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Barriers of GeothermalDevelopment and the Importance of

1

West Japan Engineering Consultants, Inc.

Director

Masahiko KANEKO

Contents of Presentation

1. Current Situation of World-wide Geothermal

Introduction

nergy za on

2. Values of Geothermal Energy

3. First Big Barrier: Resource Development Risks4. Second Big Barrier: Large Up-front Investment

5. Costs of the Governmental Role v.s. Benefits of

2

Geothermal Energy

6. Conclusion

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Messages of this PresentationGeothermal energy has many values. But actual development is

very slow.

Introduction

It is because there are two big barriers.

- Resource development risks

- Large up-front investment

Private companies are not willing to develop geothermal energy.

3

o overcome s, overnmen a o e ecomes cruc a .Governmental incentive needs its costs.

But benefits of geothermal energy surpasses governmental costs.

Therefore, Governmental incentives will pay.

1. Current Situation of World-wideGeothermal Energy Utilization

4

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Structure of Geothermal Power PlantThere is huge steam and hotwater stored underground involcano areas. GeothermalSteam Turbine

Transmission Line Cooling Tower

Geothermal Energy Use

power plant extracts thissteam and hot water throughproduction wells.

Steam is separated and usedto rotate turbine to generatepower. Hot water is reinjected

ReinjectionWells

Separator

Rain Water

Condenser

Pump

Generator

SteamHot WaterCooling Water

5

n o un ergroun rougreinjection wells.

Geothermal power plant is akind of thermal power plant ofwhich boiler is earth itself.

Fractures in sampling core

Magma Chamber

Geothermal Reservoir

History of Geothermal EnergyGeothermal Energy Use

19 century Wooden fuel of boric acid factory was converted to geothermal steam in Larderello, Italy.

1904 The first geothermal power generation was done in Larderello.

Left: Larderello GPP in 1904. Right: Mr. Prince Piero Ginori Conti, who isthe inventor of GPP.

6(Source: IGA What is geothermal energy?)

1942 The output became 128MW

1919 The experimental was started in Beppu, Japan. 1.1kW generation was succeeded in 1925.

1958 Geothermal power generation was succeeded in Wairakei, New Zealand. (The first water

dominated type)

1960 Geothermal power generation was started in U.S.A.

1966 Geothermal power generation was started in Japan

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Geothermal Power Generationin the World (1)


Geothermal power generation is used in 24 countries and capacity is more than 10,000

MW

Japan

536 MW

USA

3,093

Russia

82 MW

El

Iceland

575 MW

Philippine

Turky

82 MW

German

yFrance

16 MW

China

24 MW

Portugal

29 MW

MexicoAustria

1 MW

Italy

843 MW

World Geothermal Energy Use (2010(MW)Country Capacity Country Capacity

U.S.A 3,093 Japan 536

Philippines 1,904 El Salvador 204

Indonesia 1,197 Kenya 167

Mexico 958 Costa Rica 166

7(Source) Geothermal Power Generation in the World 2005-2010 Update Report

Nicaragua

Costa

Rica

New

Zealand

sGuatemal

a

Pupa New

Guinea

Ethiopia

7 MWKenya

167 MW

Indonesi

a

Australia

1 MWTotal Installed Capacity in the World (2010)

24 countries 10,718 MW

Italy 843 Nicaragua 88

New Zealand 628 others 356

Iceland 575 Total 10,715



GPP ca acit has increased b 200-250 MW er ear.

1,500

2,000

2,500

3,000

3,500

rmalCapacity(MW)

1982

1990

2000

2005

2010

.

6,000

8,000

10,000

12,000

(MW)

Evolution of Geothemal Energy Use (MW)

0

500

1,000

U.S.A.

Philip

pines Ita

ly

Mexico

Indo

nesia

Japa

n

NewZe

aland

Icela

nd

ElSalv

ador

CostRi

ca

Nica

ragu

a

Geothe

8(Source: Thermal and Nuclear Power Association of Japan)

0

2,000

,

Industrial Country 1,975 4,152 4,666 4,580 5,812

Developing Country 890 1,854 4,043 4,358 4,905

Total 2,865 6,006 8,709 8,938 10,717

1982 1990 2000 2005 2010

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0 5 10 15 20 25

Share of Geothermal Power Plant in Total Installed Capacity (2010 (%)

,power plants account for more than10% of the total installed capacity.

Such countries are;

Iceland, Kenya, El Salvador, andPhilippines.

In Nicaragua, Costa Rica and NewZealand, geothermal power plants

Iceland

Kenya

El Salvador

Philippines

Nicaragua

Costa Rica

New Zealand

Indonesia

Guatemala

9

are a so mpor an power sourcewith their capacity accounting formore than 5% of total installedcapacity.

(Source: Thermal and Nuclear Power Association of Japan)

Mexico

Ethiopia

Italy

U.S.A

Turkey

Japan

Portuguese

Geothermal Development Planin the World

The world has an aggressive geothermal development plan.


1,500

2,000

2,500

3,000

n2005-2015)(MW) World Total 9,568 MW

2005 Actual 8,933 MW

2015 Outlook 18,501 MW

in 2015. Many countries such as U.S.A., Indonesia, New Zealand,Iceland, Philippines, Kenya have aggressive development plans.

Geothermal develo ment lan b10,000

15,000

20,000

apacity(MW)

8,933(2005)

18,500(2015)Evolution of geothermal plantcapacity in the world

0

500

1,000

U.S.A.

Indo

nesia

NewZe

alnd

Icela

nd

Philii

pine

s

Keny

a

Mexico

Turky

Nica

ragu

aChille

DevelopmentPla

10(Source) BertaniWGC 2010, Bali, (Source) BertaniWGC 2010, Bali,

countries

0

5,000

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

Installed

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14,000

16,000

18,000

3,000

3,500

4,000

Capacity(MW)

Generation(GWh)

Geothermal Development in U.S.A.Geothermal Potential in U.S.A. Evolution of Geothermal Power Plant


0

2,000

4,000

6,000

8,000

10,000

12,000

0

500

1,000

1,500

2,000

2,500

Genera

tion

(GWh)

Capac

ity

(MW)

WA

Geothermal Power Plants in U.S.A.

(SourceDOE)(SourceDOE, Energy Information Agency )

U.S.A. has some 23 GW geothermal potential

11State currently producing geothermal power

New state with geothermal projects in development

CA

2,605 AZ

>20

NV

333

AK

0.68

ID

15

UT

50CO

10

NM

0.24

HI

35

Unspec.

OR

~292 WY

0.25

U.S.A.

3,039 MW

(2008)

FL

0.25

(SourceGeothermal Energy Association )

mainly in the West and has 3,040 MW capacity in 8states in total. (the largest in the world).

Additional 3,600~5,700 MW of development plansare reported in 2009.

R&D of Enhanced Geothermal System (EGS) is

also strongly promoted.

IIbbooii --JJaabbooii 1100MMWW

SSeeuullaawwaahhAAggaamm227755MMWW

LLaauuDDeebbuukk--DDeebbuukk// SSiibbaayy aakk22MMWW,,3388MMWW

SSiippaahhoolloonnTTaarruuttuunngg 5500MMWW

: Expansionfield 114400MMWW (orange)= installed, 112200MMWW (White)= expansion

: Newdevelopment field 224400MMWW (yellow) = Newdevelopment

LLuummuuttBBaallaaii ((ggrreeeenn)) ::PPEERRTTAAMMIINNAA WWoorrkkiinnggAArreeaa MMuuaarraallaabbuuhh((wwhhiittee)) ::OOppeennFFiieelldd

EXPLOITABLE RESOURCE POTENTIAL 50 fields)XPLOITABLE RESOURCE POTENTIAL 50 fields)

Geothermal Development in Indonesia


Geothermal Potential in Indonesia Geothermal Development Plan in Indonesia

8,000

9,000

10,000 OthersIPP undecidedIPP in TenderIPP in Pertamina Work AreaPLNPertaminaExisting

9,500MW

1,900MW

1,200MW

JICA/WestJECICA/WestJEC 1919

SSaarruull aaSSiibbuuaallBBuuaallii663300MMWW

SS.. MMeerraappii SSaammppuurraaggaa110000MMWW

MMuuaarraallaabbuuhh224400MMWW

GG..TTaallaanngg3300MMWW

SSuunnggaaiiPPeennuuhh335555MMWW

LLeemmppuurr//KKeerriinnccii2200MMWW

BB.. GGeedduunnggHHuull uuLLaaii ss//TTaammbbaannggSSaawwaahh991100MMWW

MMaarrggaaBBaayyuurr117700MMWW

LLuummuutt BBaallaaii662200MMWW

SSuuoohhAAnnttaattaaii GG..SSeekkiinnccaauu339900MMWW

RRaajjaabbaassaa112200MMWW

WWaaiiRRaattaaii112200MMWW

UUll uubbeelluu444400MMWW

KKaammoojjaanngg114400MMWW,, 118800MMWW

CCoossoollookk CCiissuukkaarraammee118800MMWW

CCiittaammaannGG..KKaarraanngg2200MMWW

GG..SSaallaakk338800MMWW,,112200MMWW

DDaarraajjaatt 114455MMWW,,118855MMWW

GG.. WWaayyaanngg--WWiinndduu111100MMWW,,229900MMWW

GG..PPaattuuhhaa550000MMWW

GG..KKaarraahhaaGG..TTeell aaggaabbooddaass440000MMWW

TTaannggkkuubbaannppeerraahhuu2200MMWW

DDiieenngg6600MMWW,,334400MMWW

TTeelloommooyyoo5500MMWW

UUnnggaarraann118800MMWW

WWiilliiss//NNggeebbeell 112200MMWW

IIjjeenn4400MMWW

BBeedduugguull 117755MMWW

HHuuuuDDaahhaa3300MMWW

UUlluummbbuu3366MMWW

WWaaiiSSaannoo1100MMWW BBeennaaMMaattaallookkoo2200MMWW

SSookkoorrii aaMMuuttuubbuussaa 2200MMWW

OOkkaaLLaarraannttuukkaa2200MMWW

AAttaaddeeii1100MMWW

LLaahheennddoonngg--TToommppaassoo2200MMWW,,332200MMWW

KKoottaammoobbaagguu114400MMWW

SSuuwwaawwaaGGoorroonnttaalloo5555MMWW

MMeerraannaa220000MMWW

TTuulleehhuu2200MMWW

JJaaiilloolloo2200MMWW

SUMATRA

4,520MW

JAVA-BALI

3,635MW

NUSA TENGGARA

146 MW

SULAWESI

735MW

MALUKU

40 MW

IINNDDOONNEESSIIAA5500FFiieellddss99,,007766MMWW

(SourceMEMR(SourceJICA Indonesia FIT study (2009) )

Indonesia has the world-largest class geothermalpotential of some 27 GW. Current installed capacity isEvolution of Geothermal Power Plant

0

1,000

2,000

3,000

4,000

5,000

6,000

,

2010 2011 2012 20132014 201520162017 2018 20192020 2021 20222023 2024 2025

Year

Capacity(MW)

1,200MW

500MW

700MW

1,200MW

2,450MW

2,450MW

220MW

70MW

2nd Crash program

(new 3,967MW)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

EnergyProduction(GWh)

InstalledCapacity(MW)

Installed Capacity (MW) Production (GWh)12

(SourceMEMR )

1,200 MW and is the third largest in the world.

Indonesia has an aggressive development plan toexploit 9,500 MW geothermal energy by 2025. Morethan 5% of primary energy will come from geothermal.

An acceleration plan (Crash Program-2) to developnew 4,000 MW by 2014 was announced in 2010 andis promoted at present.

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Geothermal Development in IcelandEffect of district heating using geothermal energy

Left : Air pollution by burning fossile fuels was serious in 1933.Right : 99.7% of distric heating source was palced by geothermal energy in

1970, and ari pollution problem was settled.


Geothermal Power Plants in Iceland

4,500

5,000

900

1,000

(Source (SourceIPCC report (2008 January) )

Iceland has 575 MW of installed geothermalEvolution of Geothermal Power Plant

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

100

200

300

400

500

600

700

800

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

AnnualGneration(GWh)

InstalledCapacity(MW)

Installed Capacity (MW) Annual generation (GWh)13

(SourceIceland Statistics )

.

Geothermal accounts for 26% of total electricitygeneration.

The capacity will increase to 800 MW by 2015.

Hot water for district heating is supplied fromgeothermal plants in 2030 km distance toReykjavik city. More than 60% of primary energy ofIceland comes from geothermal.

Geothermal Development in KenyaVolcano belt SourceSmithsonian Museum Olkaria II plant 35MWx3unit GDC 20-year business plan


Geothermal potential in Kenya

Kenya has some 7,000 MW geothermal potential.Current installed capacity is 204 MW in 2010.230-

860M

Geothermal potential inRift Valley

14

Since it largely depends on imported fuel and itshydro power is easily affected by drought, Kenyahas an aggressive development plant ofgeothermal energy. Kenya plans to expandgeothermal capacity to 2,750 MW by 2029.

Kenya established Geothermal DevelopmentCorporation (GDC) as a vehicle to attain thedevelopment plan.

7,000MW+

W

650

MW

5,000MW+

Africa Rift ValleyGeothermal

Potential

15,000 MW +

450

MW

(Source Geothermal Stakeholders' Workshop (2010)

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2. Values of Geothermal Energy

15

Value of Indigenous EnergyGeothermal Energy Values

(1) The geothermal power is a pure domestic energy and contributes to theenergy independence through stable power supply.

100

120

140

160

)(US$/B)

Oil Price (WTI Spot Price FOB)

(2) The 50MW geothermal field corresponds to the oilfield of about 500,000

barrels/year production capacity with no production decrease.(50MW8,760h0.8(capacity factor)2,250kcal/kWh(oil-conversion-ratio-for-power-generation)9,250kcal/l(calorific value of crude oil)6.29b/kl=536,000b/yr)

0

20

40

60

80

WTISpotPrice(FO

16

50MW geothermal500,000 barrels in annual

output

It corresponds to the

oilfield development.(Source: Energy Information Agency, DOE, U.S.A.)

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Value of Bulk Energy Supplier

Geothermal Energy Values

The plant factor of geothermal power generation has been proven as high as about70~80% and this high operation performance, which can be comparable to that ofnuclear power plant, also contributes to the stable energy supply.

Plant factor of each type of electric power

80

100

Geothermal energy can produce electricity instable manner without any seasonal or dailyfluctuation.

Plant Factor of Hacchoubara Geothermal PP

0

20

40

60

80

100

120

140

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

ow acor in ydro ower an in yus u

Kyushu EPC.

17

0

20

40

60

Hydro po we r Th ermal N uc lear Win d po we r So lar Ge oth ermal

Plantfactor

(%)

(Source: Kyushu Electric Power Co.)

0

10

20

30

40

50

60

70

80

90

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

PlantFactor(%)

Year

U ni t -1 ( 55M W 1977 U ni t -2 ( 5 5M W 1990)

Value of Energy insulated fromEconomic Fluctuations


The geothermal power generation requires a large up-front capital expense, but

Depreciation of Exchange Rate during 1995 - 2005 (to US$)

1.03

0.76

1.00 1.001.00

1.20

does not require fuel expense in the operation stage.

Therefore, it is not influenced by the future increase of the imported energy pricedue to the increase of world energy price and/or the depreciation of the local

currency.

4.0

5.0

6.0

7.0

t(

/kWh)

Ave.= 3.9 /kWh

0.22

0.45

0.600.66

0.03

0.500.46

0.37

0.60

0.00

0.20

0.40

0.60

.

Indo

nesia

Philip

pines

Thailan

d

Mala

ysia

China

Turkey

Guatem

ala

ElSalv

ador

Hond

uras

Nicaragu

a

CostaRi

ca

Pana

ma

Mexic

o

Ratio

18

0.0

1.0

2.0

3.0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Leveiz

edC

ost

Year

GenerationCos

Dep. (Initial) Dep. (Add'nal) O&M Interest

(Source: calculated by West JEC)

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Value of EnvironmentallyFriendly Energy


Geothermal power plant has no combustion process. Therefore, sulfur oxide, nitrogenoxide and dust and other air pollutants in combustion process are not produced.

0

2

4

6

8

10

12

Lbs/MWh

Sulfur Dioxide Emission Comparison

Lbs/MWh 10.39 12.00 0.22 0.35

Coal ThermalPP

Oil Thermal PP Natural Gas Geothermal

Nitrogen OxideEmission Comparison

0 200 400 600 800 1000

Coal Thermal PP

Oil Thermal PP

CO2 Emission in Life-cycle (g-CO2/kWh)

The amount of life cycle CO2 emission from geothermalpower plant is also very low.

It is environmentally-friendly energy from not only localbut also from global perspective.

19

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Lbs/MWh

Lbs/MWh 4.31 4.00 2.96 0.00

Coal ThermalPP

Oi l Thermal PP Natural Gas Geothermal

(Source: IGA A guide to geothermal energy and the environment)

LNG Single Cycle PP

LNG Combined Cycle PP

Nuclear

Hydropower

Geothemral

Solar

Windpower

by Fuel by P lant

(Source: Central Research Institute of Electric Power Industry, Japan )

Example of Multi-purpose use of geothermal energy in Kenya

Value of Energy contributingto Host Society


20

eo erma we s prov e

(i) Electric power(4,000kW) for own use,

(ii) Heat to dry inside of greenhouse to prevent diseases,

(iii) CO2 to promote photo-synthesize.

Tri-generationsystem

for agriculture

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Two Big Barriers of Geothermal EnergyAlthough geothermal energy has many values, the actual


expectation in many countries.

Why ?

Because there are Two Big Barriers againstGeothermal Development.

21

1. Large resource development r isks,

2. Financial burden of large up-front investment,

Lets see these barriers in detail and consider effectivecountermeasures.

3.First Big Barrier:

Resource Development Risks

22

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Barrier-1: Risks of Resource DevelopmentGeothermal is site specific energy. The key factors of powerplant is deferent site by site. There is no standard.

Whats worse we can not redict them accuratel in advance.


We can know these characteristics after we finish actualdevelopment.

Distribution of production well depth in Japanese GPPs Distribution of average well output in Japanese GPPs

0

500

1,000

a b c d e f g h i j k l m n o p

Power Plant

5.0

6.0

7.0

8.0

OneWell(MW)

23

1,500

2,000

2,500

3,000

3,500

(m)

0.0

1.0

2.0

3.0

4.0

0.0 20.0 40.0 60.0 80.0

Authorized Rated Output of Power Plant (MW)

AveragePowerp

er

Economics of a ModelGeothermal Power Plant


Items Specifications Remarks

Capacity 60MW 1 unit

Construction Costs USD 180 million w/o interest

Construction Period 6 years

Production Well Drilling Costs USD 5 million per well Depth = 2,000m, @ 2,500$/m

Average Steam Output per Well 8 MW per well 8 wells needed

Construction Period 6 years

Operation Period 30 years

Equity Costs 17.0 % 100% (Explo.), 30% (Const.)

Debt Costs 6.5%, 15 (3) years 70% (Const.)

Electricity Selling Price USD 9.9 cents/kWh

These conditions provide 14.0% IRR (Internal Rate of Return) and theproject seems attractive. But

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Risk Analysis (Monte Carlo simulation)

Risk Factors Base case

Risk Analysis (Monte Carlo Simulation)

Variation range Mean ( Standarddeviation ()


Well depth probability distribition assumption

0.300

0.400

0.500

0.600

0.700

0.800

0.900

1.000

Probability(cum.)

0.040

0.060

0.080

0.100

0.120

Probability

Normal distribution

= 2,000m

= 400m

Average well output probability distribition assumption

0300

0.400

0.500

0.600

0.700

0.800

0.900

1.000

Probability(cum.)

0.040

0.060

0.080

0.100

0.120

Probability

Normal distribution

= 8.0 MW/well

= 2.5 MW/well

Production Well Depth 2,000 m 1,000m 3,000 m 2,000 m 400 m

Average Well Output 8 MW per well 1.6 MW 14.4 MW 8 MW 2.5 MW

0.000

0.100

0.200

1,00

0

1,10

0

1,20

0

1,30

0

1,40

0

1,50

0

1,60

0

1,70

0

1,80

0

1,90

0

2,00

0

2,10

0

2,20

0

2,30

0

2,40

0

2,50

0

2,60

0

2,70

0

2,80

0

2,90

0

3,00

0

Depth (m)

0.000

0.020

Probability Probability (cum.)

0.000

0.100

0.200

.

1.60

2.24

2.88

3.52

4.16

4.80

5.44

6.08

6.72

7.36

8.00

8.64

9.28

9.92

10.56

11.20

11.84

12.48

13.12

13.76

14.40

Average well output (MW/well)

0.000

0.020

Probability Probability (cum.)

Random depth and random well output are chosen in MonteCarlo simulation. A 1,000-time trial shows how the resourcerisks are large in geothermal power plant project.

The example of profitability of GPP project (by Monte Carlo method)

the profitability becomes as follows by Monte Carlo simulation.

The profitability varies in wide range. It is a very risky business.

Evaluation of Resource RisksResource Development Risks

60

80

100

120

140

160

ba

bility(Times

/1000times

trial)

Number of Trials = 1000 times

Price = 9.9 c$/kWh,WACC = 11.1%

Target FIRR = 14.1%

Average (= 12.9%Standard deviation) =2.97%

Private companies are unwilling to start this kind of risky business.

Probability

Coal-fired

Risk comparison betweenGeothermal project andCoal-fired project

(conceptual chart)

26

0

20

40

- 5% 5 %-

6%

6%-

7%

7%-

8%

8%-

9%

9%-

10%

10%-

11%

11%-

12%

12%-

13%

13%-

14%

14%-

15%

15%-

16%

16%-

17%

17%-

18%

18%-

19%

19%-

20%

20%-

21%

21%-

22%

22%+

Pro

There are several countermeasures to this question.

Return of Investment

Business Risk

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14

To add risk premium into the purchase price of geothermal energy .

Risk-takin should be aid b reward

Possible Measures to reduce Risks (1)


It is necessary to decide anAppropr iate Purchase Price that reflectsresource risks.

Risk

Risk should be rewarded by profit.

Risk premium may improve profitability of the project.

27

prem um

Profitable line

Many countries adopts Feed-in-Tariff (FIT) system to promote renewable energy.FIT prices of more than 15 cents$/kWh are offered in some countries.

FIT in German for eothermal is 15.7 cents /kWh for lants with 10 MW

Possible Measures to reduce Risks (1)


0.30

0.40

0.50

0.60

riff(USD/kWh)

(Note)

Exchangerate1EUR=1.25USD1USD=80.0JPY

capacity or less, and 10.3 cents /kWh for plants with 10 MW or more. Owingto this FIT, five geothermal power plants are built in Germany.

Plant Scale FIT (/kWh)

< 10 MW 0.157

> 10 MW 0.103

Geothermal FIT in Germany Geothermal FIT in many countries

0.00

0.10

0.20

Germany

(10MW

)

France

( Incentive CostsIncentive Costs < Benefits

Summary of Benefitsof Geothermal Energy

There are two benefits in geothermal energy

Benefits of Geothermal Energy

w en compare w a erna ve erma .

- Fuel Saving Benefits (for the Society)

- Extra Tax Benefits (for the Government)Incentives of Government are effective to

promote geothermal development.

50

ncen ve cos s are ess an e e ec s.

Incentives costs are less than Tax Benefits ofthe government.

In addition, the society can enjoy Fuel SavingBenefits.

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Benefits in Construction Stage (1)

-

Oil,Gas, Geothermal mining(Drilling service)

Oil refinary (Fuel)

Domestic Procurement (35%)

1 210$/kWConstruction work of

~ Indonesias case ~


0 1,000 2,000 3,000

Geothermal

PP

Procurement ($/kW)

Cement

Steel

Construction

Real estate & Businessservice

ImportForeign Procurement (42%)

Domestic Procurement (58%)

Foreign Procurement (65%)

,

3,010 $/kW

geothermal PP procures moredomestic goods and servicesthan coal PP.

Therefore, construction effectof geothermal PP is larger thancoal PP.

Effect on EmploymentEffect on Production and Value added creation

51

181

73

104

25

166

49

94

22

0 50 100 150 200

Geothermal PP

Coal-fired PP

Investment / Effect (million US$)

Total Investment Domestic Procurement

Domestic Production Increase Effect Value Added Increase Effect

10,060

4,070

0 2,000 4,000 6,000 8,000 10,000 12,000

Geothermal PP

Coal-fired PP

Employment (person)

350

400

450

rson

)

Benefits in Construction Stage (2)

EnergySupply


0

50

100

150

200

250

300

2012 2013 2014 2015 2016

Year

Emp

loymen

t(1000pe

Geothermal advance case BAU case

Geothermal 400,000 psn

Coal-fired PP 240,000 psn

GeothermalDevelopment

EnvironmentalFriendly

EconomicGrowth &

Employment

52

, , , .

Geothermal development

Energy supply,

Environmental improvement, and

Economic growth & Employment creation.

Green New Deal by Geothermal Energy Development

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6. Conclusion

53

Messages of this Presentation Again

Geothermal energy has many values. But actual development isvery slow.

Conclusion

It is because there are two big barriers.

- Resource development risks

- Large up-front investment

Private companies are not willing to develop geothermal energy.

54

o overcome s, overnmen a o e ecomes cruc a .

Governmental incentive needs its costs.

But benefits of geothermal energy surpasses governmental costs.

Therefore, Governmental incentives will pay.

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Hoping Indonesias proactiveeothermal ener develo ment,

Thank you for your kind attention

55

Masahiko [email protected]

02_kaneko_[2012]

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