, supplying the equivalent of about 32 ktoe of geothermal heat: 47% both for greenhouses and district heating, 5% for industrial processes and the balance for fish farming. In addition, Enel is selling about 36,000 t/y of nearly pure CO 2, produced from a deep well located in the Torre Alfina Field (Latium) that is used, after purification, in the food industry Avoided Emissions The utilization of geothermal fluids for electricity generation and direct uses provides a saving of about 1.27 Mtoe (million tons of oil equivalent), avoiding, at the same time, emission to the atmosphere of about 3.6 Mt of CO 2. It should be noted that the exploitation of steam-dominated fields reduces the amount of CO 2 naturally emitted from the soils in the geothermal areas, so that the total CO 2 emission (natural plus power plant emission) remains unchanged. CO 2 emission has not been included by ARPAT (the National Agency for the protection of the environment and the territory) in the GHG inventory Market Development and Stimulation In Italy, since 1 January 2003, the Bersani Decree requires producers or importers of electricity from non-renewable sources to deliver to the grid a share of electricity generated from renewable sources. This provision gave rise to the Green Certificate market. GIA 2005 Annual Report 95

98 The Green Certificate proves that a certain amount of energy is produced from renewable resources with each certificate representing 50 MWh of electricity (The original provision of 100 MWh for each green certificate, the Decree of the Minister of the Industry of 11 November 1999, has been recently reduced to 50 MWh by the Law nr. 239/2004, known as Marzano Law ). Whatever the source of renewable energy, it is necessary that this energy be produced by new plants or by plants re-powered, rebuilt or re-activated, which began operation after 2 April Green certificates apply to the first eight years of plant operation. For the first year (2002), a share of 2% was established. According to Decree n 387/2003, issued on 31 January 2004, which enforces in Italy the European Directive 2001/77/EC on the promotion of the electricity from renewable sources in the internal market, this share is increased to 2.35% in In addition, an annual increase of 0.35% is established for the two following years (2.7% in 2006 and 3.05% in 2007). Green Certificates will be exchanged between producers and importers in an open market. In order to carry out this exchange, the Electric Market Authority will promote the negotiation of the certificates. As a consequence, the value of the kwh generated from renewables is the sum of the base price of the energy and of the market value of the Green Certificates (the latter is limited to the first eight years of plant operation). For 2005, the value of the Green Certificates was cent/kwh. Producers and importers can also comply with the decree by importing electricity generated from renewable energy plants of foreign countries adopting similar policies for renewable energy promotion. State incentives for the use of heat from geothermal sources are also provided. They consist of: Incentive to the end users of /MWh t on a permanent basis plus / MWh t to be confirmed every fiscal year. The latter has been recently confirmed for 2005 by the budget Law (Law nr. 311/2004). Incentive to the developers for new supplies or for the increase of the existing ones, that is / kw t Environmental/Acceptability Aspects The strong interaction occurring between geothermal activities and territory, taking into account that we operate in Tuscany-Latium areas, has placed serious hindrance to developing new projects. Aiming at the retrieval of a constructive and mutually beneficial relation with the territory, Enel has set going a number of initiatives with the intent of achieving a reduction of environmental drawbacks and an increase of acceptability. New design solutions have been envisaged to reduce the noise and visual impact of drilling pads, gathering systems and power plants. Moreover an innovative plant for the abatement of mercury and hydrogen sulphides (called AMIS) was designed and put in operation with very positive results, improving significantly the acceptability by local population. In addition it should be noted that, by law, ENEL must pay a royalty for each kwh generated from geothermal resources to the municipalities and to the District where the plants are located. A District law has recently doubled the royalty to the municipalities of Tuscany. Starting from 1 January 2003 ENEL must pay: cent/kwh to the affected municipalities cent/kwh to the Tuscany District Authority GIA 2005 Annual Report 96

99 Figure Design criteria to reduce the impact of the steam pipelines 12.5 Economics In Italy the geothermal projects developed in recent years are relevant to deep resources, with resulting huge investments in drilling activities (wells up to 3,000-4,000 m). Because of this huge investment, the total capital cost can exceed 3 million /MW e installed, depending on well depths, productivity and chemical composition of the fluids. Accordingly, it is because of the existence of Green Certificates that the development of new projects is still feasible in Italy Research Activities Research activities are mainly focused on the implementation of advanced methodologies aimed at reducing the mining risk. Advanced methodologies for the 3D seismic prospecting elaboration and interpretation have been applied, in collaboration with universities and research institutions both in Italy and in Europe, with good results in locating the fractured zones inside the deep formations (more than 3,000 m) International Activities Enel is engaged in El Salvador as partner of La Geo (the Salvadorian geothermal company), which currently operates geothermal fields with an installed capacity of 161 MW e. In 2005, five wells were drilled: two exploratory wells in a new area close to the Ahuachapan geothermal field and the other three in the framework of the development program of the Berlin field, where a 40 MW e unit is under construction and will be on line by August-September Exploration activities in two new areas in Chile have been also started. Author and Contact Guido Cappetti, Enel GEM, Geothermal Production, Pisa, Italy; guido.cappetti@enel.it GIA 2005 Annual Report 97

100 NATIONAL ACTIVITIES Chapter 13 Japan 13.0 Introduction Historical Background Japan s first geothermal power generation of 1.12 kw took place in Beppu, Oita Prefecture, Kyushu in The practical use of geothermal energy commenced in 1966, with the introduction of the first full-scale geothermal power plant, the Matsukawa Geothermal Power Plant of 9.5 MW e (23.5 MW e at present), Iwate Prefecture, in northern Honshu. Japan, as a volcanic country, has potential resource conditions for geothermal development. However, the construction of geothermal power plants has been restricted due to factors such as the restrictions in National Parks and huge numbers of pre-existing hot spring resort areas. Therefore, at the end of the 1980s only nine plants were operating, with a total capacity of about 215 MW e. The risks involved in initial investment also hinder geothermal development. Thus, the government has been promoting research and development of exploration techniques in several areas of geothermal activities. As a result, geothermal development in several areas in the Tohoku and Kyushu Districts reached the construction stage in the early 1990s, duplicating a total capacity to be about 535 MW e. The government has, however, withdrawn a variety of incentives to geothermal energy in the late 1990s, as Japan s economy has entered a deflation recession stage particularly since the Asian currency crisis in In December 1997, the government has withdrawn geothermal energy from the category of new energy that was subsidized by several lines of incentives. Then, geothermal energy was suddenly placed into free competition of the electricity market. In June 2001, the government has politically evaluated that geothermal energy was not worthy to allocate budgets for its research and development. Then, all the geothermal projects for research and development were terminated in March In April 2003, the RPS (Renewable Portfolio Standard) Law was put into effect, but not applied to the conventional type geothermal power generation except for the geothermal binary cycle power generation. The lines of less incentive policies have made geothermal market freeze in Japan and no new geothermal power plants have been constructed at all since the late 1990s until This pessimistic currency was slightly changed by the recent construction of a new Hatchobaru binary plant and active international cooperation as described below, anticipating a turning point to the near future revival Highlights for 2005 Hatchobaru- a 2,000 kw demonstration binary power plant is operating from February 2004 and was approved as the first geothermal facility for the Renewable Portfolio Standard (RPS) Law in February 24, NEDO Geothermal Development Promotion Surveys adopted the four new fields: Onsen-cho (Hyogo), Otari-mura (Nagano), Okushiri-cho (Hokkaido) and Shibetsu-Serayama (Hokkaido). GIA 2005 Annual Report 98

101 JICA Yangbajain Project ended in JICA Master Plan Study for Geothermal Power Development in Indonesia was prepared for starting from JBIC enthusiastically allocating the ODA Loans to geothermal developments in Indonesia National Policy The Agency for Natural Resources and Energy, the Ministry of Economy, Trade and Industry (METI), is in charge of Japan's energy policy Strategy The Agency for Natural Resources and Energy published Energy White Paper 2005 in May The Energy White Paper 2005 shows nine different future scenarios on energy demand and supply in Japan toward the year Even in the scenario where renewable and new energies will be the most utilized, geothermal energy is assumed to be zero growth toward This policy seems biased in such a potential geothermal country as Japan, but is the present reality. Government expenditure (million Yen unit) 20,000 NEDO established 18,000 The Second Oil Crisis 16,000 14,000 12,000 10,000 The First Oil Crisis 8,000 6,000 4,000 2,000 Sunshin e Project launched Electricity source construction account Excluded from "new energy" Debt guarantee Negative decision to R&D Termination of R&D Geothermal generation development subsidy Geothermal development promotion survey subsidy Geothermal R&D subsidy Excluded from the RPS Fiscal year (from April to March) Figure A chronological change of annual geothermal budgets in Japan Legislation and Regulation There is no geothermal legislation that defines geothermal resources and governs their use and development in Japan. For example, an application of geothermal drilling is governed by the Hot Spring Law and its implementation is approved by hot spring deliberation committees in local governments. GIA 2005 Annual Report 99

102 Progress Towards National Targets The numerical target on the geothermal electrical capacity remains 520MWe for the electricity power industries since FY2000. It means that the objective for the moment is only to maintain the current state. However, geothermal energy is expected to promote the developments, considering the mitigation of regional environmental impact by its clean nature, improvement of economy and reduction of the risks of energy security by its purely domestic origin. On the other hand, any target is given to the direct use of geothermal energy neither qualitatively nor quantitatively Government Expenditure on Geothermal Research and Development A chronological change of government expenditure on geothermal development in Japan, including the geothermal R&D as well as the market-stimulating subsidy, is shown in Figure The government expenditure has drastically been decreasing during the last several years, reflecting the present governmental policy Industry Expenditure on Geothermal R&D In the current less incentive situation, the market for geothermal power generation developments in a private sector is inactive except for those of overseas investment by trading companies. Installed capacity (MW) Sunshine Project launched The First Oil Crisis NEDO established The Second Oil Crisis Energy Excluded from "new energy" Negative decision to R&D Installed capacity Termination of R&D Excluded from the RPS Annual energy production (GWh) Fiscal year (from April to March) Figure A chronological change of installed capacity and annual energy production of geothermal power plants in Japan. GIA 2005 Annual Report 100

103 13.2 Current Status of Geothermal Energy Use in Electricity Generation Installed Capacity The total installed electricity generation capacity of geothermal energy at the end of March 2005 was MW e, including that of the companies own power plants (Figures 13.2 and 13.3 and Table 13.1). The release of the report on the national installed electricity generation capacity in Japan has come to be delayed year by year, because the electricity market has gradually been open to public since and the power generation has come to be made not only by the ten electric companies but also made by the new IPP sectors. Actually, the Agency for Natural Resources and Energy has not report the statistics on the total installed electricity generation capacity for FY 2004 (from April 2004 to March 2005) at this moment. Therefore, we here report speculative interim values on the total installed electricity generation capacity in Japan for FY The total installed electricity generation capacity for the country at the end of March 2005 was 272,701 MW e (Thermal and Nuclear Power Engineering Society, 2005), of which thermal power accounted for 60.6%, hydroelectric power 19.0%, nuclear power 20.0% and geothermal 0.2% (Hara, 2004; Figure 13.4). Figure Share of installed capacity by individual generation sources in Japan from April 2004 to March 2005 (interim estimation values by Hara, 2005). GIA 2005 Annual Report 101

104 Figure Map for geothermal power plants in Japan. GIA 2005 Annual Report 102

105 Table Operating geothermal power plants in Japan from April 2004 to March Name of power plant Power generator Steam supplier Mori Hokkaido Electric Power Co., Inc. Hokkaido Electric Power Co., Inc ,613 Nov Sumikawa Tohoku Electric Power Co., Inc.; Mitsubishi Materials Corporation Tohoku Electric Power Co., Inc.; Mitsubishi Materials Corporation ,383 Mar Onuma Mitsubishi Materials Corporation Mitsubishi Materials Corporation ,528 Jun Matsukawa Tohoku Hydropower & Geothermal Tohoku Hydropower & Geothermal Energy Co., Inc. Energy Co., Inc ,468 Oct Kakkonda 1 Tohoku Electric Power Co., Inc.; Tohoku Hydropower & Geothermal Energy Co., Tohoku Electric Power Co., Inc.; Tohoku Hydropower & Geothermal Energy Co., ,691 May 1978 Kakkonda 2 Inc. Tohoku Electric Power Co., Inc.; Tohoku Hydropower & Geothermal Energy Co., Inc. Inc. Tohoku Electric Power Co., Inc.; Tohoku Hydropower & Geothermal Energy Co., Inc ,218 Mar Uenotai Tohoku Electric Power Co., Inc.; Akita Geothermal Energy Co., Ltd. Tohoku Electric Power Co., Inc.; Akita Geothermal Energy Co., Ltd ,535 Mar Onikobe Electric Power Development Co. Electric Power Development Co ,020 Mar Yanaizu - Nishiyama Tohoku Electric Power Co., Inc.; Okuaizu Geothermal Ltd. Co., Tohoku Electric Power Co., Inc.; Okuaizu Geothermal Ltd. Co., ,297 May 1995 Hachijojima Tokyo Electric Power Company Tokyo Electric Power Company ,890 Mar Suginoi Suginoi Hotel Suginoi Hotel ,461 Mar Kuju Kuju Kankou Hotel Kuju Kankou Hotel ,917 Dec Takigami Kyushu Electric Power Co., Inc.; Idemitsu Oita Geothermal Co., Ltd. Kyushu Electric Power Co., Inc.; Idemitsu Oita Geothermal Co., Ltd ,103 Nov Otake Kyushu Electric Power Co., Inc. Kyushu Electric Power Co., Inc ,426 Aug Hatchobaru 1 Kyushu Electric Power Co., Inc. Kyushu Electric Power Co., Inc ,642 June 1977 Hatchobaru 2 Kyushu Electric Power Co., Inc. Kyushu Electric Power Co., Inc ,412 June 1990 Takenoyu Hirose Trading Co., Ltd. Hirose Trading Co., Ltd Oct Ogiri Kyushu Electric Power Co., Inc.; Nittetsu Kagoshima Geothermal Co., Ltd. Power plant operator Kyushu Electric Power Co., Inc.; Nittetsu Kagoshima Geothermal Co., Ltd. Authorized output (MW) Annual energy production (MWh) Start of operation ,001 Mar Kirishima Kokusai Hotel Daiwabo Kanko Co., Ltd. Daiwabo Kanko Co., Ltd Feb Yamagawa Kyushu Electric Power Co., Inc. Kyushu Electric Power Co., Inc ,851 Mar Total ,369, Total Electricity Generated The total electricity generation for geothermal energy in Japan during FY2004 (from April 2004 to March 2005) was 3,369 GWh (Thermal and Nuclear Power Engineering Society, 2005; Figure 13.2 and Table 13.1) New Developments During 2005 The installed capacity of geothermal power generation in Japan is MW e that has not changed since the late 1990s. However, Kyushu Electric Power Co., Inc. has recently built a 2,000 kw demonstration binary power plant in the inside of the Hatchobaru Geothermal Power Plant (Figure 13.5), utilizing an abandoned production well in the conventional power generation due to the pressure draw down. This plant consists of the ORMAT organic binary Rankine cycle system. This is the first practical geothermal binary plant in Japan, and therefore, the demonstration operation is continued from February 2004 to March 2006, including the various demonstrations for its technical and economical feasibilities. This system was approved as a qualified facility to take the first advantage of the Renewable Portfolio Standard (RPS) Law from the geothermal sector in Japan, 24 February GIA 2005 Annual Report 103

106 Figure A 2,000 kw demonstration binary power plant in the Hatchobaru Geothermal Power Plant (Taken in November 9, 2004). Observers are those from Ten ei-mura Rates and Trends in Development The installed capacity for geothermal power generation has remained almost constant in the last several years, except for that of the Hatchobaru demonstration binary power plant. Recently, a press release tells that a 1,290 kw Kalina-cycle power generation plant is planned in Kusatsu-cho, Gunma Prefecture, central Japan, utilizing waste hot spring water of 95.4 ºC. Small-scale geothermal power plants will reduce the risk and leading time for developments, and will mitigate the confliction between the hot spring unions and geothermal developers when hot spring owners themselves will develop their own plants Number of Wells Drilled Production wells were drilled at: Sumikawa, 1 well; Kakkonda, 1 well; Takigami, 1 well; Ogiri, 1 well. Reinjection wells were drilled at: Hatchobaru, 2 wells; Yamagawa, 1 well. Exploratory wells were drilled at: Minase, 2 wells, Tenei, 1 well; Onsen-cho, 2 wells; Otari, 1 well; Okushiri, 1 well Contribution to National Demand The release of the report on the total electricity generation in Japan has come to be delayed year by year, because the electricity market has gradually been open to public since and the Agency for Natural Resources and Energy has not report the statistics on the total electricity generation for FY 2004 (from April 2004 to March 2005) at this moment. Therefore, we here report interim estimation values on the total electricity generation for FY 2004 (Hara, 2005). The GIA 2005 Annual Report 104

107 total electricity generation for FY 2004 was TWh where geothermal energy provided about 0.4% (Figure 13.6). Figure Share of electricity production by individual generation sources in Japan from April 2004 to March 2005 (interim estimation values by Hara, 2005) Direct Use To summarize geothermal resources for direct use in Japan, a special attention should be given to its huge numbers of hot springs for bathing. As commonly discussed, hot springs for bathing are less important in terms of the thermal energy consumption, but economically more important than any other geothermal resources for direct use in Japan. Therefore, geothermal resources for direct use are here classified into three categories: hot springs for bathing, hot water for thermal uses and geo-heat pumps for thermal uses Installed Thermal Power Installed thermal power is here described on hot water for thermal uses and geo-heat pumps for thermal uses, except for hot spring for bathing. The New Energy Foundation (NEF) in Japan is periodically conducting a questionnaire survey on hot water uses to individual municipalities in Japan once every two year since The latest seventh survey was carried out in the year 2002 and the results were published from NEF (2002). The simplified results were also introduced by Kawazoe and Shirakura (2005). The original results are here introduced from NEF (2002). However, the numerical values on the original tables in NEF (2002) are sometimes incorrect in a strict sense probably due to the fraction treatments (rounding off or up). Therefore, they are here corrected by the check on the spreadsheet type calculations. Difference in the numerical values in the following tables from the original tables comes from these correction procedures. Questionnaires for hot water uses were sent to 260 municipalities in Japan and the answers returned from 147 municipalities. Numbers of facilities of hot water uses in Japan as of March 2002 are shown in Table 13.2 (NEF, 2002). The total number of the facilities is 692 in Japan. The facilities are generally dominant in northern and colder areas, but also known in southern Kyushu. Installed capacity of hot water uses in Japan as of March 2002 is shown in Table 13.3 (NEF, 2002). The total installed capacity of hot water uses is 409 MW t in Japan. The largest field for the hot water utilization in Japan is the snow melting and it is followed by the hot water supply and hotel heating. GIA 2005 Annual Report 105

108 Table Numbers of facilities of hot water uses in Japan as of March 2002 (NEF, 2002). Prefecture Fish breed -ing Cattle shed heating Rice field heating Industry Food Hotel process heating House heating Greenhouse heating Sightseeing facility Balneology Welfare facility heating Public facility heating Snow melting Hot water supply Hokkaido Aomori Iwate Miyagi Akita Yamagata Fukushima Tochigi Gunma Tokyo 1 1 Kanagawa Niigata Toyama Ishikawa Fukui Nagano Gifu Shizuoka Hyogo Wakayama Tottori Okayama 7 7 Hiroshima Ehime 1 1 Nagasaki Kumamoto Oita Kagoshima Total Others Total A questionnaire survey for geo-heat pump uses was additionally initiated by NEF in 2003 and this was the first questionnaire survey for the geo-heat pump uses in Japan. Numbers of facilities of geo-heat pump uses in Japan as of January 2003 are shown in Table 13.4 (NEF, 2003). The total number of the facilities is 276 in Japan. They are mostly used for the house heating and/or cooling and it is followed by the snow melting. The largest facilitated prefecture is Yamaguchi where 91 facilities are installed. Installed capacity of geo-heat pump uses in Japan as of January 2003 is shown in Table 13.5 (NEF, 2003). The total installed capacity of geo-heat pump uses is 4 MW t in Japan that is hundred times smaller than that of the hot water for thermal use. The total installed thermal power capacity of the hot water uses as well as geo-heat pump uses is 413 MW t in Japan Thermal Energy Used Used thermal energy and their capacity utilization factors of hot water uses in Japan as of March 2002 are shown in Table 13.6 (NEF, 2002). The total used thermal energy of hot water uses is 5,139 TJ/y in FY2001. As seen in the table, although the snow melting is the largest utilization field for hot water uses, the capacity utilization factor is very low because it is only used in winter. On the other hand, the capacity utilization factor of the hot water supply is relatively high because the category is required in all seasons. GIA 2005 Annual Report 106

109 Prefecture Table Installed capacity of hot water uses in Japan as of March 2002 (NEF, 2002). Greenhouse heating Cattle shed heating Rice field heating Industry Food Hotel process heating Fish breeding Sightseeing facility Welfare House Balneology facility heating heating Public facility heating Snow melting Hot water supply Others Unit: MWt Hokkaido Aomori Iwate Miyagi Akita Yamagata Fukushima Tochigi Gunma Tokyo Kanagawa Niigata Toyama Ishikawa Fukui Nagano Gifu Shizuoka Hyogo Wakayama Tottori Okayama Hiroshima Ehime Nagasaki Kumamoto Oita Kagoshima Total Table Numbers of facilities of geo-heat pump uses in Japan as of January 2003 (NEF, 2003). Prefecture Sightseeing facility House Public facility Snow melting Others Total Hokkaido Aomori Iwate Akita Yamagata Fukushima Tochigi Saitama Chiba 1 1 Tokyo Kanagawa Niigata Fukui Nagano Gifu 3 3 Shizuoka 9 9 Aichi 1 1 Mie 1 1 Kyoto 1 1 Osaka 3 3 Hyogo 2 2 Nara 3 3 Tottori 1 1 Shimane 1 1 Okayama Hiroshima Yamaguchi Kagawa 1 1 Ehime 1 1 Kochi Fukuoka Oita 4 4 Miyazaki Kagoshima Total Total GIA 2005 Annual Report 107

110 Table Installed capacity of geo-heat pump uses in Japan as of January 2003 (NEF, 2003). Prefecture Sightseeing facility House Public facility Snow melting Others Unit: kwt Total Hokkaido Aomori Iwate Akita Yamagata Fukushima Tochigi Saitama Chiba 3 3 Tokyo Kanagawa Niigata Fukui Nagano Gifu 8 8 Shizuoka Aichi 3 3 Mie Kyoto Osaka 8 8 Hyogo Nara 8 8 Tottori 3 3 Shimane 3 3 Okayama Hiroshima Yamaguchi Kagawa Ehime 3 3 Kochi Fukuoka Oita Miyazaki Kagoshima Total , ,988 GIA 2005 Annual Report 108

111 Table Used thermal energy and their capacity utilization factors of hot water uses in Japan during FY2001 (NEF, 2002). Prefecture Greenhouse heating Fish breeding Cattle shed heating Rice field heating Industry Food Sightseeing Hotel process heating facility Welfare House Balneology facility heating heating Public facility heating Hot Snow water melting supply Others Total (TJ/year) Crude oil equivalents (kl/year) Capacity utilization factor (%) Hokkaido , Aomori , Iwate , Miyagi , Akita , Yamagata Fukushima Tochigi , Gunma , Tokyo Kanagawa , Niigata , Toyama Ishikawa Fukui Nagano , Gifu , Shizuoka , Hyogo Wakayama Tottori , Okayama Hiroshima Ehime Nagasaki Kumamoto Oita , Kagoshima , Total (TJ/year) , Crude oil equivalents 12,445 6, , ,025 3,855 17,380 3,944 7,706 20,716 13,816 44,868 2, ,260 (kl/year) Capacity utilization factor (%) Used thermal energy and their capacity utilization factors of geo-heat pump uses in Japan during the calendar year 2002 are shown in Table 13.7 (NEF, 2002). The total used thermal energy of geo-heat pump uses is 22,340 GJ/y or 22 TJ/y in the calendar year The capacity utilization factor is again low in the snow melting and high in the house heating and/or cooling. GIA 2005 Annual Report 109

112 Table Used thermal energy and their capacity utilization factors of geo-heat pump uses in Japan during the calendar year 2002 (NEF, 2003). Prefecture Sightseeing facility House Public facility Snow melting Others Total (GJ/year) Capacity utilization factor (%) Hokkaido Aomori 2, , Iwate , , Akita Yamagata Fukushima Tochigi Saitama Chiba Tokyo Kanagawa Niigata Fukui , Nagano Gifu Shizuoka Aichi Mie Kyoto Osaka Hyogo Nara Tottori Shimane Okayama Hiroshima , Yamaguchi 3, , Kagawa Ehime Kochi Fukuoka , Oita Miyazaki Kagoshima Total (GJ/year) 38 9,098 3,361 7,109 2,734 22, Capacity utilization factor (%) The sum of used thermal energy of the hot water uses and geo-heat pump uses is 5,161 TJ/y in Japan, although the used period is slightly different such as the fiscal year 2001 (April 2001 to March 2002) in the former and the calendar year 2002 in the latter Category Use The other major use category, hot springs for bathing, is here described. Hot springs for bathing form a widespread market in tourism all over Japan and economically the most important among a variety of direct uses of geothermal energy. For sustainable development of hot springs, nationwide hot spring utilization statistics are annually published from the Ministry of the Environment in Japan in Japanese (Ministry of the Environment, 2006). These statistics mainly consist of distribution of hot spring utilization in each prefecture and chronological change of hot spring utilization. They are here translated to English as shown in Tables 13.8 and All the data are spanned by the fiscal year in Japan that starts from April and ends in March. GIA 2005 Annual Report 110

113 Prefecture Table Hot spring utilization in each prefecture in Japan in FY2004 (Ministry of the Environment, 2006). Spouting hot springs Pumping -up hot springs Spouting hot springs Pumping -up hot springs Hot springs under 25 º C Hot springs above 25 ºC under GIA 2005 Annual Report 111 Hot springs above 42 ºC Hokkaido , , , , ,136 12,757, ,905 Aomori , , , ,433 1,813, ,082 Iwate ,086 51, ,512 2,554, ,341 Miyagi ,885 26, ,545 2,893, ,708 Akita ,408 46, ,831 2,090, ,170 Yamagata ,160 32, ,841 3,375, ,933 Fukushima ,074 54, ,955 5,317, ,202 Ibaraki ,831 15, ,640 1,394, Tochigi ,510 40, ,724 6,318, ,719 Gunma ,352 30, ,533 6,086, ,220 Saitama , , , Chiba ,918 9, ,847 1,946, Tokyo , , , Kanagawa ,627 31, ,280 6,076, Niigata ,008 51, ,076 4,129, ,500 Toyama ,677 14, ,924 1,520, Ishikawa ,757 30, ,664 4,107, ,952 Fukui ,248 7, ,744 1,296, Yamanashi ,999 38, ,595 3,853, ,624 Nagano , ,608 84,531 1, ,853 8,960, ,027,087 Gifu ,850 68, ,056 3,317, ,733 Shizuoka , , , ,454 2, ,243 12,356, ,000 Aichi , ,774 1,874, Mie ,893 46, ,328 3,018, ,424 Shiga ,085 7, ,212 1,084, Kyoto , ,099 1,331, ,425 Osaka , , , Hyogo ,656 40, ,903 3,709, ,191 Nara ,161 11, , , ,919 Wakayama ,595 42, ,528 3,501, ,175 Tottori , ,438 1,404, ,736 Shimane ,822 11, ,253 1,110, ,733 Okayama ,175 15, ,398 1,074, ,103 Hiroshima ,254 26, , , ,646 Yamaguchi ,085 20, ,135 1,979, ,073 Tokushima ,476 4, , , Kagawa , , , ,022 Ehime ,338 14, ,477 1,681, ,917 Kochi , , , Fukuoka ,169 31, , , ,092 Saga , , , ,430 Nagasaki ,539 19, ,850 1,565, ,329 Kumamoto , , , ,518 3,267, ,421 Oita ,053 1,146 3, , , , ,192 6,832, ,307,813 Miyazaki ,218 17, , , Kagoshima , , , , , ,159 2,801, ,361 Okinawa , , FY2004 total 495 1,939 3,114 27,644 5,120 13,805 2,989 5,730 3,759 6,753 13,209 1, ,642 1,936,498 15,332 1,408, ,867,119 7,294 15,098,986 FY2003 total 511 2,280 3,127 27,347 5,189 13,559 2,969 5,629 3,690 6,573 13,093 1, ,891 1,880,287 15,390 1,387, ,285,534 7,006 15,320,428 Yearly gain ,249 56, , , ,442 % ratio to FY2003 Number of jurisdiction health centers Number of municipalities Number of hot spring localities Total number of hot spring source (A+B) Number of used Number of unused hot spring sources hot spring sources (A) (B) Number of hot spring sources by temperature Steam and gas Production rate L/min. Spouting hot springs Pumpingup hot springs Number of accommodations Number of sleeping accommodation capacity Number of annual manday accommodation vistors Number of public baths Number of annual manday accommodation visitors in national resort hot springs

114 Fiscal year Number of jurisdiction health centers Number of municipalities Number of hot spring localities Table Annual change of hot spring utilization in Japan (Ministry of the Environment, 2006). Total number of hot spring source (A+B) Number of unused Number of used hot hot spring sources spring sources (A) (B) Spouting hot springs Pumpingup hot springs Spouting hot springs Pumpingup hot springs Hot springs under 25 º C Number of hot spring sources by temperature Hot springs above 25 ºC under Hot springs above 42 ºC Steam and gas Production rate L/min. Spouting hot springs Pumpingup hot springs IEA Geothermal Energy , ,041 40,701, , ,699 47,519, , ,005 49,471, , ,608 55,251, , ,226 77,561, ,518 13,079 9, ,445 86,743, ,207 10,395 5,757 4, ,110 10, ,516 85,675,621 1, ,667 11,398 5,485 4,541 1,165 1,660 7, ,831 10, ,025 87,371,026 1, ,331 11,913 5,953 5, ,109,633 10, ,439 93,311,028 1, ,003 1,390 12,180 6,060 5, ,143,788 11, ,670 89,634,687 1, ,080 1,479 13,563 5,521 6,087 1,955 1,555 2,235 8, ,207,194 12, ,138 96,050,339 1, ,110 1,590 14,221 5,409 6,525 2,287 1,694 2,429 8, ,258,138 13, , ,551,422 1, ,162 1,609 14,827 5,427 6,844 2,566 1,765 2,411 9, ,334,612 13, , ,261,143 1, ,207 1,748 15,436 5,354 7,028 1,309 1,745 1,889 2,634 9, , ,092 13, , ,051,002 1, ,236 1,802 16,002 5,474 7,288 1,308 1,932 2,007 2,801 9, , ,394 13, , ,616,365 1, ,283 1,845 16,308 5,242 7,554 1,398 2,114 2,062 3,053 9, , ,082 13, , ,915,449 1, ,313 1,901 16,681 5,146 7,893 1,380 2,262 2,267 3,132 9, , ,778 14, , ,463,272 1, ,320 1,916 17,160 5,117 8,086 1,546 2,411 2,165 3,338 9, , ,967 14,688 1,033, ,257,335 1, ,361 1,939 17,491 5,181 8,297 1,455 2,558 2,267 3,346 10, , ,772 14, , ,228,798 1, ,386 1,988 17,733 5,218 8,362 1,501 2,652 2,242 3,274 10, , ,294 14, , ,743,832 2,038 9,656, ,423 1,990 18,183 5,102 8,552 1,673 2,856 2,273 3,437 10, , ,147 14,758 1,001, ,582,166 2,096 9,410, ,440 2,012 18,678 5,129 8,652 1,751 3,146 2,324 3,736 10, , ,424 15,200 1,022, ,269,376 2,082 9,175, ,473 2,033 19,052 4,996 8,721 1,844 3,491 2,320 3,898 10, , ,859 15,619 1,056, ,295,210 2,065 9,370, ,451 2,053 19,504 5,019 8,824 1,886 3,777 2,434 3,955 10, , ,911 15,112 1,062, ,079,659 2,156 9,111, ,470 2,106 19,470 5,001 8,854 2,001 3,614 2,513 4,002 10, , ,030 15,141 1,079, ,757,430 2,257 9,326, ,477 2,118 19,768 5,112 9,055 1,972 3,629 2,525 4,107 10, ,494 1,035,799 15,124 1,073, ,382,651 2,311 9,902, ,497 2,116 20,103 5,069 9,217 2,047 3,770 2,566 4,272 10, ,207 1,055,883 15,014 1,074, ,813,584 2,358 9,982, ,522 2,127 20,151 5,035 9,293 2,030 3,793 2,628 4,277 10, ,829 1,064,701 14,882 1,086, ,090,010 2,460 10,399, ,548 2,145 20,396 5,005 9,384 2,125 3,882 2,696 4,334 10, ,585 1,089,414 15,002 1,096, ,898,046 2,694 11,319, ,574 2,155 20,759 5,098 9,497 2,106 4,058 2,713 4,359 10, ,119 1,138,168 15,413 1,105, ,788,044 2,743 12,264, ,593 2,189 21,095 5,095 9,597 2,210 4,193 2,815 4,544 10, ,773 1,252,447 15,383 1,120, ,507,775 2,884 12,601, ,635 2,254 21,336 5,002 9,759 2,258 4,317 2,870 4,612 10, ,360 1,218,941 14,977 1,146, ,865,438 2,991 12,942, ,685 2,302 21,758 5,012 9,983 2,392 4,371 2,926 4,787 11, ,159 1,256,338 15,085 1,168, ,870,936 3,112 13,964, ,732 2,360 22,353 5,040 10,277 2,409 4,627 3,105 5,088 11, ,367 1,354,205 15,119 1,202, ,138,479 3,283 14,623, ,798 2,382 23,097 5,091 10,639 2,463 4,904 3,092 5,244 11,485 1, ,410 1,427,296 15,082 1,210, ,853,123 3,576 14,149, ,875 2,357 23,568 5,134 10,931 2,463 5,039 3,216 5,371 11, ,678 1,440,965 15,164 1,227, ,246,266 3,867 14,330, ,918 2,383 24,061 5,084 11,291 2,534 5,152 3,274 5,451 11,752 1, ,058 1,495,445 15,227 1,245, ,728,475 4,038 14,031, ,963 2,431 24,679 5,062 11,633 2,661 5,323 3,267 5,692 12,213 1, ,498 1,538,907 15,356 1,264, ,779,626 4,164 13,987, ,015 2,508 25,129 5,053 11,908 2,759 5,409 3,319 5,771 12,368 1, ,108 1,628,592 15,714 1,288, ,572,876 4,375 13,791, ,074 2,565 25,455 5,031 12,131 2,894 5,399 3,405 5,917 12,545 1, ,542 1,676,017 15,504 1,298, ,164,495 4,738 13,712, ,132 2,615 25,822 5,048 12,342 2,814 5,618 3,466 6,049 12,677 1, ,832 1,735,812 15,643 1,332, ,301,952 5,080 13,301, ,184 2,839 26,077 5,080 12,606 2,865 5,526 3,391 6,172 12,916 1, ,930 1,750,050 15,638 1,371, ,711,747 5,525 12,999, ,213 2,893 26,270 5,143 12,714 2,794 5,622 3,484 6,294 12,957 1, ,295 1,772,844 15,548 1,357, ,377,318 5,836 14,716, ,238 2,988 26,505 5,164 12,873 2,868 5,604 3,505 6,443 13,070 1, ,918 1,809,162 15,512 1,363, ,525,810 6,034 15,594, ,280 3,023 26,796 5,186 13,063 3,000 5,552 3,590 6,486 13,226 1, ,328 1,791,219 16,558 1,373, ,097,634 6,433 15,121, ,292 3,102 27,043 5,180 13,328 2,956 5,579 3,626 6,543 13,144 1, ,023 1,856,497 15,389 1,384, ,935,709 6,738 14,953, ,280 3,127 27,347 5,189 13,559 2,969 5,629 3,690 6,573 13,093 1, ,891 1,880,287 15,390 1,387, ,285,534 7,006 15,320, ,939 3,114 27,644 5,120 13,805 2,989 5,730 3,759 6,753 13,209 1, ,642 1,936,498 15,332 1,408, ,867,119 7,294 15,098,986 Number of accommodations Number of sleeping accommodation capacity Number of annual manday accommodation vistors Number of public baths Number of annual manday accommodation visitors in national resort hot springs GIA 2005 Annual Report 112

115 The temperature is only classified into three categories by the thresholds 25 ºC and 42 ºC in these tables. The Hot Spring Law in Japan legally defines hot springs to be more than 25 ºC whatever chemical constituents as the first criterion. The law also defines hot springs to be the higher concentration in balneologically effective constituents listed on the law even below 25 ºC as the second criterion. The former category is hot springs in a narrow sense; whereas the latter is often called mineral springs. The threshold 25 ºC is thus important for the legal definition of hot springs. The other threshold 42 ºC is a Japanese favourite temperature for bathing and economically important when hot spring resort hotels are developed. One of the temperature categories is given as steam and gas. This category is physically obscure, but most of them are ascribed to steam acquired by drilling that encounters the boiling hot springs in the steaming grounds related to volcanoes. Actually, Table 8 shows that this category is dominant in volcanic prefectures such as Akita, Oita and Kagoshima. Normally, steaming grounds are found near the summits of volcanoes where the altitudes tend to be higher up to 1500 m in Japan. When we approximate the atmospheric pressure at 1500 m above sea level and the boiling point temperature of pure water at the pressure, they are estimated to be hpa and ºC, respectively. Therefore, the category steam and gas is roughly ascribed to the boiling hot springs in the temperature more than 95 ºC, varying with its given altitude. 30,000 25,000 Number of hot spring sources 20,000 15,000 10,000 5,000 Steam or gas 42 C =< Hot springs 25 C =< Hot springs < 42 C 0 Hot springs < 25 C Fiscal year in Japan Figure Annual change of numbers of hot springs classified by temperature from 1967 to 2004 in Japan (drawn from the data by the Ministry of the Environment, 2006). It is noted that the total number of hot spring sources is still increasing in Japan. The total number was 27,347 as of the end of March 2004 and 27,644 as of the end of March 2005 as shown in Table It is no doubt that these increasing hot springs are entirely developed by drilling. The chronological trends of numbers of hot springs classified by temperature are shown in Figure 13.7, where the total numbers are less than the actual total numbers in the year because some hot springs have no discharge temperature information. The hot spring utilization statistics published from the Ministry of the Environment in Japan are valuable as the nation-wide data, but they do not give us the total discharge thermal energy and the GIA 2005 Annual Report 113

116 detailed spatial distribution of hot springs in Japan. The Geological Survey of Japan (2005) recently published Distribution Map and Catalogue of Hot and Mineral Springs in Japan (Second Edition) in a form of CD-ROM. This contains the data of only 4,536 hot springs in Japan, but all the data are given in the GIS basis and the discharge rates are given in most of them. Among the 4,536 hot springs, 74 hot springs have no discharge temperature records and 776 hot springs have no discharge rate records. Excepting them, the rest 3,686 hot springs have both of the discharge temperature and discharge rate records. Using the 3,686 hot spring data, the spatial distribution of the hot springs classified by temperature is shown in Figure It is clear that the high temperature hot springs are associated with volcanic zones. Figure Spatial distribution of the 3,686 hot springs in Japan (drawn by GMT software by Wessel and Smith, 1998 based on the data by the Geological Survey of Japan, 2005). From the 3,686 hot spring data set, the total discharge thermal energy from the hot springs can be calculated by the following equation, Q = κd(t d -T r ) where Q is the total discharge thermal energy, d is the discharge rate, T d is the discharge temperature and T r is the reference temperature. Difficulty is the definition of the reference GIA 2005 Annual Report 114

117 temperature, because Japan is longer from the north to south and the average atmospheric temperature varies from the north to south. However, T r is here given to be 15 ºC in the simplest way. Then, the total discharge thermal energy from the hot springs is obtained as 5,773 MW t. Among the 3,686 hot springs, the 449 hot springs are below the reference temperature and the rest 3,237 hot springs contribute to the discharge of 5,773 MW t. The spatial distribution of discharge thermal energy from these hot springs is shown in Figure The 3,686 hot springs are only the 13.3% to all the 27,644 hot springs in Japan. When we simply assume that the value 5,773 MW t is 13.3% to the total discharge thermal energy from all the hot springs, the total discharge thermal energy is estimated to be 43,406 MW t in Japan. This is hundred times larger than the present total installed thermal power capacity of direct uses in Japan. There still remain huge potentials to be developed not only for direct use as well as hot spring power generation in Japan in the future (Muraoka et al., 2004). Figure Distribution of discharge thermal energy from the 3,686 hot springs in Japan (Drawn by GMT software by Wessel and Smith (1998) from the data by the Geological Survey of Japan, 2005). GIA 2005 Annual Report 115

118 New Developments During 2005 As has been mentioned, the New Energy Foundation (NEF) in Japan is periodically conducting a questionnaire survey on direct use of geothermal energy once every two year since The latest published results are those from the fiscal year 2001 and the calendar year 2002 as shown above. They are currently updating by the ongoing survey, coming soon to be published Rates and Trends in Development Total numbers of hot spring sources for bathing were 13,079 in FY1962 and 27,644 in FY2004 (Table 13.9). If we simply apply a linear trend to them (Figure 13.7), the increment of the 347 hot spring sources are newly developing every year. The statistics of hot water uses in the fiscal year 2001 and geo-heat pump uses in the calendar year 2002 are still small, but it seems no doubt that they are rapidly growing due to the recent steep rise of oil prices Number of Wells Drilled Recent increase of hot spring sources for bathing is undoubtedly performed by drilling. Therefore, the number of drilled wells is roughly the same as the increment number of hot spring sources (Table 13.9). The numbers of drilled wells for the hot water uses and geo-heat pump uses are not given in the results of the questionnaire surveys (NEF, 2002; 2003). Some case may be developed by one well such as a hot water use but other case may be developed by several shallow wells such as a geo-heat pump use. However, it seems clear that the number must be at least larger than the number of the facilities (Tables 13.2 and 13.4) Energy Savings Fossil Fuel Savings/Replacement The total geothermal electricity produced in Japan saved 0.89 Mtoe (million tonnes of oil equivalent) in FY2004. The crude oil equivalent value of the hot water uses is 158,260 kl/y (Table 13.6). This value is calculated from the METI s authorized method where the boiler efficiency for the crude oil use is assumed to be 0.85 and the thermal conversion factor to crude oil is assumed to be 38.2 MJ/l (NEF, 2002). The value 158,260 kl/y in a crude oil equivalent liter unit is converted by the conversion factor 1 kl = toe into 171,092 toe/y. The used thermal energy of the geo-heat pump uses is given as 22,340 GJ (Table 13.7). Conversion of geo-heat pump energy to the crude oil equivalent needs a more complicated method depending on its corresponding baselines. For this reason, NEF (2003) has not estimated the crude oil equivalent (Table 13.7). However, if we use the procedure for the thermal basis as the same as the hot water uses, the crude oil equivalent is estimated to be 744 toe/y. Probably, this value may be the minimum estimation. The sum of the hot water uses and geo-heat pump uses is 171,836 toe/y. Hot springs for bathing are also saving amounts of fossil fuel when we compare to taking hot bathes in home. However, the estimation is here omitted. The sum of annual geothermal electricity and geothermal direct use is given as 1.06 Mtoe, although the statistical period is different Reduced/Avoided CO 2 Emissions When we adopt the CO 2 emission values 742 g/kwh for oil thermal power and 15 g/kwh for geothermal power based on the new life cycle assessment (Hondo, 2000), the total geothermal electricity replacing oil thermal power generation is saving 2.40 Mt of CO 2 in FY2004. GIA 2005 Annual Report 116

119 Hot water for thermal use is saving 120,000 tonnes of CO 2 in the 2001 fiscal year (NEF, 2002). In the same thermal basis, geo-heat pump for thermal use is saving 522 tonnes of CO 2 in the calendar year. Therefore, geothermal electricity and direct use are together saving about 2.52 Mt of CO 2 per year, although the statistical period is different Market Development and Stimulation Support Initiatives and Market Stimulation Incentives The New Energy and Industrial Technology Development Organization (NEDO) initiated Geothermal Development Promotion Surveys in prospective geothermal areas where investigation is hampered by survey risks, thereby expediting the development of geothermal power generation by private-sector companies. This program started in The survey program is composed of Surveys A, B and C, varying the scale and content depending upon regional potential and existing data. Surveys have been completed in 55 areas at the end of FY2004. Since 1999, NEDO has carried out Survey C intensively, aiming at a further reduction of survey risks and development lead-time for private-sector companies to construct geothermal power plants based on those preliminary results. Therefore, geothermal reservoir evaluation using large-bore production wells for long-term production tests is included. The four areas selected for the surveys FY2005 are considered to have potentials suitable for binary power plants smaller than 10 MWe. Although the capacity is rather small, each area has particular characteristics that may promote further utilization of geothermal energy in the area; In Onsen-cho, the survey area adjacent to boiling hot spring is expected to have enough geothermal potential for a binary-cycle power plant. In Otari-mura, previous survey results indicate a promising area. In Okushiri-cho, a promising region is clarified from the result of a previous survey. In Shibetsu-Serayama, abundant data are available about geothermal potential including borehole survey data, and the existing wells have already succeeded in the temporary production of steam. In Minase, the area of the second year, two production wells and one reinjection well have been drilled. Geothermal resource was confirmed enough by the production test (Figure 13.10). A step-up to power generation development is highly expected in this area. The Japanese government has taken a leading role in the development of geothermal energy resources. The government has introduced a compensation system for geothermal developers that provide compensation for interest on bank credits to support developers undertaking well drilling, a process that requires a large investment at an early stage. There are two types of subsidies for companies developing power plants, one aimed at the drilling of exploration wells, with a subsidy ratio of 50%; and the other for the construction of production and reinjection wells, and facilities on the ground, with a subsidy ratio of 20%. These systems started in Beginning in 2002, binary facilities in geothermal power generation systems were rewarded with a subsidy ratio of 30%. Actual subsidy record for FY 2005: Production wells were drilled at: Sumikawa, 1 well; Kakkonda, 1 well; Takigami, 1 well; Ogiri, 1 well. Reinjection wells were drilled at: Hatchobaru, 2 wells; Yamagawa, 1 well. Facilities (including new pipe laying, etc.): Sumikawa, Kakkonda, Takigami, Ogiri. Power Facilities: Suginoi. GIA 2005 Annual Report 117

120 Development Cost Trends The latest construction of the geothermal power plant was in 2000 except for the Hatchobaru demonstration binary power plant. There are no recent statistics on development cost. Therefore, it is difficult to mention to the development cost trends. The trend of geothermal power plant design is shifting to the relatively small scale, which uses low enthalpy geothermal fluid and needs shallower-depth wells. Therefore, the total cost of construction tends to decrease, but the unit construction cost is increasing. Figure The production test in the Minase geothermal field, Akita Prefecture, Japan Development Constraints The recent reduction of political supports to geothermal development is a primary constraint to geothermal market promotion in Japan. Internationally, geothermal energy is categorized as renewable energy together with solar, wind, hydro and biomass energy. However, in Japan, only solar and wind are classified as new energy that enjoys protection under the law concerning the Promotion of the Use of New Energy enacted in Geothermal energy was not included. Moreover, in 2001, biomass was added to the list of new energy to be promoted by the New Energy Subcommittee of the Advisory Committee for the Agency for Natural Resources and Energy, but geothermal energy was not. According to the Energy Supply and Demand Outlook GIA 2005 Annual Report 118

121 presented by the government, future growth in geothermal energy is assumed to be zero. Consistent with this perspective, in 2001, the METI decided to cut the entire budget for geothermal energy research and development (Figure 13.1). This decision was purely political Economics Japan s economy has entered a serious deflation recession stage from 1991 after a long-lasting growing stage since Particularly, it has come to be more serious by sliding down to minus growth since the Asian currency crisis in This has dramatically made governmental tax revenues shrink and the government has withdrawn a variety of incentives from many fields, including geothermal R&D. The Japan s economy is gradually recovering in 2005, but the policy to be a small government will still remain for the near future Trends in Geothermal Investment Geothermal power generation is economically marginal in Japan, and therefore, investment to geothermal developments is risky in the current situation where governmental incentives are not fully available. The market for geothermal power generation developments in a private sector is currently inactive except for those of overseas investment by trading companies Trends in the Cost of Energy As Japan is an oil-importing country, the recent steep rise in the crude oil price is changing the energy market regime. Geothermal power generation has been economically marginal in Japan, but, if the crude oil price will further rise, geothermal power generation will soon come to be competitive in cost to the hydrocarbon thermal power generation Research Activities Full-scale national projects for geothermal R&D are no longer ongoing in NEDO, Japan since April However, the Geothermal Research Society of Japan still has 608 members, preserving high-level motivations for geothermal R&D. Research activity is individually performed by national universities, national institutes and private sectors by their own budgets Focus Areas Many researchers who are concerned with hot dry rock systems or enhanced geothermal systems are cooperatively participating in the Cooper Basin HDR Project in Australia, including those from the Graduate School of Environmental Studies in Tohoku University, the Civil Engineering Research Laboratory (CERL) in the Central Research Institute of Electric Power Industry (CRIEPI) and the Institute for Geo-Resources and Environment (GREEN) in the National Institute of Advanced Industrial Science and Technology (AIST). The geo-heat pump system is currently one of the key research issues in Japan that is mainly investigated by Tohoku University, the Graduate School of Engineering in Kyushu University, the Research Institute of Materials and Resources in Akita University and AIST. Geothermal reservoir engineering is mainly carried out by Kyushu University and AIST. Geothermal exploration techniques are mainly studied by Tohoku University, Kyushu University, Akita University and AIST. Nationwide geothermal resource assessments and databases are mainly conducted by AIST. The Master Plan Study in Indonesia that is financed by the Japan International Cooperation Agency (JICA) and technically supported by AIST Government Funded Geothermal researches in national universities and AIST are supported by grants from the government. The amounts used in geothermal researches in Kyushu University, Tohoku University and Akita University are approximated to be 60 million Yen, 5 million Yen and 5 GIA 2005 Annual Report 119

122 million Yen in 2005, respectively. The amounts used in geothermal researches in AIST are dispersed in several research groups and totally approximated to be 20 million Yen in the year Industry Funded Funds for geothermal R&D in a private sector are not necessarily open to public and difficult to estimate. Japans turbines and generators still have the 75% share in the world geothermal power plants and these makers may be investing amounts of budgets for this R&D field. The electric companies and their institute, CERL in CRIEPI, are using amounts of budgets for geothermal R&D Geothermal Education An international group training course on geothermal energy for three months a year has been conducted by the Earth Resources Engineering Department of Kyushu University at the request from the United Nations (UNESCO) and financed by JICA (OTCA) since This course was upgraded into the advanced course in geothermal energy for six months from 1990 to 1999, and further renewed into the course on geothermal energy and environmental sciences from 2000 to Although many countries requested that the course would have still continued, it was terminated in 2001 by the ODA budget decrease. Totally 393 specialists from 37 countries have participated in these group training courses during the operating 32 years. A new geothermal course was initiated at Kyushu University on October 2002 following the end of the JICA course. It is a doctoral program in the Graduate School of Engineering entitled: International Special Course on Environmental Systems Engineering. Twenty students are admitted per year into the Graduate School of Engineering, ten of which are awarded with MEXT (Ministry of Education, Culture, Sports, Science and Technology) Scholarship. Participants in this new course study under five advanced departments of the Graduate School of Engineering Earth Resources Engineering, Civil and Structural Engineering, Urban and Environmental Engineering, Applied Quantum Physics and Nuclear Engineering and Maritime Engineering. Due to the international nature of this course, all the education is done by the English language International Cooperative Activities In contrast with the retreat in incentives to domestic geothermal developments, the Japanese government is enthusiastically undertaking to assist acceleration of geothermal developments in Asia. This currency will hopefully rebound on the domestic geothermal market in turn in the near future JICA Yangbajain Project JICA has been in charge of the geothermal development activities for developing countries since The Yangbajain Geothermal Development Project in Tibet, China, has been conducted from 2001 to The Tibet Railway will soon be connected from Golmud in Qinghai to Lhasa in Tibet on July 2006 (Figure 13.11), so that electricity demands will quickly increase in Lhasa. As the present Yangbajain geothermal power plants of 25 MW in the installed capacity are producing fluids from a very shallow reservoir at a depth from 200 to 300 m. The reservoir is insufficient for the expansion of the power plants. Then, the JICA Project has sought a deeper reservoir in the northern slope of the Yangbajain geothermal field. The well CJZK3001 was drilled to a depth of 2,249 m and encountered a productive reservoir. Unfortunately, the casing was broken at a depth of 200 m that coincided with the present production zone. However, China still keeps a deep productive well ZK4001. Therefore, JICA supplied the flow test facilities (Figure 13.12) as well as a very long pipeline (Figure 13.13), and successfully conducted the flow test in 2005 for the future expansion of the Yangbajain geothermal power plants. GIA 2005 Annual Report 120

123 Figure The almost completed Tibet Railway, a highest-altitude railway in the world. The photograph taken between Nagqu and Yangbajain, July 2, Figure A wellhead of the well ZK4001 and the separator for the flow test. GIA 2005 Annual Report 121

124 Figure A long pipeline running from the well ZK4001 to the Yangbajain power plant JICA Master Plan Study in Indonesia The JICA has conducted the Project Formation Survey for the Master Plan Study for Geothermal Power Development in the Republic of Indonesia at the request from the Indonesian government in Geothermal resource potentials for power generation in Indonesia are estimated to be 27,357 MW e, undoubtedly the largest geothermal resource country in the world, whereas the installed capacity is still 807 MW e as of 2004, only 3% to the total resource potentials. In addition, Indonesia has slid down to an oil-importing country since 2002 and the diversification of the primary energy sources is a necessary issue. Particularly, geothermal energy is one of the potential candidates for alternative energy sources. The Indonesian government drew up the National Energy Management Blueprint where a challenging target 9,500 MW e in the geothermal power capacity was planned in the year To attain the goal, the Indonesian government launched several new policies. The Geothermal Law was legislated in Re-organization of the geothermal sector in the government has been made in the end of The Master Plan Study for Geothermal Power Development in the Republic of Indonesia aims at the systematic support to these efforts by the Indonesian government. The output of the Master Plan Study for Geothermal Power Development in the Republic of Indonesia will be a database for systematic assessment of representative geothermal fields in Indonesia and a scenario for the systematic geothermal developments. The project is scheduled in a relatively short term from April 2006 to September 2008 during 18 months. GIA 2005 Annual Report 122

125 JBIC ODA Loans Activity in Indonesia The Japan Bank for International Cooperation (JBIC) was established in 1999 in order to undertake lending the ODA soft loans to developing countries for their economic and social developments. Recently, JBIC has enthusiastically been conducting the ODA soft loans to geothermal developments in Indonesia at the request from the Indonesian government. For example, JBIC decided to lend 5.9 billion Yen to the geothermal development in the Lahendong geothermal field, Sulawesi in March 2004 and decided to lend 20.3 billion Yen to the geothermal development in the Ulubelu geothermal field, southern Sumatra in March Likewise, JBIC seems to be going to lend the ODA soft loans to geothermal developments in Indonesia, almost once a year References Geological Survey of Japan (2005) Distribution Map and Catalogue of Hot and Mineral Springs in Japan (Second Edition, CD-ROM Edition). Geological Survey of Japan, AIST, Digital Geoscience Map GT-2 (in Japanese with English abstract). Hara, Y. (2005) Electric power. In Annual Energy Review-2004, Journal of the Japan Institute of Energy, 84, (in Japanese). Hondo, H. (2000) Evaluation of CO 2 emission of individual energy sources in their life cycles. CRIEPI News, 338, Central Research Institute of Electric Power Industry, 5p (in Japanese). Kawazoe, S. and Shirakura, N. (2005) Geothermal power generation and direct use in Japan. Proceedings of World Geothermal Congress 2005, 7p. Ministry of the Environment (2006) State of Hot Spring Utilization (in Japanese). Muraoka, H., Sasaki, S., Sawaki, T. and Kimbara, K. (2004) Preliminary resource assessment of hot spring power generation in Japan. Proceedings of the 6th Asian Geothermal Symposium, NEF (2002) The status of geothermal direct uses in Japan (March, 2002). Chinetsu Energy (Geothermal Energy), 27, (in Japanese). NEF (2003) The current status of geothermal direct uses in Japan (January, 2003). Chinetsu Energy (Geothermal Energy), 28, (in Japanese). Thermal and Nuclear Power Engineering Society (2005) Present State and Trend on Geothermal Power Generation in Japan. 89p (in Japanese). Wessel, P. and Smith, W.H.F. (1998) New, improved version of the Generic Mapping Tools released. EOS Trans., AGU, 79, 579. Authors and Contacts Hirofumi Muraoka, Institute for Geo-Resources and Environment, National Institute of Advanced Industrial Science and Technology (AIST), Tsukuba, Ibaraki, Japan; hiro-muraoka@aist.go.jp Chitoshi Akasaka, Energy and Environment Policy Department, New Energy and Industrial Technology Development Organization (NEDO), Kawasaki, Kanagawa, Japan GIA 2005 Annual Report 123

126 NATIONAL ACTIVITIES Chapter 14 Republic of Korea 14.0 Introduction It is well known that the geothermal resources in Korea is characterized by absence of hightemperature resources for power generation and hot springs are associated with localized, deeplyconnected fracture system mainly in the granite area. Recently we identified a geothermal anomaly in terms of high heat flow and geothermal gradient at the Tertiary sediment area in the southeastern part of Korean Peninsula, where the low-temperature geothermal development program is now being carried out. Geothermal heat pump installation is now booming and thus government research and development (R&D) program is focused on systematic utilization of shallow geothermal resources such as studies on borehole heat exchanger and groundwater thermal energy utilization. In 2005, a systematic approach to investigating subsurface thermal and hydraulic properties to analyze the thermal behaviour during geothermal heat pump operation was made in a borehole heat exchanger site and continuous monitoring of temperature profile along the heat exchange is being made. New low-temperature geothermal potential has been identified at an island close to Seoul, the capital of Korea, and a drilling led to hot water of 70 C overflowing the well. According to geophysical survey results, there exists a series of fractures for hot water conduit and we expect higher temperature resources to be exploited National Policy Strategy The Korean Government does not have independent strategy for geothermal yet but new and renewable energy policy. In 2000, the government began to establish the foundation for certification research and performance analysis with an aim to promote the use of renewable energy. The development of Korean new and renewable systems began by focusing investment on the technology development in the three selected areas of photovoltaic, wind power and fuel cell with big market potential. The Second Basic Plan for the Development, Use and Supply of New and Renewable Energy Technology (2003~2012) was established in 2003 along with detailed promotional plans for the annual development and supply of new and renewable energy sources to achieve the goal of increasing the use of new and renewable energy to 3% by 2006 and 5% by Legislation and Regulation The Alternative Energy Development Promotion Act was enacted in 1987 and the New and Renewable Energy Technology Development Project was launched in In addition, the Alternative Energy Development Promotion Act was amended to the Alternative Energy Development and Use Promotion Act in 1997 to promote the use of new and renewable energy and to launch case supply projects as well as to offer long-term low-interest loans, tax benefits and government/public funds for those using new and renewable energy. GIA 2005 Annual Report 124

127 Also the Basic Plan for New and Renewable Energy Technology Development & Supply was established in 1997 to promote the development and supply of new and renewable energy technology Progress Towards National Targets The total use of new and renewable energy at the end of 2005 is estimated to reach 6.6 million ton of oil equivalent (TOE) accounting 2.8% of the total energy consumption. The annual growth rate of new and renewable energy (1995~2005) is at an average of 23.0%, which is about four times faster than the increasing rate of total energy consumption. However, it only amounted to 2.8% of the primary energy at the end of 2005, which is still significantly lower than most of advanced countries. Status and prospect of geothermal energy still does not seem significant because government program focuses on the three major items such as photovoltaic, wind power and fuel cell. Fortunately, however, importance of geothermal utilization is being acknowledged by the government and the public side. Therefore, we expect some remarkable progress can be made in the next five years Government Expenditure on Geothermal Research and Development In 2005, total investments by government reached some US$ 6 million including: Development of deep-seated, low-temperature geothermal resources : $ 3 million. Information system of geothermal resources distribution and utilization : $ 1 million. Various geothermal heat pump utilization programs: $ 2.1 million. This shows about 20% increase comparing 2004 and this is mainly due to newly launched Information system of geothermal resources distribution and utilization program Industry Expenditure on Geothermal R&D Industry expenditure is still quite small and mainly a type of matching fund to government R&D funding which reaches 15% up to 50% of total budget depending on the size of business. In 2005, total amount is estimated to be some US$ 0.8 millions Current Status of Geothermal Energy Use in Electricity Generation There is no geothermal power generation in Korea at the current time Direct Use In Korea, annual statistics is to be available by the end of the first half of the next year, thus the data is from 2004 utilization (sections , and ) Installed Thermal Power By the end of 2004, the installed thermal power is 23.2 MWt including hot spar usage and heat pump (see Table 14.1). GIA 2005 Annual Report 125

128 Thermal Energy Used Thermal energy used in 2004 is estimated to be 220 TJ and capacity factors are 0.38 and 0.18 for hot spar and heat pump, respectively (see Table 14.1). Table Geothermal direct heat uses in Korea as of December Use Installed Capacity (MW t ) Annual Energy Use (TJ/y) Capacity Factor Bathing and Swimming Geothermal Heat Pumps Total Category Used Direct use in Korea includes only bathing (hot spar) and heat pump (see Table 14.1) New Developments During 2005 Low-temperature geothermal development program in Pohang is still on-going Rates and trends in development No data available Number of Wells Drilled There are several pilot wells in Pohang, the low-temperature geothermal development site, and a newly developed hot water site near Seoul; no production/reinjection wells completed Energy Savings Energy saving is still negligible amount and there is no statistics available Market Development and Stimulation Support Initiatives and Market Stimulation Incentives The Korean Government offers long-term low-interest loans, tax benefits and government/public funds for those using renewable energy. In 2004, the amount of subsidizing and long-term loans for geothermal installation was US$ 5.3 million. Also from 2004, in construction of all public buildings bigger than 3,000 m 2 in area, more than 5% of total budget must be used to install renewable energy equipment Development Cost Trends No data available GIA 2005 Annual Report 126

129 14.4 Development Constraints Technical and Social Barriers A barrier to progress of geothermal heat pump in technical and scientific point of view may be explained by lack of information on the thermal properties of subsurface materials and lack of scientific knowledge on hydrogeological conditions influencing heat extraction/injection rate. Also general perception that geothermal heat pump system is of high initial cost while there does not exist any guaranteed example of performance since it is quite beginning stage. Therefore, people tend to consider that a natural gas or an oil boiler is cheaper in initial stage and durable Environmental Issues The Groundwater law states that all boreholes must be reported on depth and purpose prior to drilling. Also if somebody is to use groundwater, he or she must undergo environmental impact evaluation and submit its result. It is also effective for groundwater thermal utilization even though subject to re-injection. Heat pump business society claims that heat extraction from groundwater will not affect the quality of the water and thus thermal utilization should be free from such regulation. Some arguments are still going on Economics Trends in Geothermal Investment Governmental investment to geothermal has steadily increased since Investment from industry has also increased as a matching fund to government R&D budget. Table 14.2 is rough summary of investment from Table Recent trends in geothermal investment (in thousand US dollars). Source Government 3,400 5,200 6,100 Industry * 830 Total 3,970 6,160 6,930 * This includes temporal investment for deep fracture zone survey in an area of geothermal potential Trends in the Cost of Energy Because 97% of fossil fuel is imported, energy cost in Korea reflects recent high oil price. Price of electricity, however, does not change much partly due to high portion of nuclear power generation ( 40%) and partly due to government policy. Average electricity price is about US 7.5 cents/kwh Research Activities Focus Area R&D activities in Korea are focused on 1) low-temperature geothermal water development, and 2) geothermal heat pump application. Almost all of the research activities are initiated by government fund. GIA 2005 Annual Report 127

130 Government Funded R&D R&D in geothermal investigation, exploration and exploitation is led by Korea Institute of Geoscience and Mineral Resources (KIGAM), the only government funded research institute on geoscience field in Korea. The Geothermal Resources Group of KIGAM is leading the two major government funded R&D program: Development of deep-seated, low-temperature geothermal resources and Information system of geothermal resources distribution and utilization. Some other research on geothermal heat pump installation for cooling and heating of buildings is performed by the other research institutes and private sector, which occupied 30% of government funding in In the year of 2003, KIGAM launched a project to develop the geothermal water in the area showing high geothermal anomaly, north of Pohang city, the southeastern part of Korea, for district heating and agricultural application. The target area was selected first by the geothermal anomaly shown from heat flow and geothermal gradient maps. Next, lineament distribution analysis using Landsat image and from structural geology mapping was applied to figure out possible deep fractures that would work as geothermal water conduit. The area belongs to the Tertiary Pohang Basin overlying Cretaceous sedimentary rocks, biotite-granite intrusion and Eocene volcanic rocks such as tuff. The Pohang Basin consists of Miocene marine sediments and bottommost clastic sediments layer. The Heunghae basin, the main target of the geothermal exploration, is covered with Quaternary alluvium underlain by these thick Tertiary sediments with relatively low thermal conductivity and thus preserving high geothermal gradient, which is quite uncommon in Korea. Figure Sketch of geology of Pohang site out of core, drill cutting and well logs. GIA 2005 Annual Report 128

131 Figure Drill rig at Pohang site: for 1.5 km deep pilot well. Numerous geophysical survey methods have been applied such as gravity and magnetic surveys for interpretation of regional geologic setting, magentotelluric (MT) and controlled-source audiofrequency MT surveys for mapping the resistivity structure and possible fracture zones, and selfpotential survey to figure out hydrologic condition associated with geothermal flow. Drilling of Figure14.3. Image of resistivity structure of Pohang site as a result of three-dimensional inversion of MT data incorporating adjacent sea effect. two test wells 165 m apart each other, one is rotary well and the other is coring borehole, started in August 2003 to confirm the existence of geothermal reservoir. The rotary well went down to 1.3 km and coring borehole to 1.1 km. The drilling results showed a geothermal gradient of 40 C/km GIA 2005 Annual Report 129

132 and existence of several permeable zones related with fracture systems. Presently, drilling of 2 km deep production well is under development. In 2005, KIGAM started investigating some artesian wells at a small island close to Incheon (the 3rd largest city in Korea) near Seoul, the capital of Korea. Some drill wells of several hundred meters deep met deeply-connected fractures in Jurassic granite and a large amount of brine water overflowing the wells. Measured temperature of the overflowing brine water is as high as 70 C. The results of MT survey and well logging performed in 2005 show that there exists a set of fractures, which means high potential of artesian flow with higher temperature such as 80 C or more. Subsequent drillings will be made soon to confirm the existence of higher temperature brines and to see if it is possible to apply the first binary power plant in Korea to the area. Figure Drill rig and overflowing waters from 1,280 deep well at the island. Geothermal heat pump installation in Korea is exploding but there is no quantitative information on the thermal properties of subsurface materials made yet. Another good source of thermal energy existing at most of alluvial area is groundwater. In the year of 2002, amount of groundwater use for residence and industry reaches up to 5 million tonnes per day that will possibly produce a huge amount of thermal energy for heating and cooling the buildings nearby. KIGAM has just started government funded research program ( Information system of geothermal resources distribution and utilization ) in collaboration with Korea Water Resources Corporation (KOWACO) and some universities to support all the technical basis and feasibility for the shallow geothermal utilization including groundwater as well. Installation of geothermal heat pump for newly constructed office buildings is rapidly increasing and KIGAM has just installed a geothermal heat pump system for its Earthquake Research Center building. The area of the building is some 3,000 m 2 and the capacity of the heat pump system GIA 2005 Annual Report 130

133 reaches 400 kwt. KIGAM had made an observation borehole down to 300 m depth and measured thermal conductivities of drill cores to get the average value of 2.98 W/m-K. Temperatures in the borehole had also been monitored; various tests such as acoustic televiewer logging and pressure test had been made to see temperature changes due to groundwater flow before actual installation of borehole heat exchangers. Finally, thermal response test (TRT) has been performed to find the effective in-situ thermal conductivity of 3.28 W/m-K. This apparent increase of thermal conductivity is believed to be due to groundwater flow across the region when considering that there exist several highly permeable zones from the well logging and pressure test results. Figure Trenches and double U-tubes for borehole heat exchanger for Earthquake Research Center building at KIGAM. A total of 28 boreholes were drilled for heat exchangers and another two monitoring wells were made to monitor subsurface temperature variation caused by heat pump operation. Building construction has just been finished and actual heat pump operation will start from February, Detailed information such as electric power consumption and down-hole temperature profile changes will be monitored and reported as operation times go by Geothermal Education There does not exist regular curriculum for geothermal at university level yet. Public recognition, however, is increasing and there are special lecture courses for HVAC and architectural engineers to introduce general geothermal topics and state-of-the-art heat pump technologies once a year. Also, there are many small seminars about general geothermal topics reflecting increasing public recognition thanks to recent high oil price. GIA 2005 Annual Report 131

134 14.8 International Cooperative Activities Major international cooperative activity of KIGAM is participating IEA-GIA ExCo and Annex VIII. KIGAM also maintains research collaboration with Institute for Geo-Resources and Environment (GREEN) of AIST, Japan, in geophysical exploration of geothermal resources and other geothermal related topics. Author and Contact Yoonho Song, Geothermal Resources Group, Korea Institute of Geoscience and Mineral Resources (KIGAM), Daejeon, Korea; GIA 2005 Annual Report 132

135 NATIONAL ACTIVITIES Chapter 15 Mexico 15.0 Introduction Geothermal energy is, by far, the most important non-conventional renewable energy source utilized in Mexico. Although there is some tradition for direct uses of geothermal energy, mainly related to balneology, the most important use is for electricity generation. Geothermal development for electricity generation started in Mexico in 1959, with the commissioning of the first commercial plant in the Pathé field (central Mexico). By December 2005 the geothermal-based installed capacity for electricity generation was 953 MWe, placing Mexico in third place worldwide National Policy About 82% of the installed capacity for electricity generation belongs to the two governmentowned utilities, namely the Comisión Federal de Electricidad and Luz y Fuerza del Centro (LyFC). CFE is responsible for all electricity generated with geothermal steam. This primary energy source has been utilized for decades for power generation; the technology is considered mature, and it is set to compete under the same bases as fossil fuel, conventional hydro and nuclear technologies. CFE is currently doing feasibility studies to increase the installed capacity and replace some of the older power plants. The aim is to replace 75 MW with 100 MW in Cerro Prieto Field, using the same amount of steam. CFE is also considering increasing by 25 MW the installed capacity in Los Humeros and taking steps to install 75 MW in the partially developed Cerritos Colorados field and undeveloped areas with geothermal potential (see below). Also is currently doing feasibility studies for evaluation the next projects: 50 MW binary power plant in Cerro Prieto Field: replace three five MW unit in Los Azufres Field with 25 MW unit, using the same amount of steam; Research and Development of Hot Water (brine) Injection System in Cerro Prieto Field Current Status of Geothermal Energy Use Electricity Generation Installed Capacity The installed capacity 953 MW e, distributed among the geothermal fields as follows: Cerro Prieto (720 MW e ), Los Azufres (188 MW e ), Los Humeros (35 MW e ) and Las Tres Vírgenes (10 MW e ) Total Electricity Generated: The estimated electricity generation with geothermal steam in 2005 was 7, GWh New Developments During 2005 There were no new geothermal developments in GIA 2005 Annual Report 133

136 Number of Wells Drilled and Work Over Jobs During the year 2005, CFE drilled: 17 geothermal production wells in Cerro Prieto field; 1 injection well in Los Azufres field. For the year 2006, 8 production wells and no injection wells are scheduled for drilling at Cerro Prieto; 2 production wells at Los Azufres Field; and 1 production well in Tres Vírgenes Field. During the year 2005, CFE performed the following work over jobs: 11 on production wells in Cerro Prieto field; 3 on production wells and 1 on an injection well in Los Azufres field; 1 on a production well and 1 on an injection well in Tres Vírgenes field. For the year 2006, plans are to perform 10 on production wells in Cerro Prieto Field; 2 on production wells in Los Azufres Field; and 1 on a production well in Tres Virgenes Field Contribution to National Demand in 2005 Electricity generation from geothermal sources represents around 3.3% of total electricity production in Mexico. The geothermal contribution to electricity generation is more than 1.5 times higher than its contribution to the installed capacity, reflecting the very high capacity factor Direct Use Installed Thermal Power It is estimated that the installed thermal power in Mexico is about 164 MW t. The major use of thermal power is for balneology, at160 sites distributed in 19 states Energy Savings The electricity generated from geothermal steam in 2005 amounted to the avoided consumption of 36 PJ, 15.9 PJ and 8.9 PJ of primary energy from fuel oil, natural gas and coal, respectively, considering the typical mix of fossil fuels utilized in Mexico Market Development and Stimulation Support Initiatives and Market Stimulation Incentives At present there are no incentives for geothermal development in Mexico. The Comisión Federal de Electricidad, the larger of two national utilities, increased its installed capacity for power generation with geothermal sources from 853 to 953 MW e in the year 2003, and this is the only substantial increase expected throughout 2006, although studies for possible new developments and expansions in developed fields are underway (see below) Development Constraints As mentioned above, power generation with geothermal energy is considered conventional in Mexico, and thus it is set to compete under the same bases as fossil fuel, conventional hydro and nuclear technologies. Therefore, it is fair to say that the main constraint for further geothermal development in this country is its economic disadvantage against modern fossil fuel generation technologies. At least in one case, namely that of the La Primavera geothermal field, which is a fully proven resource, development has come to a full stop because of concerns from the local (State) government about possible environmental impacts. GIA 2005 Annual Report 134

137 15.5 Economics Trends in Geothermal Investment Foreseen As mentioned above, although the target for geothermal development in the present federal administration has been met, studies are underway in CFE for future developments in the order of 25 MW in Los Humeros, 100 MW in Cerro Prieto that will replace 2 of the older units (75 MW) and 75 MW in Cerritos Colorados (La Primavera), 50 MW binary power plant in Cerro Prieto Field: replace three 5 MW units in Los Azufres Field with 25 MW unit as well as the development of new fields in Acoculco, San Pedro, La Soledad and Tacaná Trends in the Cost of Energy The increase in the average price of electricity has accelerated in the last few years (~5.4% from 2000 to 2001, 14% from 2001 to 2002 and higher increases after 2002), reflecting in good measure the trend of fossil fuel prices Research Activities Most geothermal research activities in Mexico are focused on development and exploitation of resources for power generation. Specifically, they are aimed to improve the knowledge of the fields and thus the ability to predict their behaviour under continued exploitation. Some effort is spent in exploration of new areas with geothermal potential. The federal government funds practically all geothermal research Geothermal Education The University of the State of Baja California (UABC) offers a Geothermal Training Program (10- month program) which, in addition to the program offered by Iceland and the one previously offered by New Zealand, has been utilized by CFE to train some of their young engineers. During the last three years CFE has sent young engineers for training to Japan, under an agreement between JICA and the Mexican government. For the most part, mechanical, electrical, chemical and geological engineers are trained on the job, as part of their professional development in CFE and the Instituto de Investigaciones Eléctricas (IIE). Periodic professional meetings (congresses, seminars, etc.) provide a basis for continued education of geothermal personnel International Cooperative Activities Mexico, through IIE and CFE, has participated in the activities of Annex I (Environmental Impacts of Geothermal Energy Development) and Annex IV (Deep Geothermal Resources), and is now participating in Annex VII (Advanced Geothermal Drilling Technologies) of the International Energy Agency Geothermal Implementing Agreement. In 2005, IIE continued a project for the evaluation of low and intermediate enthalpy geothermal resources in Mexico and Central America, with the aim of promoting direct uses of this energy source. This project is partially supported by the International Atomic Energy Agency. Authors and Contacts Alejandro Abril, Comisión Federal de Electricidad, Mexico D. Nieva, Manager of Technology Transfer, Instituto de Investigaciones Electricas (IIE), Temixco, Mor., Mexico; dnieva@iie.org.mx GIA 2005 Annual Report 135

138 NATIONAL ACTIVITIES Chapter 16 New Zealand 16.0 Introduction Geothermal energy plays an important role in electric power generation and direct use in New Zealand. The contribution to total electricity production remains steady at about 6%, mostly base load power, balancing the weather dependency of some of New Zealand s other renewable energy resources, such as hydro (64%) and wind (0.6%). Renewable biomass electricity contributes 1.4%. Interest in geothermal energy use is increasing because of the growing importance of achieving net reductions in CO 2 emissions under the Kyoto Protocol, (signed by New Zealand in 2003), rising fossil fuel prices, and dwindling gas reserves. Evidence of this is the recent commitment by several major developers (Mighty River Power and Contact Energy) to staged expansion and geothermal exploration expenditure, despite a tougher regulatory environment Highlights for 2005 Mokai Geothermal Field- 39 MW e expansion commissioned, using wells MK New greenhouses operational (using MK2). Wairakei Geothermal Field- Consents for 25 years continued operation of existing power plants at Wairakei and Poihipi were granted. A 15 MW e bottoming binary plant (130 to 90 o C) was completed and is operational. New deep drilling (WK243 to 246) was undertaken in Te Mihi area for ~18 MW e of make-up production. Outfield pumped reinjection commenced (WK305/307). Consents were granted and earthworks commenced for a new $ 350 M, 60 MW power plant (including about 24 new wells) on McLachlan land, with a planned commissioning date of July Tauhara Geothermal Field- There was continued testing of well TH2 for direct steam use for wood processing plant. Commenced drilling of the first new production wells (TH6, TH8) for a nominal 20 MW e power plant/direct use installation, as consented in Ohaaki Geothermal Field- Commenced drilling make-up production wells (BR 51, BR 52) to add an estimated MW e. Rotokawa Geothermal Field- Three deep reinjection wells were drilled, RK16-18, one of which (RK17) has proven to be an excellent producer. Injection is now split between shallow (RK11/12) and deep (RK16) wells. Production expansion plans (beyond 30MW) are under discussion. Kawerau Geothermal Field- Further exploration/production wells (PK5-7) were drilled in the east (Putauaki), and beneath the NSK pulp and paper mill area. Resource consents for new 70 MW power plant were lodged and heard. Plans were put in place for the 2007 commissioning. 1.2 M tradable carbon credits were issued to the project. GIA 2005 Annual Report 136

139 Ngawha Geothermal Field- An experimental supplementary cold water reinjection operation was undertaken to raise subsurface pressures in order to protect surface spring discharges. Mangakino Geothermal Field- Geophysical studies and exploration drilling of 3 deep wells were conducted. There was further geophysical exploration of Rotoma-Tikorangi geothermal prospect, and Lake Rotoiti (Tikitere-Taheke-Centre Basin). Environment Waikato (Regional Council)- The geothermal environmental policy and planning hearing appeal process was completed through the Environment Court (decision still pending) New Zealand National Policy Strategy The energy supply strategy for New Zealand is anticipating a doubling of geothermal energy use over the next 8 to 10 years to replace gas. By 2025 even more geothermal energy will be required to avoid a large increase in coal use, which would compromise Kyoto Protocol commitments. Government policies have been put in place to encourage more development of renewable resources, including geothermal. These initiatives include: The National Energy Efficiency and Conservation Strategy (NEECS) This strategy aims to improve energy efficiency by 20%, and increase use of renewables. The National Climate Change Policy Package (CCPP) This is designed to reduce CO 2 emissions by reducing dependence on fossil fuels and placing more emphasis on renewable sources. Sustainable Development Programme of Action for Energy One of the outcomes of this programme is to ensure that renewable sources of energy are developed and maximised. Resource Management (Energy and Climate Change) Amendment Bill This bill seeks to align national and regional energy and environmental objectives. Development of Geothermal Assets Owned by the Crown Better utilization of government owned geothermal assets. Energy Outlook to 2025 This document, published by the Ministry of Economic Development, has signalled an expected increase in use of geothermal energy for electricity generation to at least 600 MW e by Regional Councils (Waikato, Bay of Plenty and Northland,) have established geothermal policies and plans with which to administer the provisions of the Resource Management Act. GIA 2005 Annual Report 137

140 Progress Towards National Targets Growth in geothermal power generation has been slow but steady. Renewed expenditure in exploration and drilling suggests that progress towards national targets will increase over the next 5 years Current Status of Geothermal Energy Use Electricity Generation As of October 2005, the total installed geothermal generating capacity was 481 MW e, with the total electricity generated amounting to 2,774 GWh/y (2003). In 2005, new developments were commissioned at Mokai (39 MW e ) and Wairakei (15 MW e ). In 2005, new production and reinjection wells were drilled in Rotokawa, Wairakei, Ohaaki, Tauhara, and Kawerau. Three exploration wells were also drilled at Mangakino. Geothermal energy contributed about 6% towards the national total electricity demand Rates and Trends in Development Development has been steady with a small growth in capacity, driven partly by current prices and exchange rates (as the New Zealand dollar has strengthened in recent years the capital costs of geothermal power plants have decreased) and partly by industry positioning for future fossil fuel price increases, the Kyoto agreement on CO 2 emission reductions, and vulnerability to hydro shortfall in dry years Direct Use Direct use at existing plants in Kawerau (pulp and paper mill), Ohaaki (timber drying), Wairakei (prawn farm), and at existing tourist and bathing facilities has remained steady. A 5-hectare glasshouse project was constructed at Mokai, and an estimated 20 new direct use wells were drilled. Direct industrial use is about 300 MW t or 7,413 TJ/yr Research Activities The primary focus of NZ government funded geothermal research, which amounts to about NZ$ 2 M/yr is currently targeted as follows: deep high temperature resources, use of low-enthalpy resources, better use of waste geothermal fluids and environmental effects. New research initiatives include: arsenic removal from waste water using bacteria, improved subsidence modelling and prediction, monitoring changes in natural CO 2 gas and steam emission from thermal areas Geothermal Education Several graduate students were supervised in the MSc and PhD programmes in geothermal engineering and geology at the University of Auckland. The 27 th Annual NZ Geothermal Workshop, held in conjunction with the annual NZGA seminar, was held at Rotorua in November Information brochures on direct use technology were produced (by GNS Science). The NZGA website was also developed as an information source: GIA 2005 Annual Report 138

141 Stephen Bauer of Sandia Laboratories USA participated (with Paul Bixley and Keith Lichti) in a seminar on drilling practices at GNS offices in Wairakei on 22 September Geothermal information may form a significant part of a proposed New Zealand Clean Energy Centre in Taupo International Cooperative Activities New Zealand has collaborative research relationships and links with many international agencies including: USGS (USA), KIGAM (South Korea), GSJ (Japan), AEA (Switzerland), University of Utah, Energy and Geoscience Institute (USA), University of Alberta (Canada) and Tohoku University (Japan). International research collaboration is also actively pursued with the Coso and Icelandic deep drilling and EGS projects. The recent review of the Environment Waikato geothermal policy and plan documents involved experts from Iceland and USA in collaboration with New Zealand experts References Dunstall, M. (2005) update on the existing and planned use of geothermal energy for electricity generation and direct use in New Zealand. Proceedings of the World Geothermal Congress 2005, Antalya, Turkey. White, B.R. (2003) Some recent and current government initiatives related to geothermal energy. Proceedings of the 25th New Zealand Geothermal Workshop 2003: 1-8. Author and Contact Chris Bromley, GNS Science, Wairakei Research Centre, Taupo, New Zealand; c.bromley@gns.cri.nz GIA 2005 Annual Report 139

142 Table Utilization of geothermal energy for electricity power generation in New Zealand in ) 2) OP = operating OPr =operating at <60% UC = under construction HP= high pressure B = Binary (Rankine Cycle) BP = back pressure steam IP = Intermediate pressure H = Hybrid (BP steam & B) C = Condensing Steam LP = Low pressure Locality Power Plant Year No.of Status 1) Type of Unit Total Annual Under Name Commissioned Units Unit 2) Rating Installed Energy Construction. or Capacity 2003/4 Planned (MWe) (MWe) (GWh/yr) (MWe) Wairakei Wairakei OP 2 IP - BP 2 x LP - BP 1 x 5 4 LP - C 4 x IP - C 3 x OP B 3 x 5 Wairakei Poihipi OPr 1 IP -C 1 x Wairakei Tauhara 15 Ohaaki Ohaaki OPr 2 HP BP 2 x IP C 2 x Kawerau Tasman P&P OP 1 BP 1 x MRP 70 Kawerau Kawerau Binary OP B 3 X Rotokawa Rotokawa OP H 1 x OP B 3 x OP B 1 x Northland Ngawha OP B 2 x Mokai Mokai OP H 1 x 25 B 6 x OP H,B 18+3x7 39 Total GIA 2005 Annual Report 140

143 NATIONAL ACTIVITIES Chapter 17 Switzerland 17.0 Introduction The 2004 Country Report of Switzerland forms a chapter in the GIA Annual Report 2004, which can be found on the IEA-GIA website under Publications. In 2004 a statistical survey was carried out to investigate geothermal energy use in Switzerland. (Signorelli et al. 2004). The findings about installed capacities, energy produced, fossil fuel and CO 2 emission savings etc. are reported in the Swiss Country Update Report prepared for WGC2005 (Rybach and Gorhan 2005). For 2005, there are no new statistical data; the numbers have been estimated on the basis of the experienced trends in the last few years. The EGS project Deep Heat Mining in Basel (including drilling to 5 km, stimulation, circulation tests) proceeds well, with drill site preparations and the installation of a seismometer array in observation wells in Some further details are provided below. The key achievement of Switzerland is still in the use of shallow geothermal resources by groundcoupled heat pumps. An evaluation of available worldwide data reveals that Switzerland occupies a prominent rank in installing and running geothermal heat pump systems National Policy The SwissEnergy program, mainly devoted to a more efficient use of energy (with specific tasks such as energy saving, reduction of CO 2 emissions, a definitive increase of the contribution of renewable energies) and its goals and measures have been described in the 2002 Country Report (also accessible through the IEA-GIA homepage). A new phase for the years was designed in 2005 and was implemented at the beginning of The key player in geothermal energy utilization in Switzerland is the Swiss Geothermal Association SVG, an IGA Affiliate. The SVG has undergone major reorganisation and restructuring in 2005, in order to comply with its new, official role as Swiss Geothermal Competence Center. In addition, the new institution CREGE (Centre de récherche en géothermie; Neuchâtel) provides a network of the geothermal players in Switzerland. With its current staff of 2, the CREGE is engaged in various R&D projects. As far as government expenditure on geothermal R&D is concerned, the Swiss Federal Office of Energy (SFOE) provided financing in 2005 for Research and Development (0.5 MCHF). Pilot and Demonstration (0.12 MCHF; unfortunately terminating in 2006). Activities of the SVG (0.5 MCHF). GIA 2005 Annual Report 141

144 17.2 Current Status of Geothermal Energy Use in Electricity Generation So far there is no electricity generation from geothermal sources in Switzerland. However there is a substantial project underway (DHM: Deep Heat Mining) with the aim to establish co-generation plants based on the EGS principle, at sites in Basel and Geneva, within the next 10 years. At the Basel site a network of observatory drill holes has been equipped with seismic instrumentation to record natural and artificial seismicity. The finances for drilling to 5 km in Basel is from communal and private sources and was secured in 2005; and drilling and testing shall start in May The price increase of materials like casing and some other factors could raise the generating costs up to 20 US /kwh e. The wellhead cellars for three 5 km deep wells to be drilled are already completed (see Figure17.1). At the Geneva site efforts are ongoing to finance and place the first exploratory drilling. Figure The DHM drill site in Basel: Three well head cellars for 5 km deep wells Direct Use There is no new statistic material for The numbers for 2005 have been estimated from earlier data by extrapolation. Table 17.1 shows the numbers, along with the use category, installed capacity, and thermal energy used. GIA 2005 Annual Report 142

145 Table Geothermal direct use in Switzerland in System Installed Capacity Heat Produced Heat pumps with borehole heat exchangers 405 MWt 2750 TJ Groundwater-based heat pumps 91 MWt 594 TJ Geostructures,Tunnel waters 18 MWt 133 TJ Deep aquifers 15 MWt 137 TJ Spas, wellness facilities 81 MWt 1159 TJ Total 609 MWt 4773 TJ Generally, the numbers represent a 10% increase relative to the data of New Developments During 2005 Several new developments proceeded in 2005 and are reported below Geothermal Resource Mapping A large-scale resources assessment is ongoing. So far, deep (>200 m) aquifers are treated; shallow resources for geothermal heat pumps can be included later. The goal is to prepare step-wise a Swiss Geothermal Resource Atlas. The resource quantification is based on a full 3D numerical treatment. The doublet system is considered as the utilization technology. The results are given, for a specific aquifer, in maximum MW t per doublet and in extractable heat over 30 years (PJ). The assessment is being performed at GEOWATT AG, Zurich. The Swiss Federal Office of Energy (SFOE) and the Swiss Geophysical Commission provide financing. Figure 17.2 shows the results (thermal power potential for EGS systems) for a specific resource unit, the crystalline basement top (Swiss coordinate system). Figure Example of geothermal potential mapping (from T. Kohl et al. 2005). GIA 2005 Annual Report 143

146 Technology Development for GHP A system called geothermal basket (Figure 17.3) is now in the market introduction phase, with numerous installations countrywide. The geothermal basket is used like a borehole heat exchanger; the innovative solution for space heating and cooling benefits from the winter-summer phase lag in ground temperatures. Figure The Geothermal Basket consists of a polyethylene spiral. For the design of large GHP installations (see below) the ground thermal conductivity must be known, and the Response Test (RT) method is widely used for its determination. So far, bulky (trailer-size) equipment was needed. To facilitate RT implementation, automatized miniature (45 kg) field equipment was developed and tested at the Laboratoire de méchanique des sols, ETH Lausanne (Figure 17.4). Figure Automatized, miniature (45 kg) RT equipment, developed at ETH Lausanne. GIA 2005 Annual Report 144

147 Large Installations There is a clear trend for increasing utilization of large GHP systems for geothermal heating and cooling. Multiple borehole heat exchanger (BHE) arrays are now becoming common. Figure 17.5 presents a recent example; the extension of Grand Hotel Dolder Zurich to 47,000 m 2 is based on a geothermal heating/cooling/warm water supply system. Another prominent example is the new Terminal E at Zurich airport (Figure 17.6). It is based on energy piles (construction support piles, equipped with polyethylene heat exchanger pipes) to provide heating and cooling. In view of the increasing use of energetic geostructures (ground-contacting structural elements, which can extract from or inject heat to adjacent ground, thus utilizing the shallow subsurface as heat source or heat storage medium), a design manual has been elaborated by a team of specialists and published in 2005 by the Swiss Association of Engineers and Architects SIA (Figure 17.7). Figure BHE field construction phase, Grand Hotel Dolder in Zurich. Figure The new Terminal E at Zurich airport is heated and cooled by an energy pile system. GIA 2005 Annual Report 145

148 Figure Title page of the new design handbook (left), along with further information Use of Warm Tunnel Water The energetic use of warm waters flowing out from deep tunnels under gravity to the portals (free of charge) is a Swiss speciality. In addition to numerous systems already in operation there is now a new addition at the north portal of the Lötschberg Base Tunnel (now under completion) at Frutigen- a Tropical House is under construction. A specific component of the system is fish (sturgeon) breeding, with tests for caviar production already underway Rates and Trends in Development The development clearly goes ahead, especially with BHE-coupled GHPs. In 2005 the total borehole length drilled for BHE increased further (see Figure 17.8) to a total of 800 kilometers (590 km for new buildings, 210 km for retrofits). GIA 2005 Annual Report 146

149 meters Drilling meters for Borehole Heat Exchangers in Switzerland Figure Steadily continuing increase of drilling activities for BHEs in Switzerland. A world-wide survey, published in the IEA Heat Pump Centre Newsletter Vol. 23 Nr. 4 (Rybach 2005) has been conducted to demonstrate the prominent position of Switzerland in the use of GHPs. The survey was conducted in the form of a competition, in the following disciplines : Installed capacity (MWt). Energy use (TJ/yr). Capacity per area (MWt/km 2 ). Capacity per capita (Wt/capita). Energy per area (TJ/yr per km 2 ). Energy per capita (GJ/yr per capita). Units per area (12 kw equivalent units per km 2 ). The worldwide ranking has been established by assigning fictitious medals : Gold: Silver: Bronze: Sweden 3x, Switzerland 2x, Denmark 1x, USA 1x Sweden 4x, Denmark 1x, Norway 1x, USA 1x China 2x, Denmark 2x, Switzerland 2x, Norway 1x Note: The above ranking is a corrected and updated version of the ranking presented in the Swiss Country Report 2004 (included in the GIA 2004 Annual Report). New revised data have been published recently on GHPs (Lund et al. 2005) and the above ranking results are based on these new data. By all means Switzerland is a successful medallist and thus a global player in GHP utilization. GIA 2005 Annual Report 147

150 Energy Savings Fossil Fuel Savings/Replacement- The heat production from geothermal sources ( direct use ) enables the savings of fossil fuels. The annual heat production in 2005, 4,773 TJ, corresponds to the saving of 114,000 toe. Reduced/Avoided CO 2 Emissions- The saving of 114,000 tons of oil per year enables an emission savings of about 350,000 tons of CO 2 per year Market Development and Stimulation Basically the same situation prevails as described in the Swiss Country Report There is a steadily increasing demand for the system of energy contracting. By this system, an electric utility company installs a GHP system and runs it on its own and sells the heat at a set price to the developer/owner Development Constraints Also here the same situation prevails basically as described in the Swiss Country Report Certainly the rise of oil/gas prices is an increasingly strong argument for installing new GHP systems. Nevertheless, natural gas is still a competitor on the market (see price comparison below). A CO 2 tax for heating installations is still in parliamentary discussion Economics According to a recent cost comparison (compiled by the Fördergemeinschaft Wärmepumpen Schweiz FWS), geothermal heat pumps have reached comparable annual costs (including capital costs) with conventional heating systems (Table 17.2). Table Cost comparison of heating systems in Switzerland (reference system capacity 10 kw), from Hubacher/FWS Heating System Efficiency (η/spf*) Investment (CHF) Capital Cost (Annuity, CHF) Operating Cost (CHF) Total Annual Cost (CHF) Oil boiler ,000 1,741 1,483 3,224 Gas boiler , ,882 2,871 Biomass (pellets) ,500 2,692 1,814 4,506 Geothermal heat pump (with BHE) ,500 2, ,929 Air-source heat pump ,500 1,876 1,110 2,986 * Seasonal performance factor 17.6 Geothermal Education In 2005, significant efforts were undertaken for education and information dissemination. The SVG has a mandate from the Swiss Federal Office of Energy SFOE for information and education. F.-D. Vuataz (CREGE Neuchâtel) is responsible for information. Various brochures have been produced and two issues of the SVG Newsletter GEOTHERMIE.CH have been published. T. GIA 2005 Annual Report 148

151 Kohl (GEOWATT AG, Zurich) is responsible for education. Besides regular university lectures various special courses and workshops were organized for postgraduate training also in Research Activities New results of applied research in Swiss projects have been presented above under Direct Use/New Developments. A complete list of government-supported geothermal research projects can be found later in 2006 through: A well-sized presentation of Swiss R&D activities took place at the World Geothermal Congress 2005 in Antalya/Turkey. A total of 10 Swiss papers were presented (9 orally and 1 as poster). Of the 10 presentations, 9 were authored or co-authored by researchers of GEOWATT AG Zurich. Research work in the framework of international projects is summarized below International Cooperative Activities First of all the participation of Switzerland in the IEA Geothermal Implementing Agreement should be mentioned. Besides contributing the Swiss Geothermal Poster to the GIA Exhibition booth at WGC2005, the 14 th GIA ExCo meeting at ETH Zurich, along with a field trip was organized in September An important milestone of Swiss cooperative activities in the IEA- GIA was the completion of the Enhanced Geothermal System Project Management Decision Assistant (EGS PMDA) under Annex III, Subtask C (Leader: Thomas Mégel, GEOWATT AG, Zurich). It can now be ordered through (Figure 17.9). Figure Announcement of the EGS PMDA on the GIA website. GIA 2005 Annual Report 149

152 Switzerland is also active within R&D programs of the European Union. Within the FP6 Framework, cooperation is ongoing in the following geothermal projects: EGS Scientific Pilot Plant Soultz/F. ENGINE. I-GET. GROUNDHIT Acknowledgement Many of the Swiss geothermal activities, especially those of the Swiss Geothermal Association (SVG), were supported, as in previous years, by the Swiss Federal Office of Energy (SFOE). The participation of Switzerland in the IEA-GIA is also financed by the SFOE. Special thanks are due to Mr. M. Geissmann and Dr. H. Gorhan References Kohl, T., Signorelli, S., Engelhard, I., Andenmatten Berthoud, N., Sellami, S., Rybach, L. (2005) Development of a regional geothermal atlas. J. Geophys. Eng. 2, Lund, J.W., Freeston, D.H., Boyd, T.L. (2005) Direct applications of geothermal energy: 2005 Worldwide review. Geothermics 34, Rybach, L., Gorhan, H. (2005) Swiss Country Update In: Proc. World Geothermal Congress 2005 (CD-ROM). Rybach, L. (2005) The advance of geothermal heat pumps world-wide. IEA Heat Pump Centre Newsletter, Vol. 24, No. 4, Signorelli, S., Andenmatten, N., Kohl, T., Rybach, L. (2004) Projekt Statistik Geothermische Nutzung der Schweiz für die Jahre 2002 und Bericht für das Bundesamt für Energie, Bern Internet Links Further information can be found about: The Swiss geothermal program/ The Swiss Geothermal Association: The Deep Heat Mining project: CREGE (Centre de récherche en géothermie; Neuchâtel): Author and Contact Prof. Dr. L. Rybach, GEOWATT AG, Zurich, Switzerland; rybach@geowatt.ch GIA 2005 Annual Report 150

153 NATIONAL ACTIVITIES Chapter 18 United States of America 18.0 Introduction Commercial geothermal electric power production in the United States is generally considered to have begun with operation of the PG&E power plant Unit 1 (11 megawatts) at The Geysers in California in The United States geothermal industry grew rapidly with the assistance of federally supported research and development in the 1970s and 1980s. During the 1990s, the geothermal industry focused primarily on international markets, and only minimal new domestic development occurred. Since 2000, there has been renewed interest in domestic geothermal energy development due to increased domestic power prices, and federal and state incentives such as the federal production tax credit and state renewable portfolio standards. The major event for encouraging geothermal development in 2005 was the passage of the Energy Policy Act of 2005 (EPAct 2005). In referring to the Act, the Geothermal Energy Association stated that the geothermal provisions represented dramatic improvements in the Geothermal Steam Act and would encourage the rapid expansion of geothermal energy use in the western United States. The decision by the Congress in 2004 to include geothermal power in the Production Tax Credit generated significant interest in new geothermal electricity production. Between January and May 2005, there were 483 MW e of new geothermal power purchase agreements signed. These new projects will be located throughout California, Nevada, Arizona, and Idaho. Also, there are other geothermal power projects in Utah, Idaho, and California, and small-scale projects in New Mexico, Alaska, Nevada and California, hoping to move forward, that are not included in this total. It is anticipated that changes resulting from the 2005 energy act will call forth significant new amounts of geothermal electricity and direct use projects National Policy It is the national policy of the United States to improve its energy security by fostering diverse sources of reliable and affordable energy. In developing its geothermal energy resources, the Federal government supports a broad-based geothermal research program and has passed the Energy Policy Act of 2005, which provides a number of provisions benefiting geothermal energy development in the United States. In addition, a number of States are employing renewable energy purchase agreements and other mechanisms to support geothermal development within their respective states Strategy As the lead agency for geothermal energy in the United States, the Geothermal Technologies Program of the Department of Energy (DOE) has established three aggressive strategic goals that drive its activities: GIA 2005 Annual Report 151

154 Table Geothermal Technologies Program strategic goals. Geothermal Technologies Program Strategic Goals Goal # Description Decrease the levelized cost of electricity from hydrothermal systems to less than 5 cents per kilowatt hours (in 2005 dollars) Increase the economically viable geothermal resource to 40,000 megawatts Decrease the levelized cost of electricity from Enhanced Geothermal Systems to less than 5 cents per kilowatt hour (in 2005 dollars) Projected Completion Date In order to achieve these goals, the Program has organized its activities in two areas, Technology Development and Technology Application. The objective of Technology Development is to increase the economic production capacity of geothermal systems. The three components of this activity are (1) finding resources, (2) creating and enhancing techniques for improving geothermal reservoirs, and (3) developing advanced technology in drilling and energy conversion. Technology Application promotes the application of advances made under Technology Development. The focus is on field verification, deployment, and commercialization of new technology, and on removing barriers to technology transfer and geothermal development within the United States Legislation and Regulation Responsibility for geothermal resource assessment and leasing of Federal lands was assigned to the U.S. Department of the Interior in 1970 through the Geothermal Steam Act. Federal sponsorship of geothermal energy research and development began in 1971 with funding of geothermal activities at the Atomic Energy Commission and the National Science Foundation. A major commitment to geothermal R&D was made with passage of the Geothermal Energy Research, Development, and Demonstration Act of 1974 (PL ). Responsibility for federal geothermal R&D passed to the Energy Research and Development Administration upon its formation in January 1975, and subsequently to the DOE in The Energy Policy Act (EPAct), which was signed into law by the President on August 10, 2005, made sweeping changes in many areas, a number of which apply to the nation's geothermal resources. These provisions represent the first major overhaul of the Geothermal Steam Act since its passage in 1970 as well as providing significant incentives for geothermal energy development. Highlights of the act that relate most directly to geothermal include: Leasing- There will be regular lease sales at least every two years in states with geothermal resources, and all leases will be subject to competitive bidding. Royalties- New regulations establishing royalties on a gross proceeds basis (percentage of total income) will be written, leases will start paying royalties in their first year of production, and county governments will receive 25 percent of the royalty income to help mitigate impacts. Direct Use Geothermal- Direct uses of geothermal energy are encouraged under the legislation by allowing simpler procedures for leasing, establishing a fee schedule instead of royalties GIA 2005 Annual Report 152

155 payments, and allowing state and local governments to use geothermal resources for public purposes at a nominal charge. Research- Title IX, Research and Development, includes provisions directing the Department of Energy to continue a geothermal research program, providing specific goals for that effort. The program shall focus on developing improved technologies for reducing the costs of geothermal energy installations, including technologies for: Improving detection of geothermal resources. Decreasing drilling costs. Decreasing maintenance costs through improved materials. Increasing the potential for other revenue sources, such as mineral production. Increasing the understanding of reservoir life cycle and management. Resource Assessment- The bill also includes provisions directing DOE to conduct a near-term assessment of the resource potential for all renewable technologies, including geothermal, with the publication of yearly reports on the results. The USGS is directed to update its 1978 assessment of geothermal resources. Extension and modification of the renewable electricity production credit- Geothermal was awarded the full 1.9 cents per kilowatt hour federal tax incentive. The production tax credit (PTC) is awarded for ten years to new facilities placed in service by Dec. 31, In 2004 Congress expanded the PTC to include geothermal and other renewables, but these would receive the credit for only half of the period, or five years Total Electricity Demand and Supply Total United States primary energy consumption in the Energy Information Agency s (EIA) Annual Energy Outlook 2006 (AEO 2006) reference case* is projected to increase at an average rate of 1.32 percent per year, from 99.7 quadrillion BTU in 2004 to in In comparison, net electricity available to the grid is projected to increase at an average annual rate of 1.4 percent in the same period, while the annual growth rate for renewable sources is projected at 1.7 percent. Thus, despite strong growth in renewable electricity generation as a result of technology improvements and expected higher fossil fuel costs, grid-connected generators using renewable fuels will remain minor contributors to U.S. electricity supply, 8.7 percent of total generation in 2005 and 9.1 percent in (* The Annual Energy Outlook is an annual report produced by the EIA of forecasts of energy supply, demand, and prices. In order to deal with potential shifts in laws, regulations and the economy, the AEO focuses on primarily on a reference case, which uses mid-range assumptions for economic growth and world oil prices, and other cases that assume higher and lower economic growth and higher and lower world oil prices. The AEO also examines cases that explore the impacts of a variety of other assumptions in its energy model, NEMS, such as the impact of new and improved technologies.) Electricity Generating Capacity Total U.S. generating capacity in 2005 was 915 GW. Of this, 95 GW were from renewable sources (Renewable sources include conventional hydroelectric, geothermal, wood, wood waste, municipal solid waste, landfill gas, other biomass, solar and wind power.). Of this total 78 GW were from hydropower and 2.2 from geothermal. The EIA projected that the total capacity in the year 2030 will be 1,146 GW and the renewable portion 114 GW with geothermal projected at 6.64 GW. GIA 2005 Annual Report 153

156 Electricity Generation Total electricity generation in the United States in 2005 was 3,875 billion kwh (net available to the grid). The renewable energy portion was 337 billion kwh, with geothermal at billion kwh. In 2030, the EIA projects the total at 5,469, renewables at 500 and geothermal at 52.7 billion kwh Geothermal Energy Use in Electricity Generation Installed/Operating Capacity At billion kwh in 2005, geothermal energy production accounts for 15 percent of all nonhydropower renewable electricity production in the United States, and about 0.37 percent of total U.S. electricity production. Geothermal electric generation is currently limited to sites in California, Nevada, Hawaii, and Utah. Operating capacity or generation in the United States in 2005 was about 2,200 MW e [California leads with 1,870 MW e (CEC Report, CEC ). At The Geysers, Calpine Corporation and the Northern California Power Agency operate a field with a generating capacity of about 1,000 MW e. Although the Salton Sea is the primary location of geothermal power in the Imperial Valley, other sites such as Heber and East Mesa increase total production in Imperial County to MW e. The other California locations are Coso Hot Springs at 300 MW e, Honey Lake at 6.4 MW e and Long Valley at 40 MW e. Nevada ranks second to California in the development and use of geothermal resources for producing electricity. Nevada has 15 power plants, with an operating capacity of MW. The newest plant, called Galena I, came online in November of In Utah, with only the Blundell plant operating at Roosevelt Hot Springs, the installed net operating capacity is 26 MW. Hawaii has one power plant operating on the big island of Hawaii, called the Puna Geothermal Venture (PGV). PGV delivers an average of MW, which is about 20 percent of the total electricity needs of the Big Island. Numbers as high as 2,478 MW e have been reported for installed geothermal capacity in California. The discrepancy between the reported installed capacity and the actual operating capacity in California is due to the dismantling and retirement of a number of units at The Geysers and also to reductions in steam production at The Geysers. The Geysers peaked at 1,866 MW e and actual generation is now under 1,000 MW e. Some of the reduction in steam production is a result of only about 20% of the produced fluid being injected back into the reservoir. Reduction in steam production is being partially reversed in several units by injection water supplied by the Southeast Geysers effluent recycling system. This project and the more recent one from the city of Santa Rosa inject approximately 18.5 million gallons per day of recycled wastewater into the reservoir to recover additional steam for power production Trends in Geothermal Development As stated in the AEO 2006, Energy Trends to 2030, trends in energy supply and demand are affected by a large number of factors that are difficult to predict, such as energy prices, U.S. economic growth, advances in technologies, changes in weather patterns and future public policy decisions. In addition to these external factors, growth in geothermal electricity development in the United States in the near term continues to be constrained by exploration risk, permitting delays, high capital costs, financial risk, and sometimes, local opposition to development. Limited or no expansion is anticipated at The Geysers as the operators strive to offset declines in production by injecting wastewater while also dealing with an increase in seismicity in the area and the impact on the local population. On the other hand, rapidly rising U.S. energy costs from GIA 2005 Annual Report 154

157 oil and natural gas are increasing the interest in alternative energy sources such as geothermal. In the longer term, significant geothermal growth will depend upon finding and developing high quality sites. In this environment, the Energy Information Administration projects geothermal installations to total 6,640 MW e by A recent (2005) estimate produced by the Geothermal Task Force of the Western Governors' Association projected a near-term potential to expand geothermal capacity to 8,300 MW e in eleven western states by In the reference case, a major factor in the EIA projection for geothermal in 2030 is the EIA estimates for electricity prices. Average delivered electricity prices are projected to decline from 7.6 cents per kwh (2004 dollars) in 2004 to a low of 7.1 cents in 2015 as a result of declines in natural gas prices and, to a lesser extent, coal prices. After 2015, average real electricity prices are projected to increase, to 7.4 cents per kwh in 2025 and 7.5 cents in A recent analysis by the Lawrence Berkeley National Laboratory suggests that the EIA may be underestimating the future price of natural gas. A higher projected price for natural gas (for electricity generation) should lead to higher projections for geothermal (and all renewables) in the future and perhaps lead to increased support for geothermal research and development Non-Electric Applications Installed Thermal Power Forty-four states have experienced significant non-electric geothermal development in the last ten years. The total installed capacity is nearly 5.7 billion BTU per hour (1,700 MW t ), with an annual energy use of nearly 17,000 billion BTU per year (4.5 million barrels of oil energy equivalent) (Lienau, Culver and Lund, 2005) Agricultural Applications- Greenhouses and aquaculture are the two main agricultural uses for geothermal energy. Four commercial greenhouses in southern New Mexico, which at times have employed up to 400 people, occupy more than 50 acres and use geothermal heat to grow plants. In 2002, these projects generated nearly $23 million in sales and paid more than $6 million in payroll. A large greenhouse in rural Utah that grows flowers employs between 80 and 120 people at different times throughout the year (Geothermal Task Force, 2005). District Heating Systems- According to the Geo-Heat Center at the Oregon Institute of Technology, 18 locations in California, Colorado, Idaho, Nevada, New Mexico, Oregon, and South Dakota use geothermal energy for district heating. The potential exists to develop many more. More than 400 communities in 16 western states are located within five miles of a geothermal resource that is suitable for this purpose. Some examples follow of operational district heating projects. The district heating system in Klamath Falls, Oregon provides approximately 6 MW of heat to 20 commercial buildings and for melting snow over nearly 105,000 square feet of sidewalks and bridges. The Oregon Institute of Technology in Klamath Falls, Oregon, uses a district heating system to heat nearly 700,000 square feet of space in 11 different buildings. Boise, Idaho, has four district heating systems. The Warm Springs System has operated since 1892 and is the oldest in the country. The other three systems supply heat to many buildings throughout the downtown area, including the State Capitol and the Veterans Administration Hospital. Combined Heat and Power- Combined geothermal heat and power (CHP) plants use lowtemperature resources (down to 98 o C or 208 o F) in combination with binary or Organic Rankine Cycle (ORC) power units. This combination makes more efficient use of the resource by cascading the temperature (energy use), which in turn improves the economics of the entire system GIA 2005 Annual Report 155

158 since low temperature power generation alone is often not economical below 150 o C or 300 o F as the net plant efficiency for ORC units varies from 12% down to 7% (to 90 o C or 194 o F). This use of geothermal energy is not widespread in the United States, but an example is the Empire Energy power plant in northwest Nevada, where the heat is cascaded to an onion/garlic dehydration plant and also planned to be used for fish raising. The power plant was constructed by ORMAT Energy Systems and went online in mid The plant consists of four 1.2 MW e ORMAT energy converters designed to produce 3.6 MW e of net power at a design temperature of 285 o F (141 o C). The dehydration plant, originally built by Integrated Ingredients, was dedicated in May of The dehydration unit uses approximately gpm ( l/s) of 148 o C) geothermal water for the four stage dryer. Capacity of the dehydration plant is 75,000 pounds (34,019 kg) of onions per day or 85,000 pounds (38,555 kg) of garlic (Geo-Heat Center Bulletins). Figure Binary Geothermal Power Plant, Empire, Nevada. Geothermal Heat Pumps- The number of geothermal heat pumps (GHPs) has steadily increased over the past 10 years with an estimated 600,000 to 800,000 equivalent 12 kw (3.4 ton) units installed in the United States. They have been installed in all the states in the U.S. Lund of the Geo-Heat Center estimates that 60,000 units were installed in the U.S. in 2003 and are mainly found in the Midwestern and Eastern states. Using an average unit size of 12 kw (3.4 tons), the installed capacity in the U.S. is between 7,200 and 9,600 MW t, and based on approximately 1,200 full-load equivalent operating hours per year and a coefficient of performance (COP) of 3.5, the annual energy removed from the ground is between 6,171 and 8,228 GWh (21,060 and 28,080 billion BTU). In the United States, most systems are designed for the cooling load. Cooling load cannot be considered geothermal, as heat is rejected to the ground or ground-water; however, cooling has a role in the substitution for fossil fuels and reduction of greenhouse gas emissions. GIA 2005 Annual Report 156

159 Energy Savings Fossil Fuel Savings/Replacement Geothermal Power Plants- Geothermal electricity in 2005 in the United States displaced about 3.35 million tonnes of oil (Mtoe). The Geothermal Energy Association states that the U.S. generates a yearly average of 15 billion kwh of power, comparable to burning about 25 million barrels of oil, 6 million short tons of coal per year or 150 billion cubic feet of natural gas. (The estimate of the million tonnes of oil equivalent (Mtoe) displaced by billion kwh of annual geothermal electricity generation was calculated by assuming a heat rate for oil of 10,000 BTU per kwh and an energy content of 43 million BTU per tonne of oil. Multiplying the heat rate by geothermal generation and dividing by energy content of oil per barrel yields 3.35 million tonnes of oil (Mtoe)). Direct Use- Lund estimated an annual energy of 17,000 billion BTU per year, which is about 4.5 million barrels of oil energy equivalent. This estimate includes geothermal heat pumps. (Lienau, Culver and Lund, 2005). The Geothermal Heat Pump Consortium stated that every 100,000 homes with GHPs reduce oil consumption by 2.15 million barrels annually and reduce electricity consumption by 799 million kwh annually. The consortium estimates that there are now 750,000 geothermal units installed in the United States. According to their computations, by displacing electricity, this represents the elimination of 4 million tons of carbon dioxide and a reduction in electrical demand of 1,900 MW e Avoided CO 2 Emissions Power Plants- In 2005, the electric power sector emitted million tons of sulphur dioxide and 3.90 million tons of nitrogen oxide. Carbon dioxide emissions were 5,967 million metric tons or 20.1 tons per person (AEO, 2006). In contrast, geothermal power plants emit little carbon dioxide and very low quantities of sulphur dioxide and nitrogen oxides as illustrated in Table 18.2, Air Emissions Summary. U.S. geothermal generation annually offsets the emission of approximately 13.9 million metric tonnes (30,600 million pounds) of carbon dioxide if it is assumed that geothermal electricity would offset electricity generated by coal. The calculation assumes billion kilowatt hours of geothermal electricity at a net offset of about 2116 pounds per MWh.) Table Air emissions comparisons. Air Emissions Comparisons (Pounds per megawatt hour of) Nitrogen Oxides Sulfur Dioxide Carbon Dioxide Coal Oil Natural Gas EPA Listed Average of all U.S. Power Plants Geothermal (flash) Geothermal (Geysers steam) (Table 18.2 is adapted from A Guide to Geothermal Energy and the Environment, by Alyssa Kagel, Diana Bates, & Karl Gawell, Geothermal Energy Association, Washington DC, Earth Day 2005.) GIA 2005 Annual Report 157

160 Direct Use- As noted above, for direct use, Lund estimated an annual energy production of 17,000 billion BTU per year, which is 4.5 million barrels of oil energy equivalent. That amount of oil has a carbon equivalent of about 0.53 million metric tons, which if burned for heating would produce about 1.96 million metric tonnes of carbon dioxide Market Development In the United States there are many activities, regulations, laws and incentives which are directed toward developing a robust and sustainable market for geothermal energy, both electricity and direct use. In the broadest sense, the research and development of the federal Geothermal Technologies Program support market development through developing technology to reduce the cost of geothermal energy. On the other hand, in addition to many other provisions, the Energy Policy Act of 2005 provides a Production Tax Credit of 1.9 cents per kilowatt hour for geothermal electricity. The streamlining of leasing on federal land also supports market development. In addition, many States are aggressively pursuing renewable portfolio standards to support geothermal electricity development in the near term. Although not often explicitly stated, a major goal of these market development activities is to jump-start a geothermal energy sector that can stand on its own Federal Activities The Energy Policy Act of 2005 (EPAct 2005) In addition to the provisions listed under 2. National Policy, B. Legislation and Regulation, the Act has a number of other features that could impact geothermal development. EPAct 2005 directs DOE to study electric transmission congestion and gives DOE jurisdiction to designate national interest electric transmission corridors. The Act gives FERC jurisdiction to issue permits for the construction or modification of transmission under certain specified conditions. The Federal Government goal, for the total amount of electricity it consumes, is not less than 3 percent in Fiscal Years (each year), not less than 5 percent in Fiscal Years , and not less than 7.5 percent in Fiscal Year 2013 and each fiscal year thereafter. The Department of Energy announced in November that the federal government exceeded its goal of obtaining 2.5 percent of its electricity needs from renewable energy sources by September 30, As the largest energy consumer in the nation, the federal government now uses 2375 GWh of renewable energy. When the Executive Order goal was set in 1999, renewable energy from biomass, geothermal, solar and wind projects only accounted for some 173 GWh. Today's figures represent an increase of over 1,000% in the federal government's use of energy from biomass, geothermal, solar, and wind projects GeoPowering the West The GeoPowering the West (GPW) program of the Geothermal Technologies Program works with the U.S. geothermal industry, power companies, industrial and residential consumers, and federal, state, and local officials to provide technical and institutional support and limited, cost-shared funding to state-level activities. By demonstrating the benefits of geothermal energy, GPW increases state and regional awareness of opportunities to enhance local economies and strengthen energy security while minimizing environmental impact. By identifying barriers to development and working with others to eliminate them, GPW helps a state or region create a regulatory and economic environment that is more favorable for geothermal and other renewable energy development. GIA 2005 Annual Report 158

161 National Assessment of U.S. Geothermal Resources The United States Geological Survey has the task of conducting an updated national assessment of the geothermal resources in the United States. The last nationwide assessment was conducted in 1978 and resulted in the USGS publication, Circular 790. It is anticipated that the results of the new assessment will not only better define targets for hydrothermal development, but should provide guidance on where to implement Enhanced Geothermal Systems. The resource base from EGS could potentially offer an order of magnitude higher level of strategic energy resource base not considered in Circular 790. Through a memorandum of understanding, signed in 2004, the DOE cooperates with the USGS in carrying out the assessment Renewable Energy Systems and Energy Efficiency Improvements Loan and Grant Program The United States Department of Agriculture (USDA) announced in March 2005 the availability of $22.8 million to support investments in renewable energy systems and energy efficiency improvements by agricultural producers and rural small businesses. Section 9006 of the 2002 Farm Bill established the Renewable Energy Systems and Energy Efficiency Improvements Loan and Grant Program to encourage agricultural producers and small rural businesses to create renewable and energy efficient systems. The funds will be available to support a wide range of technologies encompassing biomass, geothermal, hydrogen, solar, and wind energy, as well as energy efficiency improvements. To date, the USDA has invested nearly $45 million in 32 states through this program Other Incentives There are a number of other incentives including the Energy Star Financing and Mortgages, a federal loan program which is applicable to geothermal heat pumps as well as other technologies. (Energy Star financing and mortgages are offered by private lenders and give consumers the incentive to purchase Energy Star-labeled products and homes). The Modified Accelerated Cost Recovery System (MACRS) with 50% Bonus Depreciation is a corporate depreciation incentive which is applicable to geothermal electric and the Solar and Geothermal Business Energy Tax Credit is a corporate tax credit applicable to geothermal electric State Incentives Fifteen states now have some sort of renewable portfolio standards (RPS) that require power providers to supply a certain amount of their power from renewable resources by a specific year. In many of these states, electricity generated from geothermal resource can count toward meeting state standards. [National Geothermal Collaborative]. California requires 20% by 2010; NV requires 6% by 2005 and 20% by 2020; Hawaii, 8% by 2005 and 20% by Development Constraints There are many constraints on the development of geothermal energy in the United States and these include: Lack of a large demonstrated resource at a competitive price. The USGS program will provide an updated estimate of the geothermal resource base, while the federal research and development program and the U.S. industry will address technology development and demonstration. Exploration risk. Detecting potentially productive geothermal reservoirs is difficult; exploration and drilling remain expensive and risky. GIA 2005 Annual Report 159

162 Permitting and leasing requirements. Leasing and siting can take long periods and is fraught with uncertainty. Even though the BLM has committed to improving the process, this will continue to be an issue. Developing geothermal energy resources on federal lands will help meet the important goal of diversifying the nation's energy supply with renewable sources. Almost half of the U.S. geothermal energy production occurs on federal land, much of it in California and Nevada. Transmission systems. Because the best geothermal resources are often located in remote areas, tapping them may require an expansion of power transmission systems. EPAct 2005 recognizes this and established a mechanism for resolving conflicts. Direct use systems must be located close to the resource. This need for co-locating the resource with load will limit the amount of energy derived from direct use. Competition from other fuels such as coal and natural gas for electricity generation. Even though the prices of coal and, especially, natural gas are expected to sharply increase in the future, this will only marginally benefit geothermal unless the cost of generating electricity from geothermal is reduced. Reducing costs are a major objective of the federal geothermal program. Environmental issues at specific sites such as emissions, land use, and scenic vistas. Induced seismicity. Induced seismicity is an emerging issue which may or may not prove to be an impediment to the development of geothermal resources. Seismic events typically occur in geologically active areas worldwide, with the number of events increasing exponentially with decrease in magnitude. Natural microearthquakes (microseisms) occur in both undeveloped and developed hydrothermal reservoirs. And larger events may occur; for example, a magnitude 4.4 earthquake shook The Geysers on May 10, 2005, just more than a year after a similar tremor hit the area. The quake hit about three miles northwest of the Lake County residential community of Anderson Springs Economics The United States Department of Energy (DOE) has established goals to collaborate with industry to expand viable geothermal resources to 40,000 MW e and improve performance to reduce costs of power to 5 cents per kwh (2005 dollars). (The 5 cents per kwh goal would be achieved earlier for conventional geothermal, but probably not before 2040 for EGS resources. Modelling indicates that the cost of power today from EGS resources would exceed 27.7 cents per kwh). Achieving the cost and resource goals would provide the opportunity for geothermal electricity to be a significant contributor in the United States energy market. In order to realize this opportunity, the cost of geothermal electricity has to decrease to competitive levels and the economic geothermal resource has to increase significantly. Determining the actual costs of geothermal power is difficult, because no binary geothermal power plants were built in the United States between 1993 and 2005 and flash systems were built only at the Salton Sea area in the Imperial Valley of California. However, the draft report of the Geothermal Task Force of the Western Governors Association (September 2005) stated that the price of electricity from new geothermal power plants ranges between $0.06 per kilowatt hour (flash systems) and $0.08 per kilowatt hour (binary systems). The WGA also estimated the nearterm potential to the year 2015 for new commercial geothermal at 5.6 GW for prices up to 8 cents per kwh with the Production Tax Credit and 13 GW additional would be available at 20 cents. In its 2006 budget request for Geothermal Technology, the DOE estimated the current cost of power in 2005 at 5.5 cents per kilowatt-hour for flash systems and 8.1 cents for binary systems. The distinction between cost and price is not usually made, but research and development focuses on the cost of producing electricity whereas the price can vary and includes more factors. GIA 2005 Annual Report 160

163 18.7 Research Activities The geothermal industry in the United States and its associated service companies conduct very little research and development since they are focused on developing and operating currently defined hydrothermal geothermal resources. However, the limited extent of these resources means that geothermal energy cannot be a significant player in U.S. energy markets unless significant new resources, both hydrothermal and EGS, can be assessed, defined and developed. Research is coordinated closely with the geothermal community to ensure that the research directions and priorities of the federal program address the needs of power producers, consumers, and other interested parties and to ensure that these activities are within the realm of technical feasibility and properly aligned with market forces. Table 18.3 Program structure. Program Manager Analysis Technology Development Technology Application Resource Development Enhanced Geothermal Systems Systems Development Technology Verification Deployment Resource Assessment Reservoir R&D Wellfield Construction Resource Exploration and Definition GeoPowering the West Exploration R&D Field Projects Energy Conversion System Demonstration and Verification Education and Outreach Geothermal Technologies Program Department of Energy In order to achieve its goals, the DOE Geothermal Technologies Program has organized its activities into two interrelated subprograms, Technology Development and Technology Application. The figure below shows how these two subprograms are divided into 16 research areas. Technology Development examines the underlying technology that supports deployment of geothermal energy. As the name implies, Technology Application transfers new or improved technology to the private sector for practical application. This structure reflects the characteristics of the geothermal resource, the geothermal industry, and other potential users. Each of the two subprograms has objectives and performance targets. The Technology Development subprogram works to substantially increase the economic production capacity of geothermal systems. The three components of this activity involve (1) finding resources, (2) creating and enhancing techniques for improving geothermal reservoirs, and (3) developing advanced technology in drilling and energy conversion, the two major cost elements of a geothermal facility. The Technology Application subprogram promotes the application of advances made under the Technology Development subprogram. The focus is on field verification, deployment, and commercialization of new technology, and on removing barriers to technology transfer and geothermal development within the United States. GIA 2005 Annual Report 161

164 Program Strategies: Reduce costs of all elements of geothermal development. Reduce the risk of geothermal exploration. Perform research on Enhanced Geothermal Systems. Assist the USGS in a new national resource assessment. Improve models for analyzing economics and calculating benefits of program activities. Expand industry collaboration and leverage funds through verification projects. Perform cost-shared outreach with States and regions to overcome non-market barriers. As shown in the following table; from Fiscal Year 2000 through the appropriation for Fiscal Year 2006, the Federal allocation for geothermal research and development has remained relatively stable with a peak in 2003 of 28.4 million dollars. Table Program budget history. Geothermal Technologies Program Budget History Fiscal Year Funding (US$ Million) The distribution of the Fiscal Year 2005 budget is shown in the following table: Table Fiscal Year 2005 budget. Geothermal Technologies Program Fiscal Year 2005 Budget (US$ Thousands) Technology Development Resource Development Enhanced Geothermal Systems Systems Development Technology Application Technology Verification Technology Deployment 15,480 2,501 6,687 6,292 9,790 4,812** 4,978*** TOTAL $25,270 ** Includes $1.68M of Congressionally mandated activities *** Includes $1.88M of Congressionally mandated activities GIA 2005 Annual Report 162

165 Other Federal Agencies United States Geological Survey - Department of the Interior Under the National Energy Policy of 2001 (NEP), the Departments of the Interior (DOI) and Energy (DOE) are charged with characterizing the Nation s energy resources and removing obstacles to their development. A critical component of this characterization is the extent to which geothermal resources can contribute to the increasing demand for electric power. The last national geothermal resource assessment (USGS Circular 790 Muffler, 1979) estimated the electric power generation potential of identified geothermal systems at 23,000 megawatts and of undiscovered resources at 72,000 to 127,000 megawatts. In order to meet the NEP mandate and provide the geothermal community with updated resource information, the USGS and DOE signed a Memorandum of Understanding (MOU) for collaborative studies in support of geothermal resource assessments for the period 2004 through The work has three objectives: To revisit and revise the assessment methodology applied in Circular 790. To establish a national database for geothermal resource assessments. To develop new classifications of geothermal resources and means of communicating these classifications. The new assessment will present a detailed estimate of electrical power generation potential and an evaluation of the major technological challenges and environmental impacts of increased geothermal development. The potential impact of the new assessment work goes to the intrinsic value of geothermal energy as a resource. What is the extent to which geothermal resources can contribute to the increasing demand for electricity? It is not an exaggeration to state that the future of the U.S. government s geothermal energy programs depend to a significant degree on the answer to that question. The results of the new assessment will also support the DOE Geothermal Program by quantifying uncertainties in the assessment process and highlighting ways for future funded research to better constrain those uncertainties and advance the state of geothermal knowledge Bureau of Land Management (BLM) Department of the Interior The BLM manages over 261 million acres of public land, primarily in the western United States, and over 700 million acres of Federally-owned subsurface mineral estate. The public lands support an increasing amount of alternative energy, such as wind, solar, and geothermal energy. To achieve the goals of the President s National Energy Policy, the BLM is facilitating the development of renewable energy especially geothermal, wind, biomass, and solar as part of a strategy to diversify domestic energy supplies and meet the Nation s future energy needs. The overall demand for energy and the requirement by some Western states that energy companies generate a certain portion of electricity from renewable energy sources has created a renewed interest in Federal renewable energy resources. Although renewable energy resources comprise a relatively small percentage of the Nation s total energy portfolio, interest in these resources is growing, and these resources can make a larger contribution to our energy supplies in the future. Congress provided an increase in appropriations in Fiscal Years 2004 and 2005 for renewable energy projects. The Department of the Interior and Department of Energy continue to assess the potential for renewable energy development on public lands, as a continuation of the 2003 report Assessing the Potential for Renewable Energy on Public Lands. The BLM currently administers 55 active geothermal leases that allow the operation of 34 geothermal power plants with a total capacity of 1,275 megawatts. These plants supply electricity to more than 1.2 million homes. A recent study GIA 2005 Annual Report 163

166 completed with the Department of Energy s Energy Efficiency and Renewable Energy Office identified BLM-managed lands suitable for geothermal energy development. Geothermal leasing is not allowed on lands within National Parks, wilderness areas, wilderness study areas, or national Recreation Areas United States Navy Department of Defence The Secretary of each military department of the Department of Defence has the authority to develop geothermal resources on military lands. The Navy's Geothermal Program Office, located at the China Lake Naval Air Weapons Station in California, manages and develops geothermal resources for the military. Currently, the two geothermal power plants at China Lake are the only ones on military lands. A private company, which built, owns, and operates the power plants at China Lake, sells the electricity to a utility company and pays the Navy royalties on these sales as well as other types of compensation. The Navy uses about two-thirds of its geothermal revenues for a variety of energy conservation projects; including solar energy systems and updated climate control systems, as well as other energy conservation programs. The Navy spends the other one-third of its geothermal revenues on its Geothermal Program Office, which oversees the activities of the power plant operator and assesses other military sites for geothermal development. The Navy makes case-by-case decisions regarding geothermal development, invests in the initial exploration to identify geothermal resources, provides oversight over geothermal production, and retains all revenues for use by the military Education and Outreach The outreach and education goals of the Geothermal Technologies Program are: To develop and produce information products that convey the realistic potential and promise of geothermal energy use, and associated benefits and impacts. To help ensure that accurate, specific, and current information is available to decision makers and policymakers, researchers, and consumers. To ensure that educators and students at all levels can easily obtain general and technical information helpful in raising understanding and awareness about geothermal principles and technologies. To interpret geothermal research, and develop educational products or databases to support school outreach. Activities toward achieving these goals are implemented through the Geopowering the West (GPW) program, an initiative begun in 2000 to increase the use of geothermal energy in the country. GPW works with the geothermal industry, power companies, industrial and residential consumers, as well as federal, state, and local officials to provide technical and institutional support and limited, cost-shared funding at the state and local levels. GPW identifies appropriate target audiences and produces suitable information products. These products are delivered cost-effectively using the best available channels. Currently, 300 DOEfunded geothermal communications products are in circulation. Interactions with target audiences can occur through special meetings, conferences, exhibitions, and media. Networking with specific audiences, such as state legislators and staff, is achieved through collaborative partnerships with organizations like the National Conference of State Legislators. Additional networking efforts are made through organizations such as the Western Governors Association, Western Interstate Energy Board, Western Electricity Coordinating Council, and the Western Renewable Energy Generation Information System. Reaching all education levels (K-12, university, GIA 2005 Annual Report 164

167 and research staff) ensures that geothermal energy is included in environmental and renewable energy education programs. Teachers are reached though continuing education and local or regional conferences and meetings related to energy and the environment. A representative cross-section of communication products and program outreach activities includes: Geothermal Today Produced every two years, this publication conveys R&D summaries and outreach highlights to general audiences. Program Website The DOE geothermal home page ( is an easily accessible communications, technology transfer, and outreach channel. State Fact Sheets and Case Studies State fact sheets, produced with the participation of state contacts and working groups, are a tool to inform state-level decision makers and policymakers about their states geothermal energy and potential. DOE Geothermal Technologies Newsletter This newsletter is printed four times yearly as an insert to the GRC periodical, Geothermal Bulletin. Information Center and Hotline The Washington State University Energy Office provides consumer-related information and product dissemination services for the various EERE programs. Geothermal-biz.com, the Program s electronic newsletter helps geothermal entrepreneurs companies, small businesses, Native American tribes, homeowners, and individuals develop geothermal direct-use and small power generation projects. The Department of Energy s Geothermal Technologies Program also supports research at universities which provides numerous educational and training opportunities for students. These include: The Energy & Geoscience Institute, University of Utah ( The Energy & Geoscience Institute (EGI) is a university-based, applied earth science research and training organization with a 25-year success record of developing and carrying out multidisciplinary, multi-institutional projects worldwide. Stanford Geothermal Program, Stanford University ( The primary objective of the Stanford Geothermal Program is the development of reservoir engineering techniques to allow for the production of the nation's geothermal resources in the most efficient manner possible. The Program sponsors an annual workshop on Geothermal Reservoir Engineering. Great Basin Center for Geothermal Energy, University of Nevada, Reno ( The Great Basin Center for Geothermal Energy, part of the University of Nevada, Reno, conducts research towards the establishment of geothermal energy as an economically viable energy source within the Great Basin. Geothermal Laboratory, Southern Methodist University ( The Geothermal Laboratory conducts research and trains students in understanding the earth s thermal properties through exploration, resource assessment, database development, mapping, and modeling of geothermal systems. Other organizations within the geothermal community that offer important education and outreach services to the public include: Geothermal Resources Council, ( The Geothermal Resources Council (GRC) develops educational functions on a variety of topics that are critical to geothermal GIA 2005 Annual Report 165

168 development. The GRC convenes special meetings, workshops, and conferences on a broad range of topics pertaining to geothermal exploration, development and utilization. In addition, the GRC periodically schedules a basic, introductory course about geothermal resources and development. Geothermal Education Office ( The Geothermal Education Office (GEO) produces and distributes educational materials about geothermal energy to schools, energy/environmental educators, libraries, industry, and the public International Cooperative Activities The United States is a Contracting Party to the International Energy Agency Implementing Agreement for a Co-Operative Programme on Geothermal Energy Research and Technology (Geothermal Agreement) signed on 7 March The U.S. DOE participates in each of the technical Annexes to the Agreement as either an Operating Agent or Subtask Leader. The DOE Geothermal Technologies Program and its researchers participate in international conferences and meetings References AEO (2006) Annual Energy Outlook 2006 report is available at: Lienau, Culver, and Lund (2005) Geothermal Direct Use Developments in the United States. Geo-Heat Center; January Geothermal Task Force (2005) Geothermal Task Force Report of the Western Governors Association - Clean and Diverse Energy Initiative, January Click the following link to obtain a summary of this report: Author and Contact Clifton Carwile, NREL, Colorado, USA; clcarwile@msn.com GIA 2005 Annual Report 166

169 Appendix A. Members and Observers at the 14 th ExCo Meeting, Zürich, Switzerland, September GIA 2005 Annual Report 167