T H E G E O T H E R M A L N E W S P A P E R , T H AT B R I N G S Y O U C A R E F U L LY S E L E C T E D N E W S F R O M T H I N K G E O E N E R G Y. C O M
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Branding Geothermal Positioning and promoting – the role of marketing and communication in the geothermal sector While many other renewable energy sectors, such as solar and wind, have seen burgeoning growth in the past decade, geothermal energy has experienced consistent, but slow progress. Geothermal energy is often excluded from the discussion of progress towards more renewable sources of energy. Without a unified voice and clear framework for progress, geothermal may be experience less support in a world striving to attain more renewable energy. It is clear, that the geothermal energy industry must position itself, regionally and internationally, to better promote and enhance the sector. Critical to the success of many products and industries today is the role of marketing, branding and communications. With a unified voice representing geothermal we can better promote geothermal energy within the national and international discussion on energy issues. Patrick Hanson of GeoEnergy Marketing and Alexander Richter of ThinkGeoEnergy wrote an article addressing these concerns for the GRC Annual Meeting 2017. In the article, the authors emphasize the role of branding and creating a message that will resonate. Here are a few key takeaway points raised by the authors:
Picture: Jigokudani Monkey Park, Japan (Clint Koehler, CC)
Fragmented sector - The geothermal industry is very fragmented with only a few large companies, and many medium to smaller sized companies that are sparsely represented by various national and international organizations, mostly due to limited funding. With budgetary constraints, there are limits to research or adequate marketing, that would be required to help bundle efforts towards campaigns promoting geothermal energy to politicians and the public globally for wider acceptance and support.
geothermal industry. What is our collective, unifying message? Something the global geothermal associations have struggled to pin down and collaborate on. As we take a step forward in the unified promotion of our industry – we should collaborate internationally on a concise message. An “elevator pitch” value proposition that promotes, educates and excites the public about geothermal. To do this, collaboration must include the core associations (IGA, GRC, GEA, EGEC, among others), industry leaders and policy champions.”
Challenges faced – There continues to be a lack of alignment of companies with buyers and an ever-changing political landscape and budgets. There are knowledge gaps, limited to no strategic marketing, challenging stakeholder engagements, development and financing challenges, as well as a lack of understanding of the opportunities provided by geothermal energy.
Important role of branding - A brand is more than a logo, catch phrase, or clever product packaging. A fully articulated brand holds a lot of power, when deployed across all areas of the business. Therefore, companies need to shape their integrated marketing communications and sales efforts around their brand even with a small staff and budget. A brand is like a person, committed to adding value to people’s lives and operating with a set of guiding principles. Ask why does the company’s brand exists and what are they trying to accomplish?”
Perhaps most importantly, this unified message must resonate with the public, governments, and those implementing renewable energy policy. There are myriad ways to do this, while perhaps the most effective and prevalent method currently is a strong social media presence. The geothermal industry needs to step up, collaborate on a theme, develop promotional social awareness campaigns, using tagging techniques, and encourage wide support of each other’s media campaigns on all existing platforms.
Hanson and Richter make it clear; “For us as an industry, the lack of brand clarity is most prevalent to the
Send us your thoughts at news@thinkgeoenergy.com (PO)
Meeting – IRENA Global Geothermal Alliance, Florence (Photo: IRENA)
Turkey - new member of the 1 GW Geothermal Country Club (Photo: Ormat)
Unique value proposition - Geothermal energy can be utilized for power generation, in direct use for heating, in residential and industrial applications, as well as for cooling.
GC Invest Geothermal – a new event on financing geothermal (Photo: ThinkGeoEnergy)
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Cerro Pabellon
Today, I am proud to share this Think GEOENERGY Newspaper with you. The newspaper – aimed to be published twice a year – will be distributed at major geothermal events. The aim is to share highlights and specific thematic content with you in a printed format. With this issue we specifically feature the story of Turkey and its incredible growth of its geothermal sector, as well as a story on financing of geothermal projects.
• Start of Construction February 2016 • Elevation 4,500 meters Chile • 130 km from the city of Calama Chilean President Michelle Bachelet • Ca. 600 workers involved in construction efforts inaugurated the geothermal energy plant of Cerro Pabellon in the north- • 48 MW gross installed power generation capacity ern region of Antofagasta, Chile in September 2017. The 48 MW geother- • 345 GWh/ year to be produced • 80 km is the length of the 220 kV mal plant is located at 4,500 meters power transmission line above sea level in and is the first • 9 geothermal wells up to 3,000 geothermal power plant built at such meters deep altitude and in South America. The • Temperature of reservoir around plant was built by Enel and ENAP 260 °C and features two 24 MW units built • About 10 km of pipeline by Ormat. • Start of operation March 2017
Picture sources: Office of the President of Chile, Enel Green Power
If you are interested in an advertisement position for the next issue of the newspaper or inquire about our other advertisement opportunities, drop me an email at alex@ thinkgeoenergy.com
Financing Geothermal Launching a new finance and investment forum as a networking platform for geothermal industry leaders and international investors The geothermal energy sector has always faced challenges in attracting financing, due to its high cost and risk profile particularly in the early stages of development. There is often simply a lack of information and understanding to allow for thoroughly informed investment decisions.
Held in the center of Europe’s financial sector of Frankfurt, the event will be focusing on the important elements of investing in geothermal energy development, such as risk mitigation, early stage financing, market incentives, blended financing options, multi-player projects and exit strategies.
A new investment forum and networking platform for geothermal industry (GI) leaders and international investors, including private equity, infrastructure, debt, institutional investors and public equity funds, as well as public funding partners such as the World Bank, EBRD and other development banks, funds and institutions, aims to change that.
With an increasing interest in development in growth markets, such as Turkey, Indonesia, Africa, Europe, Latin America and others, development continues to face the challenge of attracting adequate funding for projects particularly in the early stages of development. While multilateral programs and development banks are helping development in early stages, there is still insufficient equity funding available to assist geothermal projects take the next step forward.
With the first global geothermal energy investment forum, IGC Invest Geothermal by ThinkGeoEnergy and Enerchange, it is aimed to increase awareness among investors and the geothermal energy industry to educate about opportunities and challenges of investments in energy infrastructure development globally. The event will identify the major challenges to financing geothermal development, and explore innovative solutions to these hurdles. There are tremendous opportunities that geothermal present worldwide and these will be examined in detail.
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The event will feature a series of presentations on market driving forces, early stage financing, risk mitigation, project financing and exit strategies along with country overviews. A roundtable discussion on blended financing options for geothermal development will provide further insights. The event will then conclude with a business dinner lounge providing additional networking opportunities. Speakers at the conference will represent wide variety of players in the sector, including investment,
debt finance, risk mitigation, donor institutions, development, vendors and more. Countries represented will be Germany, France, Netherlands, Mexico, Switzerland, Indonesia, Kenya, Iceland, New Zealand, U.S. and more. This event is set up to become an annual gathering of representatives of the geothermal and financial sector that will help foster investment and financing into the growth of the global geothermal energy sector.
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Geothermal energy in Latin America Boosting low carbon economic development in Latin America
“Central America holds some of the world’s most promising geothermal resources, that if utilized can help the region secure and deliver, inexpensive electricity while stimulating low-carbon economic growth.” Gurbuz Gonul, Acting Director of Country, Support and Partnerships at IRENA. Central America is well known for their vast geothermal resources. While knowing about them is one thing, developing these vast resources is another. The International Renewable Energy Agency (IRENA) met in El Salvador at the end of August 2017 to hold a workshop with LaGeo to explore and better understand how to utilize these extensive geothermal resources and how to implement them for nations that are rapidly developing with growing electrical demands. Central American countries, which currently rank among the world’s top countries in terms of the share of installed geothermal energy, have the potential for 20 times their currently installed capacity. The countries with the highest geothermal capacity in the region are Costa Rica - 305 MW, El Salvador - 205 MW and Nicaragua - 149 MW, Guatemala - 53 MW and Honduras with the Platanares geothermal plant that just started operations -35 MW. Geothermal power has the potential to satisfy nearly double the region’s predicted electricity demand through 2020, and in turn spur growth. “The development of more geothermal projects in the Central America region can boost the economy and contribute
to the reduction of green house gases,” said Ms. Tanja Gabriele Faller, Regional Director of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Programme for the Promotion of Geothermal Energy in Central America. GIZ and the German government have been working with IRENA for several years in the region. Several obstacles, including a lack of adequate policies and regulations for the use and development of geothermal resources, hamper the expansion of geothermal in Central America. Mr. Gonul of IRENA added, “Geothermal energy has proven to provide stable and affordable electricity, and offers flexibility through the direct use of geothermal heat in domestic, commercial and industrial sectors.” IRENA
started implementing a regional capacity building program in Central America under the Global Geothermal Alliance, a multi-stakeholder initiative aiming to increase the share of geothermal energy in the global energy mix. The capacity building program is supporting the development capabilities of various stakeholders along the geothermal value chain in Central American countries. A key aspect of the El Salvador event was the strengthening the institutional and personal networks of the region, in the areas of geothermal technology, policy, regulation and finance.
Pictures of the Ahuachapán Geothermal Plant of LaGeo, El Salvador (ThinkGeoEnergy)
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Sarulla Geothermal Power Plant, Indonesia With capacity of 330 MW, Sarulla will be the world’s largest single contract geothermal power plant when finalized in 2018 Indonesia’s geothermal potential has been well known for over 100 years. Historically, foreign companies have explored and tapped into the country’s geothermal extensive reserves. However, Indonesia’s geothermal sector has remained under developed considering the potential reserves. There were many barriers to entry, including a complex regulatory framework, inadequate electricity tariff, and many financing issues that complicated private investment. It was only in 2003 that the government of Indonesia passed the “Geothermal Law” that provided a framework for geothermal exploitation and development.
encourage this private investment was Indonesian government’s introduction of the Business Viability Guarantee Letter (BVGL) to assure the credit worthiness of the state-owned electricity utility, Perusahaan Listrik Negara (PLN). PLN has been running in a financial deficit due to its legal obligations to subsidize consumers’ electricity bills. The BVGL acts as a guarantee of the credit worthiness of PLN, which will distribute the electricity from Sarulla when it comes online, and consequently ensures the confidence of investors to participate in such geothermal projects.
With this legal framework in place, and considerable public support, geothermal deployment has risen 4.8% per year from 0.8 GW in 2003 to 1.3 GW in 2013. Indonesia is well on their way to becoming the largest geothermal energy producers in the world. This is good news for a rapidly developing country in which demand for electricity is expected to grow 8.7% annually.
The Sarulla project reached a financial close in May of 2014 and raised 1.2 billion USD from a range of international investors including; Japan Bank for International Cooperation, Asian Development Bank, Canada Climate Fund, and a variety of commercial bank syndicates.
Not only will this reduce the dependence of electricity generated by fossil fuels, the plant is estimated to create 1,800 additional jobs for the construction and operation of the project. Furthermore, the Sarulla plant will help close the divide between demand and supply in the region, while encouraging new business opportunities and ancillary services.
When the Sarulla plant come fully online, it is expected to bring many benefits to North Sumatra.
A large part of becoming the world’s largest geothermal energy producer will be bringing the new Sarulla Geothermal Power Plant online in stages. The plant, located in North Sumatera Province and owned by Pertamina Geothermal Energy, is scheduled to start delivering power in 2018. With a total capacity of 330 MW, Sarulla will be the largest single contract geothermal power plant in the world. The project will be developed as three separate units utilizing combined cycle technology, in combination with single flash and binary ORC technology developed by Ormat Interantional. The Sarulla Geothermal Power Plant was only possible because of Indonesia’s domestic push and passage of the 2003 Geothermal Law. This combined with a stable legal framework encouraged a high level of public support, which in turn encouraged private financing. This project has the most private sector involvement of any geothermal project on an undeveloped field in Indonesia. A major incentive to
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Pictures: Sarulla Geothermal Plant (Copyright © 2017 Ormat. All Rights Reserved), Start of Operation (DPR RI)
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Turkey breaks into the 1 GW Geothermal Country Club With the new Kizildere and Efeler plants online, Turkey joins the ranks of countries with more than 1 GW installed capacity Turkey has made remarkable progress in the growth and development of its geothermal sector. This investment has started to payback with an increasing amount of geothermal power generation capacity coming on-line. With the addition of two geothermal power plants, Turkey has broken onto the list of countries with more than 1,000 MW of installed geothermal power generation capacity, the 1GW Country Club. The country has now an installed capacity of 1,005 MW. The first plant is the Kizildere III geothermal power plant by Zorlu Enerji, which received a temporary operation acceptance by Turkey‘s Ministry of Energy with 99.5 MW. When finished the plant will have a total generation capacity of 165 MW. The plant is located in the Karatas district of Denizli and Aydin provinces. The second plant is Unit 6 of the Efeler geothermal power plant at Germencik in Aydin province by Güris Holding. It added 22.6 MW to the plant, bringing the total capacity of the Efeler geothermal plant to 232.2 MW.
Pictures (from top): Kubilay plant (JeotermalHaberler), Dora 2 plant (Ormat), Kizildere plant (Zorlu Enerji)
ThinkGeoEnergy maintains a Turkish-language service at jeotermalhaberler.com – to connect drop an email to Eren Günüç at eren@jeotermalhaberler.com
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Andrea ‘Andy’ Blair Chair of Women in Geothermal (WING)
Andrea ‘Andy’ Blair around the world worChair of Women in Geothermal (WING) Founded in 2013, the mission of WING is to promote the education, professional development, and advancement of women in the geothermal community. Can you tell us a little about WING? WING is for those men and women (yes we love men!) who what to be part of a global movement that is having a positive impact on our industry. It is free to join! What are the key activities of WING?
king in the geothermal industry. Our project “WINGman Special Taskforce”, a group of men (with the kind support of their employer – thanks Mercury!) is underway. This group will provide advice on how WING can be more ‘Manfriendly’ (we’re looking to have 50% male membership). We are setting up trial tools and techniques in the workplace to support gender equality; observe and act when they see poor behaviours or bias, and to recruit, encourage and demonstrate to other men how they can support their women colleagues.
Our “Project Matua” Our key activities are (Parents) is currently to connect, inform, looking at maternity and advance. Current and paternity options projects are focused on increasing the visibility that encourage women of women working in the to remain engaged and geothermal sector, remo- achieving their potenving barriers for advan- tial in the geothermal cement, provide tools for industry. employers to improve equality in their organi- Any final thoughts you want to share zations, and gather and interpret gender data to with us Andy? better understand where You will see us. You we are. will join us. Resistance is futile! What is WING currently working on? If you wish to know more about WING’s We are working on a goals or join WING documentary, funded by the Icelandic govern- please visit our website ment, called ‘Go-for-No’ www.womeningeotherfocused on women from mal.com
African Geothermal Development Development on geothermal projects continues in East Africa with concrete steps taken in Kenya, Djibouti and Ethiopia Geothermal development in East Africa is continuing, last but not least, through the support of programs such as the Geothermal Risk Mitigation Facility (GRMF) by the African Union and German KfW, international donors, and development banks funding growth. There is also increasing interest in bilateral cooperation and financial support for geothermal development in Eastern Africa, among others with the New Zealand/ Africa Geothermal Project, the UK driven East Africa Geothermal Energy Facility (EAGER), a new funding agreement between Japan and the African Development Bank, U.S.-driven Power Africa, a planned East Africa initiative by Italy and various capacity building efforts.
In Uganda, development efforts continue with the national power utility seeing geothermal as part of their growth strategy. A cooperation agreement with a consortium from the Netherlands on geothermal development and several private parties are looking at development. With the support of New Zealand, a geothermal project on the Comoros Islands continues to seek funding for drilling. So, East Africa continues to be one of the key growth markets for the global geothermal sector.
Development efforts continue in Kenya with a contract signed for the development of smaller geothermal plants at Olkaria, and the extension of Olkaria I securing funding. Construction kicked off for the Olkaria V project, with continued private development efforts taking place at Menengai, Akiira and Olsuswa. Earlier this year, Kenya’s President officially inaugurated the 81.6 MW geothermal wellhead power plants, so things are moving. In Djibouti things are finally kicking off, with funding secured and a drilling contract signed for the Fiale Caldera project with Iceland Drilling. Negotiations in Ethiopia seem to be bearing fruits with an agreement in sight on a PPA for the Corbetti geothermal project, which will have a positive impact on additional private development projects in the country. There was also a tender issued for the Tendaho project, which indicates movement in one of the most exciting geothermal countries in East Africa. This summer, Tanzania won $21.7 million funding from CIF for its Ngozi geothermal project, which could help encourage further developments in the country. A geothermal project in Zambia received funding from the U.S. Trade and Development Agency for a feasibility study.
Pictures (from top): Corbetti site and Aluto Langano - Ethiopia (ThinkGeoEnergy), Olkaria inauguration (KenGen)
ThinkGeoEnergy maintains a Spanish-language service at piensageotermia.com – to connect drop an email to Carlos Jorquera at cjorquera@thinkgeoenergy.com
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IRENA Global Geothermal Alliance Closer international cooperation to advance geothermal energy development worldwide The Global Geothermal Alliance (GGA) held a high-level international conference in September 2017 in Florence, Italy. The event was co-organised by IRENA, the Ministry of Foreign Affairs and International Cooperation, the Ministry of the Environment and Protection of Land and Sea, and the Ministry of Economic Development. GGA is a ‘multi-stakeholder’ platform, launched at the COP21 in 2015 by the
International Agency for Renewable Energy (IRENA). The aim of GGA is to achieve the ambitious goals set forth under the Paris Agreement by enhancing the exploitation of geothermal energy worldwide. The meeting assembled ministers and representatives from countries around the globe to discuss common goals in the pursuit of geothermal energy development and what mechanisms can deliver a greater level of certainty to investors and developers. There was a focus and discussion on the role of government in geothermal development, and how geothermal
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can factor in the decarbonising of the global economy. During the conference, the “Florence Declaration” was established with the ambitious target of a fivefold growth of geothermal power generation capacity and more than two-fold growth in geothermal heating by 2030. To reach the full potential of this alliance, the important and crucial role of including the private sector was discussed during the meetings. For more details about the alliance visit: www.globalgeothermalalliance.org
Pictures: IRENA & ThinkGeoEnergy
Q&A Dr. Marit Brommer Executive Director, International Geothermal Association (IGA) Founded in 1988, the IGA is a scientific, educational and cultural
1 GW Geothermal Country Club The U.S., the Philippines, Indonesia and Turkey – Who’s next? The club of countries with more than 1,000 MW of installed geothermal power generation capacity will certainly grow over the coming years. Current club members include; Indonesia, the United States, the Philippines, and Turkey, with many other countries closing in on the 1 GW milestone. With projects on-going in Indonesia, the country will sooner rather than later, surpass its neighbour the Philippines as well as the United States with the most MWs online. The United States will remain among the top geothermal nations, but with limited development currently going on, it will likely not see similar growth rates as other nations over the coming years. With an emphasis on the expansion of
organisation representing the global geothermal energy community with more than 5,000 members in over 65 countries. Dr. Brommer joined IGA as Executive Director in April 2017 at its Secretariat in Bochum, Germany.
current facilities and limited new development coming on-line, the Philippines will fall behind Indonesia very soon. With the development of mostly smaller scale geothermal power plants, Turkey has moved rather rapidly over the past few years and has positioned itself as a role model for other countries wanting to develop its geothermal resources.
How would you describe the main challenges of your first few months with IGA? Being both new to IGA and Geothermal Energy, I had to hit the ground running in terms of building my network within the geothermal commu-
nity. I am overwhelmed with the enthusiasm of all our members, partners and our board who have all helped me to connect and feel at home.
near future? There are a few things: Branding our IGA label. Create value for our members. Become a trusted partner for industry.
What do you see as key elements to work on for IGA in the
will propel Kenya ahead and closer to the 1,000 MW threshold. On going development will move Iceland closer, but it remains to be seen if their development will be sufficient to join the ranks of its peers, New Zealand and Italy.
Next on the list is Ethiopia. With an agreement in place and a PPA for the Corbetti project, and other private-sector and government development efforts, things are not looking as bleak as they once did and could put Ethiopia back on the geothermal map.
For the future members of the 1 GW Country Club, traditional geothermal countries like Mexico, New Zealand and Italy are not far off and need only small additions to join the ranks. New Zealand is most likely to be the next country to reach 1 GW, while political will in Mexico and Italy will determine when these countries will join the club. Several projects under development, by both the state-owned GDC and KenGen, but also private sector projects that
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Think GEOENERGY Newspaper – Edition 01/ Fall 2017 - a publication by ThinkGeoEnergy.com Editor: Alexander Richter • Managing Editor: Parker O’Halloran • Design: Linde Richter Layout: Bratislav Dikic • Contact: news@thinkgeoenergy.com • www.thinkgeoenergy.com Address: ThinkGeoEnergy ehf., Laugavegur 13, 101 Reykjavik, ICELAND.