1. Geothermal energy GEOTHERMAL ENERGY Fausto Batini Enel – International Rome – Italy fausto.batini@enel.it Rome, 2006 6th July

2. Geothermal energy Contents 1° PART 1.introduction 2.Geothermal energy basic concepts Heat sources Geothermal systems 3.The geothermal industry worldwide Electric energy generation Direct use application 2° PART 1. Resource assessment and development Ranking of geothermal prospects Project development Operation and maintanamce 2.Drivers & barriers for the geothermal energy growth Technological challenges Economic and environmental sustainability 3.Conclusions

3. Geothermal energy Geothermal systems

4. Geothermal energy Project can generate revenues through sale of electric energy, water, chemicals and CDM Electric power generation Geothermal project revenues scheme CDM By-products (heat, water, chemicals) (heat, water, chemicals) Process water & chemical products Heat supply

5. Geothermal energy Ranking criteria Development/Risk dimension Technical dimension Because these parameters are not certain for most of the projects, they shall be considered as expected parameters. Resource capacity Technology to apply (Temperature) Depth of the reservoir Transmission line & logistics Chemistry of fluid Energy market price Permitting Enviromental Customers Regulatory and political risk

6. Geothermal energy Regional Reconnaissance (1000's km 2 ) surface prospecting 1-2 years Exploration 100's km2 surface Prospecting exploratory drilling 1-2 years Project Development 10’s km2 Project permitting Drilling of production/reinjection wells Steam gathering system: Power Plant Design and Construction Transmission line 2- 3 years Identification and ranking of the most promising areas for exploration Geothermal resource characterization and economic evaluation Resource assessment and development Main phases Operation & Maintenance 20- 30 years

7. Geothermal energy Investment expenditures

8. Geothermal energy Expenditures & risks of a geothermal project

9. Geothermal energy Cost breakdown (%): ExplorationWell drillingField pipingPower Plant Enthing & McVeigh (2003) 1025560 World Bank 103357 Valgurdur 92368 CEC (2003) Flash 33463 EPRI (1997) Flash 838351 Kutscher (2000) Flash 4852 CEC (2003) Binary 44353 EPRI (1997) Binary 413281 Kutscher (2000) Binary 2476 Lesser (1993) 3961 Investment expenditure breakdown

10. Geothermal energy Table 3: Capital cost of geothermal power technologies. O&M costs value and ranges. Source: O&M Cost ($/MWh) Sanyal (2004)14 - 20* Owens (2002)17.5 - 20 EPRI (2001)[15 - 25] Lovekin (2000)18 - 20 http://www.eere.energy.gov/geothermal/faqs.html[10 - 30] http://www.saintmarys.edu[15 - 45]

11. Geothermal energy Contents 1° PART 1.introduction 2.Geothermal energy basic concepts Heat sources Geothermal systems 3.The geothermal industry worldwide Electric energy generation Direct use application 2° PART 1. Resource assessment and project development Ranking of geothermal prospects Project development Operation and maintanamce 2.Drivers & barriers for the geothermal energy growth Technological challenges Economic and environmental sustainability 3.Conclusions

12. Geothermal energy Drivers Great number of areas with an interesting geothermal potential Electrical energy demand growing within the next years Base load capacity (>95% availability), renewable and domestic energy Employment opportunity Barriers  Technological challanges – deep exploration  Economic - High development cost (logistics, transmission, exploration risk in “green field” project  Regulatory / market / political risks  Environmental - adverse impacts in some areas with local communities Drivers & barriers for the geothermal energy growth

13. Geothermal energy Technological challenges Current efforts are focused on: Identifying Resources development and opportunities Resources Assessment Exploration and Drilling Optimizing Resource Utilization and Management Resource Management Generation Technologies Investigating Applications that Increase system reliability environmental compatibility Technological challenges

14. Geothermal energy Emploiment opportunity GEOPHYSICS RESERVOIR PHYSICS * seismology * gravity * electromagnetics * well geophysics DISCIPLINE *thermodynamics *fluidodynamics *numerical modelling GEOLOGY *structural geology * hydrogeology *petrography *rock mechanics KNOW HOW DRILLING TECHNOLOGIES * Well design * Drilling operations * Mud & cementing DEGREE GEOLOGY ENGINEERING PHYSICS

15. Geothermal energy 8000 6000 4000 2000 0 Bioelectricity Geothermal Small Hydro Photovoltaics Concentrating Solar Power Wind Onshore Wind Offshore Technology Incremental Technologies 8000 6000 4000 2000 0 Bioelectricity Geothermal Small Hydro Photovoltaics Concentrating Solar Power Wind Onshore Wind Offshore TechnologyTechnologies $ per KW Comparison of investment expenditures for different renewable energy project

16. Geothermal energy

18. Conclusions Geothermal energy, like other renewable energy sources (RES), plays an important role to: complement existing energy production systems tackle climate change contribute to an overall strategy of sustainable development reduce dependence on energy imports, thereby ensuring sustainable security of energy supply have a positive impact on regional development and employment