The power plant at Apas Kiri, which is the first renewable and sustainable project of its kind in Malaysia, will supply 30MW to the Sabah Electricity Sdn Bhd (SESB) grid.
Sustainable Energy Development Authority of Malaysia (SEDA Malaysia) chairman Tan Sri Dr Fong Chan Onn, who visited the project site yesterday, said the plant will be Malaysia’s first grid-connected geothermal power plant.

Fong said the renewable power plant is a unique prospect in the district and it is also acceptable to everyone in the community.

The project undertaken by Tawau Green Energy Sdn Bhd (TGE) will reduce the utilization of fossil fuel for power generation in the state grid in line with Malaysia’s sustainable development policy and global greenhouse gas emission reduction.

According to Fong, the process of producing electricity with a geothermal power plant is similar to other thermal power plants that use coal, oil or gas except that it does not require burning any fuel.

Instead, geothermal plant utilizes energy from the natural steam and hot water drawn from the geothermal reservoir, he explained.

The geothermal power plant is a form of green energy which does not require any fuel burning or combustion to produce heat or electricity, he said.

It emits little carbon dioxide, no nitrogen dioxide and very low amounts of sulfur dioxide, he added.

The project is estimated to cost RM419 million (($136 million) and it has also qualified to receive a grant of RM35million ($11.3 m) from the Private-Public Partnership Unit of the Prime Minister’s Department for the access road and water treatment plant.

Source: The Borneo Post

“The Geophysics and Geothermal Research Centre building begins today and is targeted to be completed in November 2012,” said Dean of the university’s Faculty of Science and Mathematics M Nur here on Monday.

Nur added that fossil energy cannot remain plentiful forever and will someday be depleted due to excessive consumption. So, renewable energy such as geothermal would be a needed breakthrough.

“We see the geothermal energy potential in Central Java is located in the Mount Dieng area, Wonosobo and Ungaran, and Semarang regency. The Geothermal Research Center is expected to assist in the use of alternative energy,” he said.

Nur noted that the Geophysics and Geothermal Research Centre building will be built in an area of 2.105 square meters and supported by the state`s Oil and Gas Company, PT Pertamina.

“One day, the use of fossil energy will end. Oil-fueled cars will be finished. Therefore, we need a long-term breakthrough for new renewable energy use,” he said.

According to the university’s Rector, Sudharto, Indonesia’s use of fossil energy is still as high as 95 percent, using petroleum, natural gas, and coal, and the remaining five percent is made up of new renewable energy alternatives.

Though national renewable energy consumption is only five percent, it is targeted to be increased to 17 percent by 2025.

Pertamina General Manager Retail Fuel Marketing Region IV Rifky Hardijanto Effendi added that, with the funding for construction of this facility, this is the third time Pertamina has contributed to construction at the university.

“We distributed Rp7.2 billion to build the Geophysics and Geothermal facility, and earlier we also helped construct the building at the university’s Faculty of Economics and Faculty of Engineering,” he said.”

Source: Antara News via Eco-Business

In the interview Jan Bartak, Senior Head of Business Development of International Power – GDF Suez provides an insight into his company’s role and objectives in the geothermal sector. International Power – GDF Suez signed a PPA for two geothermal projects on Sumatra Island in Indonesia earlier this year (see article).

“International Power – GDF Suez is a leading global independent electricity generating company with 75,579 MW in operation and a significant programme of 12,820MW projects under construction.  In Indonesia geothermal generation can make a sizeable contribution to the energy mix and limit excessive reliance on polluting fossil fuels. International Power has the ambition, experience and skills to contribute to this development, work with reliable partners to become a leading geothermal operator in Indonesia.

Which policy changes do you think could accelerate the growth of the industry?

The applicable electricity tariffs are still too low to cover the high costs and risks of geothermal development. The regulatory framework, despite considerable improvement over the last few years, remains complex and the development process is slow. Many regulations are inherited from the oil&gas and/or mining industries without fully considering the specific nature of geothermal development in terms of exploration risks, environmental impacts, power generation business model based on long-term PPAs etc.

What do you predict the region’s geothermal industry will look like in 5-10 years time?

The industry will probably develop at a slower pace than indicated by most current predictions. Geothermal development is complex, bears considerable risks and requires significant upfront capital investments.  With continuous improvement of the regulatory framework, the pace of development of new projects should accelerate in the next 5 years compared to the last 5 years.

Where else does your company operate and how have your experiences compared?

International Power operates globally and has extensive experience in many emerging markets in Asia, Latin America, Middle East and Africa. While the problems facing IPP development are similar in many of these markets, there are numerous examples showing that clear and transparent government policies and regulations can be determining in accelerating IPP development and guarantee sustainable growth of generating capacities, indispensable for social and economic development.”

Event details: website

Source: Green Power Conferences

The rest of the budget (or $33 million) will be used for the rehabilitation of the Bacon-Manito geothermal plant, the purchase of brand new rigs and transfer of the Northern Negros geothermal plant to the Nasulo site in the Palinpinon geothermal complex, he said.

The 86-megawatt (MW) Burgos wind project in Ilocos Norte will sell its output depending on the feed-in tariff the government will approve for such renewable energy project.

The company said it will no longer borrow for its capex.

Meanwhile, the transfer of the shuttered Northern Negros geothermal facilities is expected to increase the company’s revenues as it will increase the capacity of the Nasulo site.

“We have two adjacent wells in Nasulo that are over 45-MW but [with an installed capacity of] only 20 MW. So with the move of Northern Negros, [there will be] additional capacity,” Mr. Tantoco said.

“Typically, when you look at geothermal power, one megawatt delivers about P40 million to P45 million per year, so the new capacity will mean almost P1 billion new revenues,” he added.

There is no timeline yet for the transfer of Northern Negros but Mr. Tantoco said the firm will be bidding out a contract by June.

After the Northern Negros plant is moved, EDC will build a much smaller plant in the area. It will have a capacity of 5 MW to 10 MW.

In a separate development, system operator National Grid Corporation of the Philippines yesterday said it will expand its the South Luzon Naga substation.

The P355-million project will increase the operational capacity of the substation via a new 100-megavolt ampere transformer.

The project is expected to be completed by the third quarter of the year.”

Source: Business World Online

It is so far unclear how large the geothermal portion of those planned 21,000 MW is, but it shows an interesting direction. While the focus clearly is on solar and with planned and sought after $109 billion in solar investments, seeing geothermal mentioned is a huge step.

Saudi Arabia set up Ka-care as a government agency to oversee the nation’s renewable energy strategy and it is expected that “its plans are likely to be approved later this year”.

The country plans to diversify its energy mix to reduce its dependence on oil, which could allow it to sell the displaced oil on the international markets increasing the IRRs for any renewable investment.

Ka-care estimates that Saudi Arabia’s peak electricity demand will reach 121,000 MW within the next 20 years with about 50 percent of that power generated from hydrocarbon fuel.

Source: Bloomberg

Richard B. Tantoco, EDC president, said profitability should improve over the P615 million ($14.5 million) the company earned last year as one of the generating units of the Bacon-Manito (BacMan) geothermal power plants has gone on stream.

“Ultimately, one of the things this year is BacMan will run for average of about one quarter kasi one unit of BacMan running now,” Tantoco said.

The second largest geothermal company in the world, EDC suffered a drop in its profit to P615 million ($14.5 m) last year from P4.4 billion ($103 million) in 2010 because of repair and rehabilitation work on the BacMan facility and the shutdown of the company’s power plant in Negros.

EDC, which operates the steam field in Sorsogon and Albay where the BacMan plants are located, had to rehabilitate the 130-megawatt power complex after government privatized the facilities in 2009.

As a result, the company had to absorb P1.2 billion ($28 million) in foregone steam field revenues.

The facilities are expected to resume complete commercial operations by the third quarter of this year.

The company’s 49-megawatt Northern Negros geothermal plant, on the other hand, was closed because of deteriorating steam output. EDC suffered a P5 billion ($118 m) impairment loss as a result of the plant’s shutdown.

“Today we are reviewing technologies available [for Northern Negros]” that would involve the transfer of the facility, Tantoco said.

Besides the projected contribution of the BacMan power complex, EDC expects revenues to increase this year with the supply contracts signed with the electric cooperatives, Tantoco added.

Citing analysts’ reports, he said the company should pocket between P6.8 and P7.0 billion ($160-165 m) this year.

For 2012, EDC has programmed a capital expenditure of P20 billion, which will be sourced from internally-generated funds. Of the total amount, P6 billion ($142 m) has been allocated for its planned 86-megawatt Burgos wind project.

The balance will go to the BacMan rehabilitation, acquisition of two new geothermal exploration rigs, drilling of new wells and funding for the transfer of the Northern Negros plant to Nasulo in Southern Negros.

“We have two adjacent wells that are drilled over 45 megawatts [in Nasulo] but installed was only 20 megawatts,” Tantoco said.

Abroad, the company will pursue geothermal projects in Chile, Peru and Indonesia, he added.”

Source: Interaksyon

TGE is a geothermal energy developer. On November 29, 2011, TGE entered into a Renewable Energy Power Purchase Agreement (the “PPA”) with Sabah Electricity Sdn. Bhd. (“SESB”) to supply a capacity of 30 megawatts of electrical power to SESB’s East Coast Sabah power grid. SESB is a utility owned 80% by Tenaga Nasional Berhad, the federally owned electrical generation authority and utility of Malaysia and 20% by the State Government of Sabah. TGE is developing a volcano related geothermal resource known as “Apas Kiri” which is located in southern Sabah near the city of Tawau approximately 100 miles north of Continental’s Bengara-II oil and gas PSC in Indonesia.

TGE will build, own and operate the geothermal power plant and expects to construct it at an estimated total cost of 400 Million Malaysian Ringgit (“MYR”) (approximately US$ 133 Million). TGE plans to commission the plant by the end of 2014 and when completed, it will be Malaysia’s first power plant fired by a geothermal resource.

The PPA provides for a fixed purchase price by SESB of MYR 0.21 per kilowatt hour (approximately US$ 0.07) and a guaranteed off-take of all power the geothermal plant can produce for a fixed term of 21 years from first commercial operation. Over the 21 year life of the PPA, TGE expects to generate about US$ 328 Million in revenues at the PPA price. Additionally, TGE has applied for a Feed-In Tariff incentive from the Malaysian Government which if and when approved, would increase the overall revenue projection.

Further, TGE’s Tawau geothermal power project has been registered and validated with the United Nations Framework Convention on Climate Change under its Clean Development Mechanism program and is enabled to earn certified emission reduction (“CER”) credits during its first ten years of operations. Each CER may be sold and traded on carbon credit exchanges such as BlueNext at a quoted market price (current spot CER price is euro 3.55 each). When operating at its rated capacity of 30 megawatts, the power plant is expected to reduce CO2 emissions by 282,400 metric tonnes per year and earn the same number of CERs (1 CER = 1 tonne CO2 reduction). Under its agreement with a third party carbon credit solutions provider, TGE will be entitled to 75% of the CER revenue or about euro 750,000 per year at current CER spot prices.

Continental is purchasing its 10% stake in TGE from an existing TGE shareholder (the “Seller”). Pursuant to a share sale and purchase agreement, Continental will make a combination of cash payments on behalf of or directly to TGE in the form of shareholder loans repayable by TGE to the Seller. The payments will include set amounts per month plus other cash payments from time to time over a 12 month period to a cumulative and maximum amount of 6 Million Malaysian Ringgit (approximately US$ 2 Million). Continental’s payments are to be administered jointly by Continental and the Seller and utilized solely to provide financing for pre-agreed, front-end geothermal resource development costs incurred by, or on behalf of, TGE. In addition, the share sale and purchase agreement provides Continental with the right to appoint one person to TGE’s Board of Directors and the right to designate TGE’s Geotechnical Director. Continental’s Chief Executive Officer, Richard L. McAdoo has accepted the role of Director and he will also act as TGE’s Geotechnical Director for geosciences and geothermal resource exploration, development and exploitation.

Richard McAdoo stated, “This acquisition of a 10% stake in TGE is a milestone event for Continental. It represents that all important, first big-step of our planned expansion into the renewable electrical power generation sector in a high growth region. The countries of Southeast Asia are all aggressively pursuing additional electrical power generation as the solid growth of their economies places unprecedented demand on current electrical generation capacity. As a result, clean, sustainable and renewable energy projects are generating major interest from regional financing sources and are attracting substantial investment incentives from the highest levels of government. The rapid and impressive track record of TGE in bringing the Apas Kiri geothermal project from concept to PPA is an excellent example of one of many attractive business opportunities available to innovative renewable and unconventional energy companies in Southeast Asia. We are extremely pleased to be joining TGE in this business venture and we are confident that our expertise in geological resource evaluation, risk management, and drilling will make a major contribution to TGE’s success.”

Ramzi Raad, TGE’s Managing Director confirmed, “With our PPA in place and other supporting contracts and approvals either in place or in final stages of completion, we are now shifting our corporate focus to implementing development of the Apas Kiri geothermal resource. As a new shareholder, Continental is expected to play a major role in our future success. Continental brings a considerable amount of valuable geological and drilling technical expertise to the table in addition to its financial commitment. Continental’s technical expertise and its long track record of oil and gas operating experience in nearby Indonesia is the perfect complement to TGE’s proven expertise and experience in electrical power generation in Sabah.”

Source: Press Release via Marketwatch

Attention: a similar article appeared about the same plant in 2009 … so if anyone could confirm if this is happening that would be great.

“Yousef Armodeli noted on Tuesday that installing the 5-megawatt (MW) power plant, which is a pilot plant and the first of its kind in the Middle East, will soon be carried out and its power generation capacity will hit 50 MW after more turbines are installed.

“Outside Iran, such [pilot] projects are implemented as a joint project by a number of countries, but in Iran, due to [the country’s] high potentials in renewable energies and skilled experts this is done indigenously,” he added.

The official stated that the power plant which is located near the city of Meshkin-Shahr in northwest Iran will become fully operational during the next Iranian calendar year (to start March 21, 2013).

He said the REOI has so far given the go-ahead for the production of 12,000 MW of energy from renewable sources across Iran.

The official added that the Iranian private sector is supposed to produce 500 MW of renewable energy by the end of the Fifth Economic Development Plan (2015).

Last May, Armodeli announced that the REOI is planning to increase the private sector’s investment in the field to build 5,000 MW of renewable energy power plants.

The Islamic Republic has taken great strides in generating energy from renewable sources, especially wind power.”

Source: PressTV Iran

Sinopec Group is China’s largest petroleum and petrochemical company and the fifth largest company in the world according to the Fortune Global 500 for 2011. Its main operations are related to the production and distribution of oil, gas, coal and other sources of energy, along with a variety of related operations and various chemical industries. In recent years, the company has directed its attention to harnessing geothermal power and sustainable energy production through its subsidiary Sinopec Star Petroleum Company Limited, which has a 51% holding in SGE together with the 49% holding of Orka Energy. Orka Energy became involved in the project last year when it acquired the operations of Geysir Green Energy and REI.

SGE has about 260 employees, and the company currently heats in excess of 6 million m² of commercial and residential buildings with geothermal power. The newly made agreement allows for the company’s owners to invest up to an additional USD 60 million going forward. The plan will expand heating operations to a target of 30 million m² by the end of 2015 and 100 million m² by the end of 2020. In addition to this, a project will be launched related to electricity production and to other environmentally friendly uses of geothermal power.

Fu Chengyu, Chairman of the Board of Sinopec Group said, “I’m extremely pleased with the ambitious objectives set by SGE for the coming years. Cooperation with Orka Energy has worked well, and it is both enjoyable and inspires confidence to have Icelandic ingenuity and knowledge by our side for the tasks ahead of us.”

Haukur Hardarson, Chairman of the Board of Orka Energy remarked, “This agreement underlines the good cooperation that has existed between the parties in the past years and the reciprocal trust that has developed between us. We will make every effort to employ, in a variety of ways, the significant knowledge that exists in Iceland on harnessing geothermal energy, both through consultancy and through participation by Icelandic parties in the development and operation of geothermal projects throughout the world.”

Source: Release of Orka Energy

“The plant is owned by Maibarara Geothermal, Inc. (MGI) which is 65 percent-owned by PetroGreen Energy Corporation, with Trans-Asia Oil & Energy Development Corporation (25 percent), and government-owned PNOC-RC (10 percent).

The 20 MW Maibarara geothermal power project is an integrated steamfield and power plant facility that is expected to be operational by late 2013. It is the country’s newest geothermal power plant after the 49 MW Northern Negros plant commissioned in 2007.

EEI Corporation is building the 1×20 MW power plant as EPC contractor with Fuji Electric of Japan supplying the major plant equipment and serving as the power plant O&M contractor. Design and construction of the steamfield pipelines are directly handled by MGI.

The company secured a P2.40 billion ($56 million) loan facility in September, 2011 from Rizal Commercial Banking Corporation (RCBC) and Bank of the Philippine Islands (BPI) to fund the construction of the Maibarara project’s steamfield pipelines, the power station, and the transmission facilities.

DOE Undersecretary Jay Layug said that the ground breaking for the 20 MW Maibarara geothermal project demonstrates firmly the Aquino administration’s focus and resolve in working with the private sector, local governments, and other national agencies to ensure the stability of the country’s power supply and infrastructure.

He added that aside from meeting Luzon Grid energy requirements, the Maibarara project will help in generating jobs, increasing tax revenues, and government royalties to host communities and local government units.

Maibarara Geothermal, Inc. is leasing two lots in Sto. Tomas, Batangas from the government to be used in the steam field operations of the Maibarara Geothermal Power Project.

MGI’s parent company PetroEnergy Resources Corporation said MGI has signed a land lease agreement with the National Power Corporation and the Power Sector Assets and Liabilities Management Corporation for the two lots.

PetroEnergy said the lots are titled in Napocor’s name and the lease agreement was signed pursuant to the service contract awarded by Energy Department to Maibarara Geothermal, giving the company exclusive access and rights to conduct geothermal operations in the area.

The land lease agreement covers a period of 25 years, extendible for another 25 years upon mutual agreement of the parties.”

Source: Manila Bulletin

The recommendations given out now need to be approved by the government.

The following feed-in-tariff (per kWh) rates were recommended by the government panel:

• Solar: $0.52 (Yen 42) for 20 years
• Wind: 20 MW or more $0.284 (Yen 23.10), less than 20 MW $0.709 (Yen 57.75), both for  20 years
• Geothermal: 15 MW and more $0.335 (Yen 27.3), less than 15 MW $0.51 (Yen 42), both for 15 years

Japan currently derives about 9 percent of its electricities from renewable energy sources and the feed-in-tariff will require power utilities to pay electricity rates that are above current market rates for electricity from renewables.

What would be interesting to learn why the time limit was set to 15 years for geothermal, while it will be guaranteed at 20 years for solar and wind. But this might have to do with a lack of space for wind installation.

The feed-in-tariff system will be introduced in July 2012 and is expected to spur investment into the renewable energy sector.

Source: Bloomberg

Sinopec said the two will seek to grow their joint venture, Shaanxi Green Energy Geothermal Development Co Ltd, aiming to expand geothermal energy heating to at least 100 million square meters of house floor by 2020 in China.

The two are also bidding to build their joint venture into a world-class technology provider that integrates research, development and applications, according to Sinopec.

Geothermal energy is a clean energy that can be used for heating homes and generating electricity. China is rich in geothermal energy resources, the development and use of which will be crucial for the nation’s energy savings and its building an environmentally friendly society.”

Source: China Daily

Last month Indonesia’s Energy and Mineral Resources Ministry announced that foreign investors in coal, copper, gold and other resources would be required to reduce their stakes to 49% 10 years after the original date of production.

However, Panax has received legal advice confirming that geothermal and renewable energy projects are excluded from the new requirement.

Managing director Kerry Parker said the government in Indonesia was actively supporting and encouraging foreign investment in geothermal projects.

“While mining companies will take a hit from the new regulations, the Indonesian government is fast-tracking foreign investment in geothermal energy,” Parker said.

“Both the government guarantee to protect and support projects during exploration and construction and the promised feed-in tariff are making geothermal a very attractive option for foreign investors.”

Unlike many other ASX listed geothermal companies which have only Australian geothermal assets, Panax has a number of foreign geothermal projects, focused on areas where demand for power requires alternative energy sources.

The company’s interests include four projects in Indonesia, two with a minority stake and two with a majority stake.

Three of the projects are close to development, while the company’s majority owned Jambi Project is at advanced exploration stage.

Parker said Panax expects to bring three zero emission geothermal projects into production in Indonesia in coming years, and is planning further investment in the region.

Indonesia is an attractive place for geothermal investment, hosting some of the richest geothermal reservoirs in the world.

The tightening of ownership rules regarding other resources, including coal, could also make geothermal more attractive for Australian companies.

As part of the Indonesian Government’s carbon strategy, it offers a guaranteed feed in tariff of US$97 per megawatt hour, along with carbon credits to geothermal energy generators. In addition, the government offers full protection to geothermal projects during exploration and construction.

The Indonesian Government has plans to increase geothermal production by 240% over the next four years to more than 4,000 megawatts.”

Source: Proactive Investors

“Basic added that it has also sent to DOE letters of intent to develop run-of-river mini hydro areas in Negros Occidental. The company is focused on business opportunities for the development of alternative fuels and renewable energy, such as hydropower generation, bio-diesel production, biomass to power projects and other areas with good business potential, as it continues to pursue its core business in the oil and gas exploration and development.

In September last year, Basic signed a farm-in agreement with Geoenergy, which allowed the latter to acquire up to 70-percent participating interest in the Mabini geothermal project. This deal entails funding 100 percent of the exploration costs up to the completion of drilling one geothermal exploration well.

Geoenergy said it plans to acquire, explore and develop geothermal energy resources in the Philippines for power generation.

In 2010, Basic announced that it has completed the initial assessment of the geothermal resource in its geothermal service contract in Mabini, Batangas.

“Our initial assessments indicate that the area has a good potential for a 20-megawatt power generation that could be developed in a 2- to 3-year period, considering the existence of adequate infrastructure, adjacency to transmission lines and a strong power demand in the area,” Basic said.

Basic Energy is the former Basic Petroleum Corp., which has a long experience and know-how in energy exploration and development, and has participated in almost all the oil discoveries in the country that have been put under production since 1978.”

Source: Business Mirror

Indonesia’s President Susilo Bambang Yudhoyono said Indonesia is looking forward to the cooperation in the field of education in New Zealand, which is known as a country with superior technological capabilities in the field of geothermal energy.

“New Zealand has an advantage in geothermal. We invite the cooperation, either in the form of joint investment or technical cooperation and other forms of cooperation that brings real benefits to the two countries, “the president said in a joint conference with New Zealand Prime Minister John Key in the Presidential Palace, Tuesday 17 April 2012.

President Yudhoyono said in the next 5-10 years Indonesia will be actively developing geothermal energy. Given the large potential of geothermal in the country.

The government also welcomes the cooperation in the fields of education, which allowed students to learn Indonesia geothermal energy technology in universities in New Zealand.

Source: Bsisnis Indonesia (in Indonesian)

“We’re in the next 5-10 years will develop geothermal energy,” said Yudhoyono.

In the 1970s there was an aid programme of New Zealand and Geothermal NZ Ltd, was a collaboration of several firms to pioneer geothermal power in Indonesia. The company (GenzI) installed a geothermal plant that was inaugurated in 1983 and is still running today.

So as part of a current trade delegation with the NZ prime minister touring Indonesia, Mike Allen ran Geothermal NZ Ltd. at the time. Mike is today the chair of Geothermal NZ, an umbrella group for several companies involved in geothermal development and related services in New Zealand.

The group was formed following the recent development drive in New Zealand with projects like the Kawerau and Nga AwaPurua projects. Japanese Sumitomo was so impressed with the work done by New Zealand firms with those projects, that it proposed further collaborations offshore. So Geothermal NZ was formed not to only work with Sumitomo, but looking at offshore opportunities. East Africa and Chile are markets have been looked at, but Indonesia based on the historic ties is naturally an obvious market for the group.

Geothermal New Zealand, so the article “combines the expertise of a number of New Zealand companies that are relatively small and don´t necessarily have the capacity to go and do independent marketing in Indonesia”, so the combined efforts make this easier for  trade missions like the current one to Indonesia.

The group appears and promotes the combined expertise in discussions with potential partners in Indonesia, and likely in other markets as well.

Something I  personally believe would also be a good model for the Icelandic efforts on the Icelandic Geothermal Cluster … maybe an even international collaboration combining expertise would make sense? Just dropping the thought.

Source: New Zealand Herald

As the world’s largest integrated geothermal developer, and with four geothermal facilities in the Philippines boasting a total installed capacity of 1149MW, EDC is in the perfect position to discuss the challenges of operating in the region. “The most challenging aspect of project  development lies in the uncertainty of resource.” explained Mr Villegas. “The most conclusive manner to determine an area’s potential resource capacity is by drilling wells…In the early stages of project development, the developer is usually forced to absorb all the costs and risks involved in drilling due to the lack of other financing options besides equity.” He also comments that the regulatory framework in the Philippines continues to cause issues when developing a geothermal project, but the EDC hopes to ease this situation as it “continues to partner with the regulatory body to influence and establish stable regulatory framework which can help in the timely completion of the geothermal projects.”

The full interview is available at www.greenpowerconferences.com/geopowerasia

To hear more from Mr Villegas, join him and over 25 expert industry speakers at GeoPower Indonesia & Philippines. This event is not to be missed – as Mr Villegas remarks: “Indonesia is in the process of harnessing their geothermal resource potential.” The event will provide the perfect opportunity for industry players to share expertise and build the partnerships necessary to develop the burgeoning geothermal power industry in the region.

Event website

So it may not be surprising that onsen owners have a strong voice when it comes to concerns about geothermal development. A recent article in The Economist touches upon this subject. The reason for concern is simple, onsen owners fear that geothermal development for power generation could dry out the hot aquifers that fuel the hot springs.

But with the tremendous energy demand of the country, following last year’s tsunami and nuclear disaster at Fukushima and the move away from nuclear power, geothermal as a sensible energy choice is now harder to argue.

Japanese turbine producers Toshiba, Mitsubishi Heavy Industries and Fuji Electric very much control more than half of the global market for geothermal turbines, but at the same time Japan only has a geothermal power generation capacity of about 540 MW. With the belief of a geothermal power generation potential of about 20,000 MW, geothermal is a valid option to fill the nuclear power gap.

While it is hard to convince onsen owners of sensible development not threatening their operations, the concern remains. So it might not be surprising that Japanese advocates for geothermal look at other countries that have shown that geothermal development and a geothermal bathing culture can coexist.

So in a recent statement by the Icelandic Ambassador to Japan, he points out the example of the “Blue Lagoon” in Iceland, as likely being the biggest onsen in the world. The geothermal field there not only fuels the spa but also a geothermal power and heat plant. .. maybe as a side note one can say that the plant existed first, while the initial “pond” or pool was an environmental accident. Today the Blue Lagoon is Iceland’s largest tourist attraction attracting nearly double the Icelandic population in visitors.

Source: Economist

As geothermal projects need longer to be developed they are less vulnerable to an expiration of production tax credits in the U.S. For the wind sector, where the tax credits run out at the end of this year, this means an immediate drop in the order of turbines and a loss in jobs. For geothermal, where tax credits are not expiring until the end of 2013, this won´t have that immediate effect.

On international investment into the geothermal market, Bloomberg New Energy Finance sees the Asian market attracting a majority of funds. Over 50 percent of investment into the geothermal sector will go to Asia due to “the number of late-stage projects, high-grade resources and increasing policy support.” It is also expected that Japan will see an increase in geothermal power capacity to up to 2,000 MW in the next 10-20 years.

Source: Bloomberg

With Japan looking at fundamental changes to its energy market following last year’s Tsunami and nuclear catastrophe at Fukushima. The country aims to move away from nuclear power and rely more on renewable energy sources.

The fund now planned by Sparx will have a total of around $10 to $100 million to invest, so Wall Street Journal, with an initial focus on wind and solar but with geothermal energy projects being potentially added to the scope of the fund.

Sparx Group is a hedge fund player with a focus on Asian equity with about $6.7 billion under management. The company is based out of Tokyo Japan.

Source: Wall Street Journal

Cui Yu, geothermal projects manager at Beijing’s Geology Minerals Development Bureau, said the government sent her to the volcanic island of Iceland for six months to learn how to develop an industry tapping underground heat. The country in the north Atlantic warms 90 percent of homes from geothermal supply.

China, aiming to get 15 percent of its energy from non- fossil fuels by 2020, is seeking Iceland’s expertise as it pursues a five-year, $10 billion district heating program. China Petrochemical Corp. has pledged to make geothermal one of its main business units over the period, and Xianyang-based Shaanxi Green Energy Geothermal Development Co. plans to become the world’s largest supplier of Earth-generated heat.

“The demand for energy in Beijing and in China is growing fast,” Cui said in an interview. “One of the ways to satisfy the increasing demand is to utilize more geothermal energy, which is both economical and clean.”

Geothermal energy is so plentiful in Iceland that it melts ice on Reykjavik sidewalks in winter, helps grow bananas in greenhouses and warms more swimming pools per capita than in any other country. The United Nations University has run a Geothermal Training Program there for more than 30 years.

“Iceland has a huge advantage due to its experience and knowledge in regard to the utilization of hydropower and geothermal power,” Cui, 34, said by telephone from Reykjavik, the country’s capital. “China can learn from Iceland’s experience and Icelanders can teach us many things.”

The world’s second-biggest economy has 26 megawatts of installed geothermal capacity, compared with 575 megawatts in Iceland, according to Stefan Linder, an analyst at Bloomberg New Energy Finance. China, which gets 80 percent of its power from coal and is the biggest polluter, has sent the most students to the UN training program, followed by Kenya and the Philippines.”

Source: Bloomberg

So the following news from the country provide some hope. A project team of a “joint Indo-Norwegian venture proposed that Tatta Pani in Mandi, Manikaran and Vashisht in the Kullu valley and Puga and Chuma-Thang in Ladakh can be developed as geothermal tourist destinations if these natural sources of energy are tapped properly.

On a “save-hot water springs mission” in the western Himalayas, the team of scientists today inspected the Tatta Pani hot water springs in the district and proposed to the government its action plan.

The team says this natural source of geothermal energy is facing depletion if it is not saved and relocated at Tatta Pani town.

The hot water springs will be submerged in the 800 MW Kol Dam project, being executed by the National Thermal Power Corporation (NTPC) on the Sutlej.

Though the NTPC claims that it has relocated the hot water springs at a higher elevation at Tatta Pani town, the team found that it needs a proper geological study and a fresh initiative to relocate the geothermal energy.

Talking to The Tribune from Tatta Pani, the coordinator of the Indo-Norwegian joint venture, Dr Ritesh Arya, said, “The hot water springs here have not been suitably relocated and tapped. The source can be used for space heating and hot baths. Tata Pani can emerge as a geothermal tourist destination.”

Dr Arya, a geologist who has entered the Guinness Book of World Records by boring the highest tube well in the world in Ladakh, said they had inspected the Manikaran and Vashisht hot water springs in Kullu-Manali, Puga and Chuma-Thang in Ladakh.”

Source: The Tribune India

With changed drilling rules for geothermal the project is now being studied by a consortium of about 10 companies. The companies intend to meet local communities in early May. They expect a potential development with a total capacity of 270 MW.

The support of local communities is crucial and they need to be won over as in the past many projects faced local opposition from people fearing an impact on hot springs and local tourism.

National paper Nikkei reports that the consortium includes companies like Idemitsu Kosan Co and Inpex Corp. The project is expected to cost up to 100 billion yen ($1.2 billion), and could start operation as early as 2020.

Representatives are though emphasizing that current plans are very conceptual and there has been made no decision on a potential project start.

Other firms in the consortium include Mitsubishi Materials Co, Japan Petroleum Exploration Co (Japex) and Mitsui Oil Exploration Co, according to the Nikkei report.

Source: Reuters

In a disclosure to the Philippine Stock Exchange, EDC said it was still the service contractor for seven geothermal production fields in Tongonan, Leyte; Palinpinon, Negros Oriental; Bacon, Sorsogon and Manito in Albay; Ilomavis, Kidapawan City; Northern Negros, Negros Occidental; Camarines Norte, Camarines Sur, Quezon; and Surigao del Norte.

By certifying that the renewable energy service contracts for these fields were valid, the DOE has declared EDC to be in compliance with its obligations and that it has no pending violations over its work commitments to the government.

However, EDC has been required to submit a revised and updated feasibility study for geothermal service contract No. 7 covering the Mt. Cabalian project.

EDC has allocated P12.3 billion for it capital expenditures this year. Of this, 48 percent or P5.76 billion will be allotted for the project development costs of the Burgos wind project. Meanwhile, 11.6 percent of the total capex budget for this year or P1.43 billion ($33 million) will be used for the remaining rehabilitation costs of Green Core Geothermal Inc. and Bacman Geothermal Inc., both of which are wholly owned subsidiaries of EDC.

Bacman Geothermal is rehabilitating the 150-MW Bacon-Manito (BacMan) geothermal facilities while Green Core is repairing the 305-MW Palinpinon-Tongonan power plants so these can run on full capacities.

The capex budget also included expenditures amounting to P1.86 billion ($48 million) for the acquisition of  two drilling rigs to support exploration activities within prospective geothermal areas. These rigs will help the company move forward its greenfield and expansion projects that will increase EDC’s attributable generating capacity by 38 percent to 1,542 MW, from the current 1,116 MW, within a five-year period starting 2011.”

Source: Business Inquirer

The companies are Thermax Ltd. (TMX) and Geosyndicate Power Pvt.  Both attended a meeting with potential investors last week. The bids for the project are due March 20, 2012, but there might be an extension until the first week of April as both firms have sought for an extension to the deadline.

The project in Pugah valley in Kashmir, which belongs to India would be the first geothermal power plant in India. Geosyndicate estimates that India has a potential of up to 150,000 MW, which represents about 80 percent of India’s totall installed power generation capacity today.

Geosyndicate is also working on a 25 MW plant in Andhra Pradesh and a 60 MW project in Ladakh, as published on the company’s website.

Thermax has partnerd with Iceland geothermal company Reykjavik Geothermal to explore resources in the Ratnagiri region in western Maharashtra state.

Indina Tata Power is involved in geothermal internationally through investments in Australia and Indonesia with Australian Origin Energy.

Source: Bloomberg Businessweek

There are various efforts to help overcome several hurdles to development, among others the drive to allow drilling beneath national parks in Japan, where most of the larger geothermal resources of the country can be found and the Feed-in-tariff system to get started this April.

But with the upcoming summer electricity shortages will be felt in Tokyo and other regions of Japan. Many companies are actually buying generators to be prepared should there be blackouts and all kinds of power-saving aire conditioners, TVs, computer and appliances are in big demand.

But there remains one big challenge, there are two different electrical frequencies, “flowing from two incompatible power-grid systems: 60 Hx in the southwestern half (from about Nagoya down to Kyushu) and 50 Hz in the northeastern half (the other side of Mount Fuji from Shizuoka to Hokkaido, including Tokyo).”

So conventional wisdom says that a national, single-standard grid system, in tandem with more renewable energy generation, would help Japan to cover missing electricity generation capacity.

There is though the issue of the monopoly businesses of Japan’s 10 major utilities, there simply seems to be no will to cooperate.

Tom Giuffre, principle and managing director of Hot Earth Enterprise, a geothermal start-up in Japan, says that “small, independent power producers haven´t been able to come into the market until very recently.”

The new feed-in-tariff system will improve this and create an actual working market place, as it will oblige utility companies to buy all the power generated through renewable sources connected to a grid at a fixed, premium rates.

There are several companies now lining up to do projects. The geothermal system of Hot Earth Enterprise is one example.

In the past there has been opposition to geothermal development in Japan based on the fear they could deplete hot springs and ruin spa-related tourism.

“Hot Earth Enterprise is designing geothermal technology that works with the spa, or onsen, owners. Compact and portable, the company’s units, made in the U.S., are miniatures of the massive borehole projects that require years of development and millions of investment dollars to build. They are designed to be used at existing hot-spring resorts to reuse the facilities’ “throwaway” heat to generate power for the local communities. “We calculated that we could roll out in the [disaster-struck] Tohoku region 50 MW of power probably in about three years,” says Giuffre. “We could do it in half the time and probably at one-third or one-fourth the cost [of the big projects].”

Source: Time

The test drilling will verify the minimum temperature requirement (450 degrees Fahrenheit) at the first of 2 locations. ADB is committed to provide financing for the subsequent steps which include the development of the engineering plan and construction of these 50MW facilities. To learn more about this development, visit the ADB Project Site.

This is an expansion to the recently held magnetotelluric survey in the country with the objective of locating possible deep sources of geothermal energy covering mainly the hot spring sites. The survey covered the landscape which included Rankiri Ulpotha, Kenniya, Nelumwewa, Kapurella, Mahaoya, Padiyathalawa and Mahapalessa.

This was a joint project between privately funded personnel in the UK and Canada, the University of Edinburgh, UK, the Geological Surveys and Mines Bureau, the Institute of Fundamental Studies and the Water Supply and Drainage Board.

The GSMB sources revealed that the preliminary results were encouraging and high conductivity regions have been found below the hot springs with evidence of a connection to a deeper high conducting region. The depth of the high conducting region will be determined in the extended analysis to be conducted under phase two of the programme.

The report after processing the available data will determine the viability of a geothermal resource.

Chairman of the Geological Survey and Mines Bureau Dr N A Wijayananda said that the preparation of a heat map concerning the country’s landscape was under proposal stage.

“The temperature variations in the deep interior of our earth causing the emergence of hot water springs is under survey. There could be other signs of the geothermal energy sources deep in the earth not in the form of hot springs. Hence, there is a proposal for making a heat map,” Dr Wijayananda said.

The Chairman of the GSMB said that initial arrangements were being made for conducting an air borne geological survey for identifying subsurface mineral deposits.

The survey is to be launched by the GSMB jointly with FUGRO, an international geophysical survey company using a low flying aircraft fitted with sophisticated equipment.”

Source: Sri Lanka Daily News

The first development is now expected to take place in the Fukushima Prefecture, home of the nuclear power plant that had its melt-down after last year’s Tsunami and Earthquake.

“Bandai-Asahi National Park in Fukushima Prefecture is believed to contain the largest amount of underground pools of hot water and steam, which can generate an estimated 270 megawatts of electricity.

The environment and industry ministries are considering lifting development restrictions aimed at protecting the environment in six special areas of national and quasi-national parks. The plan came up in the government’s search for alternative energy sources when most of the nation’s nuclear reactors were being shut down for safety reasons after the Fukushima plant disaster.

The candidates are two park areas in Hokkaido, three in Akita Prefecture and Bandai-Asahi National Park, near Fukushima city. They are projected to have a total geothermal energy capacity of 600 megawatts, or half the capacity of a typical nuclear reactor.

The government is focusing on the Fukushima park to take advantage of special measures laws for the recovery from the Great East Japan Earthquake.

Concerns have been raised about possible environmental destruction in building the geothermal power stations. The government will ask developers to take such steps as reaching agreements with local governments and hot-spring hotels before development, minimizing the environmental impact and offering support to local communities, including providing hot water to hotels. For the special areas, the ministries will urge developers to dig angled tunnels from outside the parks to reach the underground hot water and steam.

The ministries will also discuss allowing vertical tunnels inside the special areas in the Fukushima and other parks on a trial basis starting next April.

The industry ministry hopes the eased restrictions will encourage companies to enter the geothermal generation business. It has also allocated about 10 billion yen ($122 million) in the 2012 budget for development subsidies and other measures.”

Source: Asahi

The projects are Muara Laboh and Rajabasa and are located on Sumatra Island. They were part of the second fast-track program of the Indonesian government.

The PPA has been a prerequisite for commencing the project into exploratory drilling. If everything goes like planned, both projects are expected to start operation in 2016. IPR-GDF Suez Asia has a 35% interest in both projects.

The government has provided the developing company a government guarantee for the two projects, covering the obligations of the state utility PLN as buyer of the power under the PPA.

IPR-GDF Suez has a several operating assets and is working in another JV with Marubeni Corp. and PT Supreme Energy for another 220 MW geothermal power plant projects, Rantau Dedap in South Sumatra.

Source: Energy Business iQ

Alterra Power Corp is a leading renewable energy developer, whose portfolio includes two geothermal facilities in Iceland and another in Nevada, USA. Edward is Alterra’s representative in Asia, where he has been working since 1998, gaining a wealth of experience in the financing, construction and operation of power facilities in Indonesia and the Philippines.

PS: What is the most challenging aspect of developing a geothermal project in Indonesia?

EM: For Indonesia, it is regulatory stability. Geothermal is hard to begin with. There is no need to make it more complex by changing regulations when things start to look up. Further, the lack of coordination among government ministries and other players creates needless complication. For years we have had the situation where the Energy Ministry supported geothermal development and the Forestry Ministry refused to permit the projects to go ahead because of issues as to the forests as mapped. Similarly, the Energy Ministry gave rosy predictions of how matters would be handled regarding payment of tariffs but Ministry of Finance took adverse positions and PLN was not consulted and rejected the structures put in place. Coordination of the ministries is crucial, extremely weak and not really an area where the private sector has the ability to foster development.

PS: So what policy changes do you think would accelerate the growth of the industry in South East Asia?

EM: For the Philippines, it is more in the nature of seeing how the first generation of post-PSALM power stations get built and dispatched in the new competitive market there. What we have seen over the past decade is really just moving assets from NPC to others but nothing new. Financing has largely been through the ADB/IFC and local banks. Some of the older units are beginning to die off and real efforts are being made to develop new power stations but it has been in this second generation of development that has been the downfall of many of the competitive markets. In this regard the key policy drivers will be maintaining compliance with the rules by all market participants and trying to rationalize the irrational state of the merit order in the Philippines where gas is base-load and coal is on the margin.

For Indonesia, the answer is putting in place a stable, reliable and attractive government support package until PLN creditworthiness is accepted by international financing entities. Regardless of what PLN believes, the IPPs believe, or what the Indonesian Government thinks, international financing entities are not willing to accept PLN’s credit profile at this time. The Government has put together a guarantee of PLN’s solvency in the form of a regulation but the financial industry is still lukewarm toward accepting that to support the billions of dollars needed to get the development moving. We need to bridge that gap in order to get the flow of funding to come.

PS: Financing will certainly be critical for the future development of the sector. What do you see as the key factors for ensuring on-going investor confidence in geothermal?

EM: Indonesia and the Philippines are a bit of an odd part of the geothermal industry. In many nations where there is geothermal resource the main issues are technical. Will we find steam? How many wells will we need to run the plant? With the Indonesian and Philippine fields, there have been very few weak links. As mentioned, the problem has been the creditworthiness of the sole off-takers and how the governments have deal with issues arising around those off-takers. The Philippines took a bold step of going ahead with a competitive market but NPC and PSALM did not always follow their own rules leading to investor confidence questions. Those and other questions as to how the system would work left most commercial banks on the sidelines. While the Filipino Banks have liquidity, using that money for power stations means it is not available for funding rural electrification projects. Furthermore, other options for developers are likely to be needed as the Philippines moves from acquisitions of existing assets and into development of Greenfield projects.

Indonesia seemed to deny that some of the problems of the late 1990s impacted the development of the power sector. That denial all but forced them to bring power generation costs completely back on to the government balance sheet and caused several years of delays in bringing needed power in Java-Bali on stream and delaying even further bringing power to the other islands. The Government’s unwillingness to accept the central truth that it controls PLN’s tariffs, and thus its solvency, kept developers and financiers on the sidelines for the better part of a decade.

For geothermal, the change in the structure following the end of Pertamina’s oil, gas and geothermal monopoly, and bringing in a host of new regional government actors with little experience, rendered the entire issue of development moot for almost a decade. Finally, with some positive developments in the regulatory scheme and an appreciation that geothermal can play a major role in several areas of Indonesia as a hedge on rising fossil prices, we are seeing movement. The key is to keep that movement aimed and proceeding in the right direction rather than cutting it off once it gets moving. Investors are showing up. Financiers are getting comfortable and I see a bright future for geothermal here if we can keep the stakeholders focused on maintaining a reliable, legally certain and also attractive structure; legal certainty that an investor will lose money is not going to attract investors.

PS: With this in mind, what do you predict the region’s geothermal industry will look like in 5-10 years time?

EM: The future is bright, but it always has been. Geothermal suffers more than many other forms of power development because we need stability for several years before we have our fuel lined up. Coal plants sign a long term contract for fuel. We have to find it and need to know that if we take the risk and are successful that we will be rewarded. Changes in policy every 6 months will not foster development. I remain confident that we will have several new good-sized projects on-stream in Indonesia in the next 5-10 years if we keep a stable and level playing field.

Alterra Power is one of the companies that will be continuing these discussions at GeoPower Indonesia & Philippines. Between the two countries, over 10 GW of expansion is targeted in the next 15 years, and the conference will provide the platform for companies looking to capitalise on the wealth of opportunity in the region.

Edward McCartin joins a speaker line up that includes geothermal developers Star Energy, Pertamina Geothermal Energy, Energy Development Corporation, PLN Geothermal, Panax, International Power-GDF Suez, Aboitiz Power and many more.

Under the new rules, developers will “enjoy full protection of their investments as the government agrees to expand its guarantee to cover risks during exploration and construction phases.

Under the current rule, the government would only cover payments for purchases of electricity by PT Perusahaan Listrik Negara (PLN) should the state-run power company be unable to fulfil its financial commitments to private electricity producers (IPP).

Geothermal developers say such a guarantee is not enough, demanding protection to investments made during the exploration and construction of geothermal power plants.

Bagiyo Riyawan, PLN director for strategic procurement, reported on Wednesday that a meeting between decision makers representing the Finance Ministry and the Energy and Mineral Resources Ministry had agreed to expand the government guarantee.

“The remaining disagreement between the government and contractors is only in the guarantee period,” he told a press conference after the opening of the first Green Energy Forum at the Cirata hydro power plant in Purwakarta, West Java.

“There are still two opinions on that matter [the guarantee period] — whether the guarantee will last until the contract with IPPs has ended, or only until they pay back their debts to lenders,” he added.

The government would not need to issue a new regulation for the guarantee expansion, Bagiyo said. A supporting letter given to contractors would be enough for developers to seek financial back-up for the projects, he added.

PLN renewable energy division head Muhammad Sofyan revealed the new guarantee scheme would be more specific than what is stipulated in the ministerial regulation.

Under the new scheme, guarantees for explorations will be regulated. If there is a government force majeur (a project stopped by the government), there will be an audit by an independent body to calculate the amount of funds that have been used by a developer during the exploration period.

“The government will pay back that amount of money. Once the new scheme is legalized, we can proceed to sign stalled power purchase agreements [PPAs] with geothermal developers,” Sofyan said.

Due to the guarantee problems, PLN estimated earlier that by 2014, the country could only have an additional power supply of 1,200 megawatts (MW) from geothermal power plants, roughly half of the 10,000 MW fast-track program’s second phase target of 2,170 MW.

Despite having 40 percent of the world’s geothermal reserves, Indonesia can only produce 1,341 MW or 4.6 percent of its potential.

PLN announced in January that three geothermal power plants would go online this year with a combined capacity of 135 MW. The plants are Lahendong Unit 4 in North Sulawesi, Ulubelu Unit 3 and 4 in Lampung and Ulumbu in East Nusa Tenggara.

The last time PLN signed PPAs with geothermal developers was March last year for five power plants. The plants are Mulut Balai (4×55 MW) in South Sumatra, Ulubelu Unit 3 and 4 (2×55 MW) in Lampung, Lahendong Unit 5 and 6 (2×20 MW) in North Sulawesi, Karaha (1×30 MW) in West Java and Kamojang Unit 5 in West Java (1×30 MW).”

Source: The Jakarta Post

Today I am asking you for your help in a short Reader Survey. It would be great if you could assist in filling out the survey.  Click here to take survey

I sincerely hope that you find the site and its features useful. From the beginning I have been using a variety of social media tools to help promote geothermal energy. Twitter has become an increasingly important tool. Facebook is something a bit underutilized. Google+ is coming. The ThinkGeoEnergy LinkedIn group with now also around 600 members is providing a great platform for discussions. The Ning community has not been that overly successful, but is still being used.

The free-to-use pictures I share via ThinkGeoEnergy’s Flickr account are also popular. If you want to share good geothermal pictures you can do this via the Flickr Group of ThinkGeoEnergy.

Then there are the other elements. In 2010, a weekly newsletter was added that today has over 600 subscribers and now even has a fine co-sponsor in Scientific Drilling. The Geothermal Job Portal was added last year and slowly gains some traction.

Also at the end of 2011, ThinkGeoEnergy was able to offer one of the first Geothermal apps for the iPhone – the GeoEnergy app, available in the App Store.

I am also very excited about the ThinkGeoEnergy Geothermal Power Plant Map, which is in full work. It is under development, so don´t expect it to be anywhere close to ready and correct, but for a preview see here: http://map.thinkgeoenergy.com/map.php, for the old map (on Google Maps) you can use this link.

I am now going through a bit of a strategic review of the site, for which the survey is supposed to be a little guidance of what you want to see for ThinkGeoEnergy going forward, so your help is appreciated.

There are some exciting news coming along for the industry, so the start into this year looks a lot better than indications of the end of last year. So lets hope we will see an exciting year.

I am also exploring the idea of a Marketing Workshop/ event in connection with the GRC Annual Meeting and the GEA Trade Show in Reno this fall, so stay tuned.

In this context I also would very much like to thank all the companies that have supported me through the years with advertisements and other contributions. Namely this is Islandsbanki, ISOR, GeothermEx, Hannon Armstrong, Verkís, Mannvit, Technip, Scientific Drilling, Iceland Drilling, Enerchange and Activated Logic.

There are a large number of other individuals and companies that have helped tremendously through advise, thoughts, critical remarks and comments and general support.

Tamba P. Hutapea, Deputy, Indonesia Investment Coordinating Board, revealed the holding company may starts exploration phase in South Sumatra, Jambi, East Java and Bengkulu.

“The company will invest US$3 billion in four locations,” he told in Jakarta, today. According to Hitay Investment’s website, the company is Turkey’s leading conglomerate focusing on corporate venture capital since 1988. The group is founded by Emin Hitay, a prominent entrepreneur and investor known with his startups in Turkey

Tamba explained, Hitay Investment has been studying the investment possibility since last year and it’s now in survey stage before exploration

As soon as it received a green light form Ministry of Energy and Mineral Resources, the company will conduct mapping of the potential locations more detail. Later on, Hitay Investment will continue into bidding process.

“After bidding, they will carry out detail research. All of the process needs about 3 years.”

In addition, he said, the maximum exploration capacity 200 megawatt in every location, so the total capacity for geothermal development will reach 800 MW.

“The maximum capacity is about 200 MW, perhaps same with the exiting geothermal in West Java,” he added”

Source: Bisnis.com

The power plant harnesses low temperature (below 100 degrees) geothermal energy. It has been installed at the Matsunoyama Onsen hot spring at Tokamachi, Niigata in Japan.

“The Japanese government’s strategy to utilise abundant thermal energy from its hot springs to generate renewable power is very exciting,” chairman John Byrne said.
“Wasabi Energy has been working on the development of these Kalina Cycle® EcoGen units for a number of years in collaboration with our colleagues at GERD.
“The miniaturisation of Kalina Cycle® technology for the EcoGen units was made possible as a result of our engineering team making a number of important innovations, particularly in relation to the incorporation of next-generation micro-turbine technology.”

The installation is part of a Japanese state sponsored research and development project. Following the installation the plant was officially opened by Japan’s Senior Vice Minister of the Environment, Mr. Katsuhiko Yokomitsu.

The geothermal power produced by the Kalina Cycle® EcoGen unit will be utilised by the local area, Wasabi said.

Wasabi says the first EcoGen unit will undergo extended testing and commissioning. Subsequently a second unit will be installed and optimised.

“Recent events in Japan have demonstrated the increased importance of decentralised power generation.

“Japan has shown leadership in its efforts to diversify its power generation mix away from conventional sources such as coal and nuclear generation towards more sustainable sources.

“In addition to the existing geothermal capacity in Japan, along with GERD we see significant potential to support many businesses, municipalities and local communities to incorporate EcoGen units into local hot springs to provide a reliable and renewable source of electricity.”

“This plant is the fourth in Japan, following a demonstration plant by MITI in Fukuoka in 1998, there are two other Kalina Cycle® plants presently operating in Japan.

He adds: “The Kalina Cycle® technology is continuing to build momentum as an important technology for efficiently generating clean power.

“We continue to work with leading organisations across key global markets to ensure our cornerstone technology is understood, demonstrated and ultimately adopted on a large scale, globally. Wasabi Energy is leading the way in providing technology for a clean energy future.”

Source: Company releas via Proactive Investors

“The Philippines and Indonesia represent the second and third largest installed bases of geothermal power in the world, yet the region has barely scratched the surface of potential geothermal resources.

Indonesia has ambitiously targeted nearly 4GW of new geothermal capacity by 2014, with private sector developers expected to fill around half of this gap. Meanwhile, The Philippines has targeted over 1.4GW of increased capacity as part of its long term renewables plan looking to 2030, with 1,020 MW of new installations expected to come online between 2015-2020.

With numerous projects in the development phase and new tenders yet to be won, there are significant opportunities for geothermal stakeholders to capitalise on these markets. GeoPower Indonesia & Philippines will bring together policy figures with local and international geothermal companies from across the geothermal value chain for two days of networking and solutions, as the industry addresses how to reduce lead times for developing projects, how to leverage the investment to stimulate the growth of the industry, and how to effectively develop, construct and operate a successful plant.

Green Power invite you to join us in Jakarta for the latest edition of the hugely successful Global GeoPower Series. Now in its 4th year, the series has attracted over 1000 international geothermal players from 46 countries, with 33% of attendees of board or director level.”

Source: GeoPower announcement

The Philippines is currently the second-largest geothermal power producer in the world, next to the United States. Geothermal power accounted for 14.7 percent of the power generation mix in 2010.

The department approved the contract of Pan Pacific Power Philippines Corp. for geothermal projects in Benguet, Cagayan and Abra.

The department approved the company’s Cervantes geothermal power project in Benguet, Cagua-Baua in Cagayan and Sal-lapadan-Boliney-Bucloc-Tubo in Abra.

Pan Pacific, according to the department, is a local company with a foreign partner.

The department, meanwhile, approved the geothermal projects of SKI Construction Group Inc. in San Juan, Batangas, Tiaong in Laguna, Quezon and Batangas and Tayabas-Lucban in Quezon.”

Source: Philippine Trade and Investment Center in London/ UK

Japan is thought to have the world’s 3rd-largest geothermal resources thanks to its many regions of volcanic activity. But development of the resources is lagging, as 80 percent is in national parks where such development is restricted.

The plan compiled on Tuesday says a 1974 government directive restricting development in national parks should be abolished.

The plan includes a proposal that construction of wells to draw underground steam should be allowed if slanting pipes are inserted outside the parks, if such work does not affect scenery.

Based on the recommendations, the ministry plans to decide next month on a new policy on geothermal power development.”

See also a video report on the news on the website of NHK (see link below).

Source: NHK

The company along with its consortium partners Australia’s Origin Energy and PT Supraco Indonesia is developing the Sorik Marapi geothermal project in Northern Sumatra, Indonesia.

“For the geothermal (project), the total cost is estimated to be about $ 850 million, out of which 30 per cent is equity,” Tata Power Managing Director Anil Sardana told PTI.

“So, it will about $ 240 million and out of that 50 per cent will be from our side, the remaining 50 per cent from Origeon … So, it will be about $ 125 million (from Tata Power),” he said.

The project’s expected Commercial Operation Date (COD) is June 2015. It would be developed by PT Sorik Marapi Geothermal Power, a Special Purpose Vehicle of the consortium. In this, Tata Power and Origin Energy has 47.50 per cent stake each and the rest is with PT Supraco Indonesia.

The Indonesian geothermal initiative is part of Tata Power’s renewable energy portfolio that includes various hydro, solar and wind projects.

Tata Power intends to have 20-25 per cent contribution in energy generated at all times from clean power sources that includes wind, solar, hydro and geothermal.”

Source: The Economic Times

“SEG has operated at an average capacity factor of above 97% since commencement of operations in 2000, which compares quite favorably with the global geothermal power industry average. Its energy sales are based on a long term contract with the state power utility, PT Perusahaan Listrik Negara, which provides for tariff adjustments for movements in exchange rates and inflation.

SEG is exposed to geological risks inherent to operating in an active seismic area, and its single site operation further augments this risk. Fitch however notes that this risk is mitigated to some extent as SEG’s insurance policies cover most plant costs, as well as 24 months of business interruption.

SEG has scaled down its capex for Unit 3. As per the revised plan, Unit 3 will now consist of 60MW of generation capacity (127MW originally) and is estimated to cost around USD190m (USD90m lower than the original capex budget). Fitch however notes that an EPC contract for the construction of Unit 3 is still not in place, and the company is still in the process of verifying sufficient thermal resources to support Unit 3′s additional capacity. The company expects to award the EPC contract, following verification of sufficient thermal resources, by end-2012. ”

For the full article see link below

Source: Reuters

“For BacMan, the base case assumption is that the plant would run in September this year. We were hoping to get it running by July last year but we started running one unit last December and there are really some issues you will find in the unit after it hasn’t run in five to seven years,” EDC President and Chief Operating Officer Richard B. Tantoco told reporters in an interview.

He added the company is optimistic it will be able to put the geothermal plant back on line soon.

EDC won the bid for the operations of the power plant for $28.5 million in 2010. The company provides steam to the BacMan plant.

Rehabilitation work began in May 2010 right after EDC won the contract. It was originally planned to finish in as early as 18 months.

BacMan is located in Bacon, Sorsogon and Manito, Albay. The 110-MW (megawatt) BacMan I geothermal plants was commissioned in 1993 while the 40-MW BacMan II plants were commissioned in 1998.

It had a capacity of 150 MW. However, due to the damage to one of the units last year, only 130 MW can be restored.

Since last year, BacMan has been shut down.

EDC is also shutting down one of its other geothermal complexes consisting of the 305-MW Tongonan I geothermal power plant and the 192-MW Palinpinon geothermal plant in Leyte.

The company will rehabilitate two units of Palinpinon and two units of Tongonan.

“Four units of Palinpinon-Tongonan will go down. That’s scheduled until the end of March and June. We’re doing fairly significant work on those so we can finish within the year,” Mr. Tantoco said.

“The issue with Palinpinon, however, is the equipment is very old so we’re tearing down the entire cooling system and putting in brand new ones” he said.

EDC’s subsidiary Green Core Geothermal, Inc. won the bid to operate the power plant in 2009 for $220 million.”

Source: Business World Online

Chevron has partnered with the Philippines since 1971—first as Philippine Geothermal Inc., then Unocal Philippines Inc. in 2004, and now as CGPHI since 2006. In that time, Chevron has become the world’s largest producer of geothermal energy.

“Our 40 years of partnership with stakeholders is a testament to the significant role we have played in delivering energy where we work,” said Jeff Shellebarger, managing director of Chevron’s IndoAsia business unit. “Working together, we help generate not only essential power to our communities but also to the industrial and commercial customers that drive the nation’s economic growth.”

To commemorate the event, employees at Mak-Ban Field helped construct 13 new homes for families displaced by Typhoon Ondoy. Tiwi employees celebrated with a community fun run and after-party. In addition, an anniversary book was created to captures CGPHI’s rich history—a testament to “our employees’ legacy of hard work, discipline, integrity and passion for excellence,” said Tony Yee, CGPHI president and general manager.

To learn more about Chevron’s operations in the Philippines, please visit: http://www.chevron.com/countries/philippines/

Congratulations Chevron. Now we only need to get you involved in other countries, maybe even in your home country the United States?

Source: Chevron @Facebook

The total geothermal power capacity in the world is 10,710 MW as of 2010. Because geothermal development is gaining momentum in the world owing to increasing energy demand, necessity to reduce carbon dioxide emissions and soaring fossil fuel prices, geothermal power capacity is expected to grow at a rate of 1,000 MW per year until 2015.

MHI has supplied a total of 100 geothermal power generation systems, notably large-scale flash cycle systems having an electric output of about 50 MW. It will increase proposal and delivery of full turnkey design and construction projects by use of its worldwide network. The company will also actively promote supply of individual components.”

Source: Eco-Business

The findings are interesting not only for the geothermal industry that sees its high capacity factors as one of the key selling arguments. While the research shows that geothermal energy is still a very favorable base-load capacity energy source for utilities world-wide, capacity factors are often not as high as they theoretically could be.

Building on the vast resources collected over the year, the research done by Bloomberg New Energy Finance for this study is quite thorough and looked at 71 geothermal fields globally.

For a global average, BNEF quotes a capacity factor of 73% and correctly notes that developers use much higher capacity factors for their project finance models. Higher resource temperatures statistically increase capacity factors at a rate of around 1% per 10 degrees Celsius. The performance of the different fields varies widely, with Iceland, Mexico and Indonesia representing the highest capacity factors. The age of the plants in Japan and the Philippines is mentioned as a reason for the lower capacity factors in both countries, through decreasing productivity of geothermal fields over time.

In detail the report goes into general trends of plant performance, performance by technology, country and developers.

In an interview with Mark Taylor the Head of Geothermal at Bloomberg New Energy Finance, he said, that “the findings might not be ideal for the industry, but geothermal energy is still base-load given its 90% availability. Also utilities in the U.S. still favor Geothermal and consider it a viable base-load option. This means that developers can still secure healthy power purchase agreements (PPA) and capital should be available for good projects.”

For financial institutions, capacity factors are important and information like that provided by Bloomberg New Energy Finance is crucial for the questions investors need to ask and developers need to be prepared to answer. “Lower than expected capacity factors could though mean difficulties with regards to not meeting PPA contract requirements, as well as meeting debt and interest payments through a decrease in revenues,” Mark Taylor added.

Geothermal development always has a risk element when it comes to resource assessment, drilling and planning, but the report by Bloomberg shows that it is crucial to be conservative in estimates as they determine the underlying contractual terms of the PPA, but also the availability of financing.

Again – and I mentioned this in various presentations these past 12 months – it is the question about the necessity about being conservative and successful, rather than overpromise and not live up to estimates given. The geothermal reporting codes by Australia and Canada are providing a codified approach to reporting of resource assessments that could help create investor confidence in projects, but also be one helpful element in securing PPAs that live up to expectations on both sides.

“The permit is still being processed,” Banyumas Energy and Mineral Resources Office chief, Anton Adi Wahyono, said yesterday.

Additionally, the project investor, PT Sejahtera Alam Energy (SAE), must replace the protected forest area that will be exploited. The project is estimated to require 50 hectares of land on the slopes of Mt. Slamet. Therefore, the company must restore 100 hectares of land.

PT SAE’s general manager Petto Rashito, said that he accepted the policy. “But it shouldn’t be delayed. The longer the permit takes to be issued the higher the investment,” he said, assuring that the project was safe despite the planned excavation on the active slopes
of Mt. Slamet. “There’s no difference in excavating an active mountain or a non-active one,” he said.

He also said that Indonesia had the biggest geothermal electricity potential in the world, totaling 30 gigawatts or 40 percent of total global potential. “However, only 1,189 MW has been utilized,” he said.”

Source: TempoInteractive

The State Enterprises Ministry said that Pertamina’s units Pertamina Geothermal Energy and Pertamina Drilling Services Indonesia may carry out IPOs this year. But Pertamina, the state-owned oil and gas company, said that it was still weighing the feasibility.

“We’re still in the preparation stage,” Pertamina spokesman Mochamad Harun said on Wednesday. He did not confirm if the companies were ready for an IPO.

Pertamina controls 90 percent of PGE, which operates geothermal facilities. It also has a 99 percent stake in PDSI, which has 34 drilling rigs.

State Enterprises Minister Dahlan Iskan said on Tuesday that PGE and PDSI were among state companies that would conduct offerings this year. Other state companies that have been put on the list include Semen Baturaja, state pawnshop Pegadaian, and a unit of national flagship carrier, Garuda Maintenance Facility AeroAsia.

“In principle, if they are ready, then go ahead,” Dahlan said.

Dahlan said that proceeds from sales in IPOs and bonds could improve a company’s performance and good corporate governance. As a publicly traded company, an IPO would put the company’s performance under public scrutiny.

President Susilo Bambang Yudhoyono said during the first day of trading this year on the Indonesia Stock Exchange that he expected to see more state companies carrying out IPOs.

In February 2011, the state flag carrier Garuda Indonesia sold shares to the public. In 2010, the Indonesia Stock Exchange saw state construction company Pembangunan Perumahan and state steelmaker Krakatau Steel go public.

Last week, Dahlan said that about eight state companies would have IPOs this year. That would be 30 percent more than was originally sought.”

Source: The Jakarta Globe

It refers to the Geothermal Law of 2007, additional implementing regulations and the regulation No. 139 that guarantees financial obligations of PLN under their Power Purchase Agreements. It also speaks about the legal certainty needed to stimulate immediate investment into the sector with main challenges still existing.

The article gives a good overview on the key issues as they surround geothermal development in the country of Indonesia.

Article available at: SSEK

The plants were identified as the Lahendong Unit 4 plant in North Sulawesi, the Ulubelu Unit 3 and 4 plant in Lampung and the Ulumbu plant in Kupang, East Nusa Tenggara.

PLN renewable energy chief Muhammad Sofyan said that the Lahendong Unit 4 and Ulumbu plants would start commercial operation in February after completing testing that began in December.

“The two plants are currently conducting reliability tests for a month so that in February, the plants can begin commercial operation,” Sofyan said on Friday.

The Ulumbu plant has a capacity of 2×2.5 MW. The geothermal potential at the site is estimated at 10 MW.

Lahendong Unit 4 has a capacity of 20 MW. The fourth unit will complement three currently operating units in the area, bringing total production at the site to 80 MW. Geothermal development in Lahendong is run by Pertamina Geothermal Energy (PGE). The cost of electricity from the plant has been pegged at 4 US cents per kilowatt-hour (kWh).

PGE has committed to open two more 20-MW units in Lahendong by 2013. Exploration for a geothermal energy supply for the planned units was underway since 2008, before officials settled on an area in South Lahendong with an estimated potential of 220 MW.

When construction of the Unit 5 and 6 plant has been complete in 2014, PGE will start construction on Unit 7 and 8. The geothermal energy supply for the plants is expected to come from Kotamobagu, which has a potential of 180 MW.

In Lampung, the Ulubelu Unit 3 and 4 plant was expected to yield 110 MW, bringing the site’s total production to 220MW, Sofyan said.

“Unit 3 and 4 is expected to become operational in July or October,” he added.

The price of electricity from the plant has been pegged at 4 cents per kWh.

Despite holding 40 percent of the world’s geothermal reserves of around 28,543 megawatts, Indonesia’s geothermal project development has been minimal.

Although Indonesia began developing geothermal power 30 years ago, the nation currently produces 1,341 MW of geothermal power a year, about 4.6 percent of its potential.

PLN’s use of renewable energy has been low as of the third quarter of 2011.

Coal dominated the company’s energy mix at 42.2 percent, followed by oil-based fuels at 23.7 percent, natural gas at 22 percent, hydro at 6.7 percent and renewable energy (including geothermal) at 5.4 percent.

PLN previously said it wanted to boost geothermal use to 7 percent.”

Source: The Jakarta Post

“Pastika said exploration for the geothermal project should cease in favor of the Bali Crossing project, in which Bali would get power from Java via an aerial cable.

He said results from exploration at three sites in Bedugul were not fruitful and had led to the destruction of four hectares of protected forests. “It’s difficult to green-light the continued destruction of what little forests we have left in Bali,” he said.

Pastika said another reason for his recommendation was that the areas in question were regarded as holy sites by Balinese Hindus and contained 30 temples.

Earlier this month, Energy and Mineral Resources Minister Jero Wacik and members of House of Representatives Commission VII, overseeing energy affairs, flew to Bali to meet with Pastika about the Bedugul project. Wacik said it had the potential to generate 165 megawatts of electricity and could solve the island’s energy shortage.

“Electricity from a local geothermal plant would cost 9 US cents per kilowatt hour, much cheaper than the present cost of 40 cents per kilowatt hour,” Wacik said at the time.

State-owned utility Perusahaan Listrik Negara said Bali received 689 MW of electricity from three gas-powered plants on the island, as well as through an undersea cable from Java.

As of December, electricity consumption on the island had reached 600 MW, leaving only a 14.8 percent energy buffer, far below the 30 percent that is considered safe nationally. Currently, one-quarter of Bali’s 3.9 million residents are not connected to the grid. Rolling blackouts frequently hit the island, including the capital Denpasar.

Given the rapid growth of the island’s tourism industry, experts predict power consumption will reach 1,095 MW by 2017.

Commission VII chairman Effendi Simbolon said Bali’s electricity spending was the largest in the nation. He cited findings by the Supreme Audit Agency (BPK) that said the island wasted up to Rp 200 trillion ($22 billion) annually on buying electricity.

The proposed geothermal project faced immediate resistance when initially announced.

“Bali needs more electricity, but that doesn’t mean it has to come from the island itself,” said the head of Bali’s Council of Customary Villages, Jero Gede Putu Suwena. “As a small island, we don’t have the resources to generate the power needed.”

The Bali branch of the Indonesian Forum for the Environment (Walhi) also opposed the plan, citing the destruction of forests that exploration would bring.”

Source: The Jakarta Globe