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Section 1 Geothermal energy in the context of energy in general and electric power supply, national and international aspects
C,eothermics, Vol. 14, No. 2/3, pp. 131 - 141, 1985.
0375 6505/85 $3.00 + 0.00 Pergamon Press Ltd. (~) 1985 CNR.
Printed in Great Britain.
UN Seminar on the Utilization of Geothermal Energy for Electric Power Production and Space Healing. Florence 1984
SECTION 1 G E O T H E R M A L ENERGY IN THE C O N T E X T OF ENERGY IN G E N E R A L A N D ELECTRIC P O W E R S U P P L Y . N A T I O N A L A N D I N T E R N A T I O N A L ASPECTS General Report prepared by E. Barbier, International Institute for Geothermal Research of the Italian National Research Council, appointed General Rapporteur by the Government of Italy R.101
INTRODUCTION This Section o f the UN S e m i n a r has two objectives: to assess the c o n t r i b u t i o n o f g e o t h e r m a l energy to the total w o r l d energy p r o d u c t i o n , especially electrical energy, a n d to describe the policies a d o p t e d by s o m e c o u n t r i e s in the d e v e l o p m e n t o f their g e o t h e r m a l resources. These two, s o m e w h a t general aspects, have been s u b d i v i d e d into five different themes, which also represent the five c h a p t e r s o f this general report. (1) W o r l d energy c o n s u m p t i o n . (2) G e o t h e r m a l c o n t r i b u t i o n to electricity g e n e r a t i o n . (3) N a t i o n a l policies in research a n d e x p l o i t a t i o n o f g e o t h e r m a l energy. (41 I n t e r n a t i o n a l c o - o p e r a t i o n . (5) Legal a n d i n s t i t u t i o n a l aspects o f the e x p l o i t a t i o n o f g e o t h e r m a l energy. The p a p e r s p r e s e n t e d in this Section deal with themes 3 a n d 4 only. In o r d e r to c o m p l e t e the present general r e p o r t , I m y s e l f have d r a w n s o m e i n f o r m a t i o n f r o m various sources a n d will discuss themes 1, 2 a n d 5, for which no p a p e r s have been s u b m i t t e d . 1. W O R L D E N E R G Y C O N S U M P T I O N T a b l e 1 shows the w o r l d energy c o n s u m p t i o n , expressed in p r i m a r y sources and oil equivalent tons ( O E T ) for the years 1962, 1972 a n d 1982. Table I. World energy consumption Million Oil Equivalent Tons
1962
1972
1982
Oil Coal Natural gas Hydro Nuclear Other
1275 1280 43(1 220 * 65+
2655 1410 980 315 40 65
2900 1775 1300 450 225 50
3270
5465
6700
Total
*Negligible. tlndustrial use of wood, geothermal energy, alcohol from biomass. Source: Shell Briefing Service (1983), Colombo (1983). 131
E. Barbier
132
This Table reveals a strong increase of 67% in energy c o n s u m p t i o n between 1962 and 1972, as opposed to the rapid deceleration between 1972 and 1982 to a 23°7o increase in consumption, as a consequence o f the 1973 energy crisis. Table 1 also clearly shows the reduction in the contribution of oil to the world's energy requirements during the period 1 9 7 2 - 1982 with respect to the preceding 10 years. The increase in oil c o n s u m p t i o n between 1972 and 1982 was, in fact, 9 % , as opposed to the 108% increase between 1962 and 1972. Note also that in 1962 oil represented 39°7o o f the total energy consumed, 49°70 in 1972 and 43% in 1982. This figure is still considered far beyond the economic possibilities o f m a n y countries. Table 2 analyses the total energy c o n s u m p t i o n (again in oil equivalent tons) for the industrialized and developing countries. It is interesting to note in this Table that: - - in 1962 the O E C D countries, together with the U.S.S.R. and Eastern Europe, c o n s u m e d 81°70 o f the total energy, and the developing countries only 19%; - - in 1972 this figure was 82%, as opposed to the 18°70 o f the developing countries; m in 1982 the industrialized countries c o n s u m e d 77%, and the developing countries 23%. Table 2. Total energy consumption by groups of countries Million Oil Equivalent Tons
1962
1972
1982
OECD countries*
2105
3445
3550
550
1060
1625
40 } 615 575
100 } 960 860
225 } 152'g 1300 -
3270
5465
6700
U.S.S.R. and Eastern Europe OPEC } Developing Others countries Total
*EEC, Austria, Finland, Iceland, Norway, Portugal, Spain, Sweden, Switzerland, Australia, Canada, Japan, New Zealand, Turkey, U.S.A., Yugoslavia. Source: Shell Briefing Service (1983)--modified. The greatest increase in the energy c o n s u m p t i o n o f the developing countries occurred, therefore, between 1972 and 1982. Table 3 shows the installed electric power t h r o u g h o u t the world in 1981. From this table we then obtain Table 4 which gives the total electrical installed power in 1981 divided between developed and developing countries. Considering electric c o n s u m p t i o n only, Table 4 shows that the developing countries c o n s u m e d 11 °7o o f all the electricity generated t h r o u g h o u t the world in 1981. This figure is lower than the 23°7o ascribed to these countries with reference to the total energy c o n s u m e d (Table 2). We can thus conclude that a lower percentage o f primary energy sources is converted to electricity in the developing countries.* 2. G E O T H E R M A L C O N T R I B U T I O N TO E L E C T R I C I T Y G E N E R A T I O N
2.1. The worm installed electrical power of geothermal origin, at the end o f 1982, is shown in Table 5, along with some very conservative estimates for 1986 and 1990. Figures were obtained directly f r o m the countries quoted in the table. *1 have compared the 1981 electricity data with the 1982 data for primary energy sources, as no electricity data were available for that year.
Contribution of Geothermal Energy in Worm Energy Production
133
T h e w o r l d g e o t h e r m a l e l e c t r i c p o w e r at t h e e n d o f 1982 w a s a b o u t 2800 M W ( 2 , 7 9 2 , 5 0 0 k W ) . By c o m p a r i s o n , t h e w o r l d e l e c t r i c a l p o w e r in 1981 w a s 1,910,000 M W ( T a b l e 3). G e o t h e r m a l energy thus represents 0 . 1 5 % o f the world electrical installed p o w e r . * Table 3. World electrical installed power in 1981 (megawatts) \\ eslern Europe Eastern Europe (excluding U.S.S.R.) I ;. S.S.R. Asia (excluding U.S.S.R. and Japan) Japan NorTh America (enlral America Sonlh America ,\frica (excluding South Africa) Soulh Africa Australia and Oceania
450,000 100,000 250,000 130,00(l 150,000 700,000 5,000 60,000 20,000 20,000 25,000 Total
1,910,000
Source: UN Economic Commission for Europe (1982). Table 4. World electrical installed power in 1981 (megawatts) Developed countries
Developing countries
Total
215,000
1,910,000
1,695,000
Table 5. Geothermal energy in the world: present status and future prospects. Electricity generation (megawatts) Country
Geothermal Electrical Installed Power 1982 1986 1990
Azores (Port.) Chile China El Salvador Ethiopia Greece Guatemala Iceland India Indonesia Italy Japan Kenya Mexico New Zealand Nicaragua Philippines Turkey U.S.A. U.S.S.R. West Indies (Fr.) Total
3
9
30 440 215 30 180 202 35 570 0.5 936 11
60 500 400 30 580 252 35 1100 5 1800 61 5
? 30 10 150 5 100 15 71 5 92 700 1400 30 1200 302 180 1300 ? 4370 71 5
4 95
7 95
2792.5
5004
10,036
3 41
71
Source: Barbier and Fanelli (1983). *I have again compared 1982 with 1981 data (total power), but the geothermal figures are so small, and the total power figures so large, that the percentage is not affected to any appreciable extent.
E. Barbier
134
This is obviously a very small figure and indicates that geothermal energy plays a very m i n o r role on the world energy scene. However, if we distinguish between industrialized and developing countries, then the c o n t r i b u t i o n of geothermal energy is clearly shown to be entirely different. In the industrialized countries, where the installed electric power reaches high figures (tens or even h u n d r e d s of t h o u s a n d s of MW), geothermal energy is unlikely, in the mid-term (10 years), to count for more than a few per cent, at the most, of the total. In the developing countries, with an as yet limited electrical c o n s u m p t i o n but good geothermal prospects, the electric energy of geothermal origin could, on the contrary, make quite a significant c o n t r i b u t i o n to the total. T a b l e 6 compares these tyro situations.
Fable 6 Total Electrical Installed Power (1981), MW* Industrialized countries Italy 48,000 .lapan 150,000 I .S.A. 652+000 De~eloping countries El Salvador 502 Nicaragua 370 Philippines 4,775 Kenya 541
Geothermal Electrical Inslalled Po~ser (1982), MW
"0 of lhc Total Installed Pov,er
440 215 936
0.9 0. I 0.1
95 35 57(t 30
18.9 9.5 11.9 5.5
*Source: UN Statistic Yearbook 1981 (1983).
2.2. With regard to the geothermal power-plants, a total of 121 units* were in o p e r a t i o n t h r o u g h o u t the world in 1982, each unit consisting of one t u r b i n e a n d an electric generator. Their size is given in Fig. 1. Figure 1 shows that 8007o of the units were smaller than 30 M W . The biggest, 135 M W , is installed in The Geysers field, in California. With regard to the type of unit, at the end of 1982, 46% were dry steam, 26% single flash, 13% dual flash a n d 9% multiple flash. Only 6% were binary cycles (Di Pippo, 1983).
2.3. Research in geothermal energy is being c o n d u c t e d all over the world. The effort expended in this sector varies from c o u n t r y to c o u n t r y , d e p e n d i n g on the financial resources and, at times, the political and social stability of each. T a b l e 5 gives some rather conservative estimates of the future geothermal electric power that will be installed by 1986 and possibly by 1990. The figures relative to 1986 are obviously much more reliable as we are dealing in this case, at a distance of only a few years, with k n o w n geothermal fields a n d plants already u n d e r c o n s t r u c t i o n . *Out of a total power of 2559 MW reported by Di Pippo (1983) for June 1982. This figure is lov,er than the po,.,~er calculated by Barbier and Fanelli for the end of that same year, shown in Table 5 (2792 NI~).
Contribution o f Geothermal Energy in World Energy Production No. 5
0
-<5 MW . . . . . . . 5-10 10-20
po
~ .......
~ .......
=========================
30-40
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50 = =
50-60
of
units
20
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20-30
40
15
135
25 ~ ....
30
35
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40 381
32
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60-70 70 - 8 0 80-90 90-i00 IO0-110
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IrO-I20 120-130
13o-r4o
==
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14o-p5o
Fig. I. Number of units in geothermal power-stations in the world (1982). Source: Di Pippo (1983).
3. N A T I O N A L P O L I C I E S IN R E S E A R C H A N D E X P L O I T A T I O N OF GEOTHERMAL ENERGY 3.1. At the moment there are at least 40 countries actively involved in geothermal energy exploration (Donovan, 1984, report R.84). The stage reached depends on the individual energy demand of each country, the degree to which it is able to meet the costs involved, and, finally, the credibility allotted the geothermal option by its decision-makers. So far 15 countries are exploiting their geothermal resources for electricity generation (Table 5), and 11 are using it in place of other more valuable heat sources in agriculture, domestic heating and industrial processes. Four of the reports submitted to this Seminar deal specifically with the theme of this chapter: R.52 (Italy), R.61 (Greece), R.68 (Spain) and R.30 (Djibouti). I wilt also discuss a fifth report, R.62 (U.S.A.), which, although it does not deal with US policy throughout the geothermal sector, does make an interesting economic analysis of electricity generation from hot dry rocks. l might also mention the paper R.72 (U.S.A.) which, with an enviable trust in the unlimited technological powers of the human race, proposes to exploit the molten m a g m a of the volcanoes to solve, once and for all, the world energy problem. 3.2. Geothermal activity in Italy is summarized in report R.52. It is c o m m o n knowledge that Italy was the first country to produce electrical energy from geothermal steam (at Larderello, in 1904). For some time now Italy has no longer been the main producer, and the report also reveals that Italy's undoubtedly large commitment in this sector is still barely capable of compensating for the depletion of its geothermal fields. We must not forget that Larderello has been producing on an industrial basis since 1913. In 1983 about 3450 t/h of steam were available in Italy, compared to the 3400 of 1975. Energy production has nevertheless increased as a result of plant modernization and the consequent increase in efficiency.
136
E. Barbier
According to the report, the maximum total production that can realistically be expected in future is about 1000 MW for 50 years of operation. The paper retains that this figure could be approached according to the National Energy Plan, which foresees an increase of 250 MW in the present installed power to a total of about 700 MW by 1990. Geothermal energy exploration began in Greece in 1970, according to report R.61, and wel steam reservoirs have already been identified on the islands of Milos and Nisyros, in the Aegean Sea. Production tests on Milos show that 24 MW could be installed, using the existing five wells, and indicate a maximum potential of about 100 MW for this island. The first exploratory well on Nisyros verified the existence of a deep, high salinity reservoir (100 g/l at 1500 m), wil h temperatures around 350°C. Other areas also seem promising in Greece, and are now under study. The report is confident that by the end of 1984a 1 . 5 4.0 MW power plant should be operating on Milos; as the energy demand on the island is no higher than 4 MW, the excess energy produced in future will be transmitted by underwater cable to the mainland and nearby islands. Geothermal development and the underwater transmission system should both be completed by 1992. According to present estimates, Greece could have an installed geothermal power of about 100 MW by 1992. The geothermal prospects of another European country, Spain, are also interesting. Report R.68 describes research activity in this country that has identified some lo,a enthalpy fields. The Spanish National Energy Plan, launched in 1978, has grasped the importance of assessing the geothermal potential of the country and so created the National Program for Geothermal Research. Spain had, however, already shown some interest in geothermal energy in the early 1970s and in 1975 the Geological & Mining Institute compiled a National Inventory of Geothermal Phenomena, which was used as a data base for planning and developing all subsequent research work. The National Geothermal Program mentioned in the Spanish report is funded by the Mate with the equivalent of about 81 million dollars for the period 1981 1990, i.e. about 8million US dollars per year. According to the report Spain also has some high enthalpy resources, sited in t~o zones on the Canary Islands (Lanzarote and La Palma). Temperatures of 300°C ~ere meast, red there at shallow depths, and the areas could be developed as hot dry rock projecls. 3.3. The economic aspects of exploiting geothermal energy are the main topics dealt with in another two reports. Both try to assess the cost of the geothermal kWh and, thus, to verifx the viability of a project, but starting from two entirely different situations: "traditional" exploitation of a steam field in the Republic of Djibouti, described in report R.30, and "futuristic" exploitation of a hot dr3.' rocks area in report R.62 from the U.S,A. Recent studies in Djibouti, on the Red Sea, have confirmed that geothermal steam could be recovered in sufficient quantities to meet most of the electricity demand of this small Republic. At the moment Djibouti has an installed electric power of 37 M\V, run on diesel generators. Estimates of the future development of this country indicate that a further 45 r\l\'~' ~ill be required by the end of 1985, but that this would suffice until 1987, at v, hich point the installed power would have to increase yet again. The geothermal option is considered as a means of supplying the 20 M\V base load, \vith diesel kept for peak power. The study shows that the 20 MW geothermal at Djibouti could lead to an annual effective savings of 3.7 or 6.7 million US dollars, depending on the assumed cost of diesel fuel. The cost of the geothermal kWh could vary bet~veen a minimutn of 9.6 [.'S cents, assuming an interest rate of 10%, and a maximum of 12.6 US cents, at an interest rate of 15~J,. The maximum cost coincides with the cost of the diesel k~'h, assuming this fuel increases b~ no
Contribution of Geothermal Energy in Worm Energy Production
137
more than 2% p.a. Clearly the cost of geothermal production increases rapidly with the interest rate, to the detriment of geothermal projects which require initial high capital costs. Geothermics of the future, perhaps even of the near future, can be envisaged when reading report R.62 from the U.S.A., which deals with the economics of a conceptual 75 MW hot dry rock geothermal electric power-station. The report comes from Los Alamos National Kaboratory, which has been experimenting with hot dry rocks for more than 10 years. So far they have produced a maximum of 5 MW, of thermal energy, and the artificial reservoir has been exploited for almost a year with a temperature drop of less than 10°C. Electricity has also been generated with a small 60 kWh+ unit, using a binary cycle. The main conclusions reached in this experiment, according to the report, are: - - resistance to flow was low enough so that the power required to pump the water through the fractures and wells was only a small fraction of the thermal power extracted from the rock; - - rate of water loss due to permeation of the rock surrounding the fractures was approximately 10% of that circulated through the fractures. Assuming a 75 MW,. powerplant, 125 m3/h of water is expected to be lost throughout plant lifetime; quality of water circulated through the reservoir was good, with a pH of 6.5 and a total dissolved solids content of 3000 ppm; seismic activity was negligible. In order to evaluate the economic viability of future H D R electric power-stations, report R.62 describes how an economic modelling study was conducted for a conceptual 75 MW+ generating station operating in conditions similar to those prevailing on the New Mexico site. In this model the reservoir producing the 75 MW~ (equal to 550 MW,) is operated by at least nine wells (production + injection) of 4.3 km depth, and the temperature of the water produced is about 230°C. O p t i m u m electricity generation will occur with a binary cycle, and the report recommends four fluids for this purpose, one of which is isobutane. The economic conclusions reached in this report include the hypothesis, based on the results of the model, that a 75 MW+ H D R generating station can sell electricity at the bus bar for 4.9 US ~/kWh. According to the report this is a highly competitive price, compared to the 6.3 for oil-fired steam, and 7.6 C/kWh for diesel-electric. Only coal and nuclear stations, at 3.4 and 3.6 ~/kWh, are expected to be cheaper than H D R stations, but their position is expected to deteriorate with further fuel price increases. The estimated sale price of 4.9 ~/kWh (1983) for electricity at the bus bar of an H D R station would be much cheaper than the cost of generating a traditional geothermal kWh. In a recent report from Japan, Kaneko (1983) states that the cost of geothermal power production in the Japanese power-stations is about 20 y e n / k W h , i.e. about 8.8 US ~/kWh. The author concludes that this figure is about the same as that for hydraulic power and oil-fired power stations in Japan. Quite similar costs are quoted in report R.77 for the kWh that will be produced in the French geothermal power-station at Bouillante in Guadaloupe (4.2 MW). The report estimates that if the plant operates for 7000 h / y r the cost will be 8.4 US C/kWh, increasing to 11.8 C/kWh if it operates only 5000 h/yr. At this point I feel it is worth remembering that calculation of the cost of a geothermal kWh is an extremely subjective operation, depending on the weight given to the many parameters involved. Despite many attempts at standardization--the point was first debated during the UN Geothermal Congress in Pisa in 1970--cost comparisons using values provided by different countries should be regarded with some caution. -
-
-
-
3.4. In some countries, where geothermal energy is already being successfully exploited, the government provides an economic incentive to private enterprise embarking on geothermal
138
f . Barbier
projects. These incentives are mainly related to the direct use of heat, as electricity generation is nearly always the prerogative of public utilities. France's objective, for example, is to save about 1 million Oil Equivalent Tons by 1990, using low temperature geothermal fluids (compared to the 50,000 OET saved in 1982). This does seem to be an ambitions project, but France has so far invested heavily in this sector. Fast and effective financing and incentives are of crucial importance in achieving the set objectives. According to the French experts, the geothermal operator can now rely on the following extremely effective forms of financial support: - - government grant for the geothermal feasibility study, covering up to 50% of costs; - - government grant for 20% of the cost of the first well; a further 70% is added where tile well proves sterile. Local administrations may provide further aid; - - mid- and long-term coverage of the risks inherent to exploitation. These subsidies are integrated with special loans covering as much as 80% of tile capital costs of the geothermal project. Despite the fact that no geothermal legislation yet exists in Italy, some government subsidies are awarded to non-electric operators in certain circumstances. The Italian reports R.15 and R.53 decribe the Italian situation with regard to the uses of low enthalpy geothermal fluids, and specifically mention these circumstances. The three major district heating projects using hot x,,aters (Vicenza, Ferrara and Cesano) all receive government aid through the 1982 Act of Parliament, No. 308. 4. I N T E R N A T I O N A L C O - O P E R A T I O N Until the late 1950s Italy was the only country to generate electricity from geothermal energy, so that many of the countries interested in developing their geothermal resources naturally turned to Italy for information and counselling. At the beginning this international cooperation obviously centered on Italian scientific and technological experience, but was soon widened to encompass the large contribution made by other countries, especially New Zealand, to understanding the geothermal phenomenon. Italian activity has, however, continued intensely right up until the present day, and not only in the form of technical assistance but also through direct contact with foreign scientific institutions, organization of international seminars, and training experts for the developing countries. This activity is described in detail in the Italian report R.13. The United Nations were also quick to recognize the potential of geothermal energy in the industrialization of many developing countries. Thus, about 20 years ago, the UN launched some technical and financial aid programs directed at developing the geothermal resources of the Third World. Report R.84 describes one of the UN programs in the geothermai sector: the Revolving Fund for Natural Resources Exploration. The Fund is active in mineral exploration projects and has now begun geothermal exploration projects. It is now concentrating on exploratory drilling projects. The Fund finances a project totally right up to the discovery stage, in return for a small replenishment based on successful production; this concept, according to the report, has been welcomed and accepted almost universally by potential recipient countries. The ten country members of the European Economic Community are also actively involved in coordinated geothermal development. Apart from promoting geothermal energy research since 1975 (for electric and direct heat uses), the EEC has also begun financing the so-called demonstration projects, which are described in some detail in report R.21. For the European Community a demonstration project is one that has already passed through the research stage, but is held back by technical and economic problems. It must be on an industrial scale and be proved economically viable. Community aid is imperative because the
Contribution of Geothermal Energy in Worm Energy Production
139
financial risk is still too large for the individual entrepreneur. The Community provides financial aid to projects for exploiting geothermal fluids for district heating, agriculture and industrial processes, and for electricity generation. These allocations represent only a minor percentage of the total capital cost of the project, and generally never exceed 49% of the cost of the entire project. One half of the Community contribution must be paid back in a m a x i m u m of 8 years if the resource is successfully exploited. This Community aid has had a key role in promoting geothermal activity in many EEC countries; it is well known that the major drawbacks in developing geothermal energy are the high capital costs and the financial risks related to sterile or low producing wells. Any new activity is inevitably regarded with some suspicion and a certain reluctance to make the first move, but another factor that discourages the geothermal operator is the time lapse between deciding to invest and the achievement of some results. One can thus appreciate their reluctance to invest in many cases, and recommend that public funds be used to stimulate and subsidize this type of activity, at least until it takes off. 5. L E G A L A N D I N S T I T U T I O N A L A S P E C T S OF T H E E X P L O I T A T I O N OF GEOTHERMAL ENERGY No reports were submitted on the above topics, but I feel it does warrant a few comments in view of its importance for the future development of geothermal energy. Geothermal energy is usually considered a natural resource, and as such is subject to governmental control and legislation. These are aimed at preventing any damage to the environment resulting from exploitation of the reserves, at protecting the property rights of the individual, and at promoting a rational and economic development of the resource for the benefit of the community. As far as I know, the countries with a specific geothermal legislation are: Iceland, United States, Canada, Philippines, France and New Zealand. The 1968 Energy Act in Iceland incorporates the 1940 Act on the Right of Ownership and Use of Geothermal Resources. According to Article 9 of the Energy Act " . . . every unit of landed property carries with it the right to possess and exploit geothermal heat from the p r o p e r t y . . . " . Nevertheless, under Article 14 the Government is granted a general right to expropriate geothermal heat in the public interest (Torfason, 1975). The National Energy Authority has been established as the State Agency responsible for carrying out the national interest in the exploration of geothermal resources. Whereas electricity generation is a state-run operation, geothermal district heating, which is used by 80% of the population of Reykjavik, is run by the town alone. The 1968 Energy Act states, in fact, that the development of geothermal resources for community space-heating should be entrusted to the municipalities. In the United States the Geothermal Steam Act was passed in 1970 in order to regulate geothermal activity on federally owned land. The individual States are the regulators in nonfederal areas, so that there are a variety of approaches to the regulatory problems of geothermal activity in this country. California was the first to establish detailed regulations and many of the other states have modelled their approach more or less after the California example. Environmental laws have generated a new, and often complex, set of regulations, but according to some experts this is not a satisfactory solution, as the laws of the United States and of the various states have inhibited the rapid development of geothermal energy (Aidlin, 1975). This author also emphasizes that " . . . so far in the United States, our Governmental institutions have been too slow in establishing criteria and accepting concepts applicable to geothermal resources. We have been so fearful of general imaginary and exaggerated dangers or detriments that we have
140
E. B a r b i e r
imposed c o n d i t i o n s a n d restraints on development of geothermal resources before we have allowed ourselves to ascertain whether such dangers or detriments may o c c u r . . . " . In New Z e a l a n d j u r i s d i c t i o n over geothermal resources is vested in the n a t i o n a l g o v e r n m e n t u n d e r the G e o t h e r m a l Steam Act of 1953. The Act relates to all energy derived from the E a r t h ' s n a t u r a l heat, excluding water at temperatures up to 70°C. This interpretation has proved to be satisfactory in a c o u n t r y where well temperatures have been measured up to 300°C, where it was c o n v e n i e n t to exclude from unnecessary control those areas whose lower temperatures rendered them safe from h y d r o t h e r m a l eruptions (Dench, 1975). According to this a u t h o r the existing legislation in New Z e a l a n d provides a comprehensive framework for the d e v e l o p m e n t of her geothermal assets. The G e o t h e r m a l Steam Act, in particular, emphasizes safe practices without i m p o s i n g unnecessary restraints or a d m i n i s t r a t i v e work on small-scale domestic use. A totally different situation, therefore, from that in the United States! The Philippines are a relatively y o u n g geothermal c o u n t r y with a strong c o m m i t m e n t in this sector. Law 5092 was passed in 1967 to regulate geothermal energy and its exploitation. The resource is considered i n d e p e n d e n t l y of oil and minerals, as both steam and hot waters, and its m a n a g e m e n t is entrusted to the Director of Mines, in the n a t i o n a l interest (Alcaraz, 1975). D u r i n g the last 10 years France has shown an increasing interest in the geothermal resource, a n d especially in the hot waters of the Paris and A q u i t a i n e basins. The g o v e r n m e n t quickly rationalized activity in the sector, a n d created the Comit6 T e c h n i q u e de G e o t h e r m i e in 1982, inside the Agence Fran~:aise p o u r la Maitrise de l'Energie. This Agency is also responsible for s t i m u l a t i n g the interest of local a d m i n i s t r a t i o n s in geothermal d e v e l o p m e n t , a n d for setting up with the latter j o i n t ventures for geothermal exploitation a n d m a n a g e m e n t . Finally, C a n a d a passed a G e o t h e r m a l Resources Act as far back as 1973 (Jessop, 1975), yet this c o u n t r y has still no geothermal objectives. Much to my regret I must admit as an Italian that my c o u n t r y , despite its having been the first to exploit geothermal energy on an industrial scale, has still no regulations specific to this sector; there is no legislation defining the role of the n a t i o n a l and local g o v e r n m e n t s , their relationship with one a n o t h e r and with the energy agencies of the c o u n t r y (Fanucci, 1983).
REFERENCES Aidlin, J. W. (1975) United States law as it affects geothermal developmenl. 2nd U,\ .S).'mp. on the Development and Use o f Geothermal Resources, San Francisco, pp. 2353 2357. Alcaraz, A. (1975) In: Present Status and Future Prospects For Non-electrical Uses q]' Geothermal Resources (Edited by Howard, J. H.), pp. 97 and 98. Lawrence kivermore Lab., UCRL-51926. Barbier, E. and Fanelli, M. (1983) International Institute for Geothermal Research, Pisa, Italy. CoIombo, U. (1983) Energy: industrial competition and technological development (in Italian). ENEA News Bulletin, October, Rome, pp. 10 30. Dench, N. D. (1975) The law and geothermal development in New Zealand. 2nd UN Synlp. on the Development and Use o f Geothermal Resources, San Francisco, pp. 2359 2362. Di Pippo, R. (1983) Overview of worldwide geothermal power development. Bull. Geothermal Re.s. Council May, U.S.A., pp. 3 9. }-anucci, O. (1983) Regulatory and legal considerations on geothermal energy in Italy tin Italian). kner,~ie alternative 22, 105-- 110. Jessop, A. M. (1975) In: Present Status and f-uture Prospects For Non-electrical Uses (~l'Geothermal Resource.s (Edited by Howard, J. H.), pp. 94 95. Lawrence Livermore Lab., UCRL-51926. Kaneko, M. (1983) National outlook in Ja'pan for geothermal energy developmenl. Ministry of International frade and Industry, Tokyo. Torfason, H. (1975) The law of Iceland as it affects geolhermal developmenl. 2rid U,'~ .~Vnlfl. on the Development and Use o f Geothermal Resources, San Francisco, pp. 2435 2437. Shell Briefing Service (1983) Energy in Profile, No. 5, l.ondon. UN Economic Commission for Europe (1982) Seminar on the medium-term and long-term prospects for the electric power industry. Ershevich, V. V., General Report. UN Statistic Yearbook 1981 (1983) United Nations, New York.
Contribution of Geothermal Energy in Worm Energy Production
141
LIST OF REPORTS EP/SEM.9/R.13
Outline o f ENEL international activity in the geothermal sector. R. Cataldi (Italy) (E).
EP/SEM.9/R.15
Non-electric uses o f the geothermal resource: economic considerations. G. Trambaioli (Italy) (E).
EP/SEM.9/R.21
The demonstration projects o f the European Communities in the fieM of geothermal energy. G. Gerini (EEC Brussels) (F).
EP/SEM.9/R.30
Technical-economic studies o f geothermal projects: the Djibouti case. A. Abdallah, A. Gandino and C. Sommaruga (Italy) (F).
EP S E M . 9 / R . 5 2
Geothermal activity in Italy: present status and future prospects. R. Carella, G. Verdiani, C. G. Palmerini and G. C.-Stefani (Italy) (E).
EP 'SEM.9/R.53
Industrial non-electric uses of geothermal fluids. M. Brianza, M. Guglielminetli, G. l nvernizzi and C. Sommaruga (Italy) (E).
FP SEM.9/R.61
Research and development of geothermal resources in Greece. Present status and J~aure prospects. F. Vrouzi (Greece) (E).
EP/SEM.9/R.62
Economics o f a conceptual 75 M g ' hot dry rock geothermal electric power-station. H. Murphy, R. Drake, J. Tester and G. Zyvoloski (U.S.A.) (E).
EP/SEM.9/R.68
Geothermal energy in the Spanish energy plan: present status o1 the most advanced prg/ects. J. Abad Fernandez and J. Sa.nchez Guzm~.n (Spain) (E).
EP/SEM.9/R.72
Magma-paradox and electric power. R. J. Varney (U.S.A.) (E).
EP/SEM.9/R.77
The BouHlante geothermal power-plant, Guadeloupe. P. Jaud and D. Lain+the (France) (F).
EP'SEM.9/R.84
The status of high enthalpy geothermal exploration in the developing countries. P. R. Dono~an (United Nations Revolving Fnnd for Natural Resources Exploration) (E).
(E) IF)
Original in English Original in French.
G. Calabro and
0375 6505/85 $3.00 + 0.00 Pergamon Press Ltd. (~) 1985 CNR.
Printed in Great Britain.
UN Seminar on the Utilization of Geothermal Energy for Electric Power Production and Space Healing. Florence 1984
SECTION 1 G E O T H E R M A L ENERGY IN THE C O N T E X T OF ENERGY IN G E N E R A L A N D ELECTRIC P O W E R S U P P L Y . N A T I O N A L A N D I N T E R N A T I O N A L ASPECTS General Report prepared by E. Barbier, International Institute for Geothermal Research of the Italian National Research Council, appointed General Rapporteur by the Government of Italy R.101
INTRODUCTION This Section o f the UN S e m i n a r has two objectives: to assess the c o n t r i b u t i o n o f g e o t h e r m a l energy to the total w o r l d energy p r o d u c t i o n , especially electrical energy, a n d to describe the policies a d o p t e d by s o m e c o u n t r i e s in the d e v e l o p m e n t o f their g e o t h e r m a l resources. These two, s o m e w h a t general aspects, have been s u b d i v i d e d into five different themes, which also represent the five c h a p t e r s o f this general report. (1) W o r l d energy c o n s u m p t i o n . (2) G e o t h e r m a l c o n t r i b u t i o n to electricity g e n e r a t i o n . (3) N a t i o n a l policies in research a n d e x p l o i t a t i o n o f g e o t h e r m a l energy. (41 I n t e r n a t i o n a l c o - o p e r a t i o n . (5) Legal a n d i n s t i t u t i o n a l aspects o f the e x p l o i t a t i o n o f g e o t h e r m a l energy. The p a p e r s p r e s e n t e d in this Section deal with themes 3 a n d 4 only. In o r d e r to c o m p l e t e the present general r e p o r t , I m y s e l f have d r a w n s o m e i n f o r m a t i o n f r o m various sources a n d will discuss themes 1, 2 a n d 5, for which no p a p e r s have been s u b m i t t e d . 1. W O R L D E N E R G Y C O N S U M P T I O N T a b l e 1 shows the w o r l d energy c o n s u m p t i o n , expressed in p r i m a r y sources and oil equivalent tons ( O E T ) for the years 1962, 1972 a n d 1982. Table I. World energy consumption Million Oil Equivalent Tons
1962
1972
1982
Oil Coal Natural gas Hydro Nuclear Other
1275 1280 43(1 220 * 65+
2655 1410 980 315 40 65
2900 1775 1300 450 225 50
3270
5465
6700
Total
*Negligible. tlndustrial use of wood, geothermal energy, alcohol from biomass. Source: Shell Briefing Service (1983), Colombo (1983). 131
E. Barbier
132
This Table reveals a strong increase of 67% in energy c o n s u m p t i o n between 1962 and 1972, as opposed to the rapid deceleration between 1972 and 1982 to a 23°7o increase in consumption, as a consequence o f the 1973 energy crisis. Table 1 also clearly shows the reduction in the contribution of oil to the world's energy requirements during the period 1 9 7 2 - 1982 with respect to the preceding 10 years. The increase in oil c o n s u m p t i o n between 1972 and 1982 was, in fact, 9 % , as opposed to the 108% increase between 1962 and 1972. Note also that in 1962 oil represented 39°7o o f the total energy consumed, 49°70 in 1972 and 43% in 1982. This figure is still considered far beyond the economic possibilities o f m a n y countries. Table 2 analyses the total energy c o n s u m p t i o n (again in oil equivalent tons) for the industrialized and developing countries. It is interesting to note in this Table that: - - in 1962 the O E C D countries, together with the U.S.S.R. and Eastern Europe, c o n s u m e d 81°70 o f the total energy, and the developing countries only 19%; - - in 1972 this figure was 82%, as opposed to the 18°70 o f the developing countries; m in 1982 the industrialized countries c o n s u m e d 77%, and the developing countries 23%. Table 2. Total energy consumption by groups of countries Million Oil Equivalent Tons
1962
1972
1982
OECD countries*
2105
3445
3550
550
1060
1625
40 } 615 575
100 } 960 860
225 } 152'g 1300 -
3270
5465
6700
U.S.S.R. and Eastern Europe OPEC } Developing Others countries Total
*EEC, Austria, Finland, Iceland, Norway, Portugal, Spain, Sweden, Switzerland, Australia, Canada, Japan, New Zealand, Turkey, U.S.A., Yugoslavia. Source: Shell Briefing Service (1983)--modified. The greatest increase in the energy c o n s u m p t i o n o f the developing countries occurred, therefore, between 1972 and 1982. Table 3 shows the installed electric power t h r o u g h o u t the world in 1981. From this table we then obtain Table 4 which gives the total electrical installed power in 1981 divided between developed and developing countries. Considering electric c o n s u m p t i o n only, Table 4 shows that the developing countries c o n s u m e d 11 °7o o f all the electricity generated t h r o u g h o u t the world in 1981. This figure is lower than the 23°7o ascribed to these countries with reference to the total energy c o n s u m e d (Table 2). We can thus conclude that a lower percentage o f primary energy sources is converted to electricity in the developing countries.* 2. G E O T H E R M A L C O N T R I B U T I O N TO E L E C T R I C I T Y G E N E R A T I O N
2.1. The worm installed electrical power of geothermal origin, at the end o f 1982, is shown in Table 5, along with some very conservative estimates for 1986 and 1990. Figures were obtained directly f r o m the countries quoted in the table. *1 have compared the 1981 electricity data with the 1982 data for primary energy sources, as no electricity data were available for that year.
Contribution of Geothermal Energy in Worm Energy Production
133
T h e w o r l d g e o t h e r m a l e l e c t r i c p o w e r at t h e e n d o f 1982 w a s a b o u t 2800 M W ( 2 , 7 9 2 , 5 0 0 k W ) . By c o m p a r i s o n , t h e w o r l d e l e c t r i c a l p o w e r in 1981 w a s 1,910,000 M W ( T a b l e 3). G e o t h e r m a l energy thus represents 0 . 1 5 % o f the world electrical installed p o w e r . * Table 3. World electrical installed power in 1981 (megawatts) \\ eslern Europe Eastern Europe (excluding U.S.S.R.) I ;. S.S.R. Asia (excluding U.S.S.R. and Japan) Japan NorTh America (enlral America Sonlh America ,\frica (excluding South Africa) Soulh Africa Australia and Oceania
450,000 100,000 250,000 130,00(l 150,000 700,000 5,000 60,000 20,000 20,000 25,000 Total
1,910,000
Source: UN Economic Commission for Europe (1982). Table 4. World electrical installed power in 1981 (megawatts) Developed countries
Developing countries
Total
215,000
1,910,000
1,695,000
Table 5. Geothermal energy in the world: present status and future prospects. Electricity generation (megawatts) Country
Geothermal Electrical Installed Power 1982 1986 1990
Azores (Port.) Chile China El Salvador Ethiopia Greece Guatemala Iceland India Indonesia Italy Japan Kenya Mexico New Zealand Nicaragua Philippines Turkey U.S.A. U.S.S.R. West Indies (Fr.) Total
3
9
30 440 215 30 180 202 35 570 0.5 936 11
60 500 400 30 580 252 35 1100 5 1800 61 5
? 30 10 150 5 100 15 71 5 92 700 1400 30 1200 302 180 1300 ? 4370 71 5
4 95
7 95
2792.5
5004
10,036
3 41
71
Source: Barbier and Fanelli (1983). *I have again compared 1982 with 1981 data (total power), but the geothermal figures are so small, and the total power figures so large, that the percentage is not affected to any appreciable extent.
E. Barbier
134
This is obviously a very small figure and indicates that geothermal energy plays a very m i n o r role on the world energy scene. However, if we distinguish between industrialized and developing countries, then the c o n t r i b u t i o n of geothermal energy is clearly shown to be entirely different. In the industrialized countries, where the installed electric power reaches high figures (tens or even h u n d r e d s of t h o u s a n d s of MW), geothermal energy is unlikely, in the mid-term (10 years), to count for more than a few per cent, at the most, of the total. In the developing countries, with an as yet limited electrical c o n s u m p t i o n but good geothermal prospects, the electric energy of geothermal origin could, on the contrary, make quite a significant c o n t r i b u t i o n to the total. T a b l e 6 compares these tyro situations.
Fable 6 Total Electrical Installed Power (1981), MW* Industrialized countries Italy 48,000 .lapan 150,000 I .S.A. 652+000 De~eloping countries El Salvador 502 Nicaragua 370 Philippines 4,775 Kenya 541
Geothermal Electrical Inslalled Po~ser (1982), MW
"0 of lhc Total Installed Pov,er
440 215 936
0.9 0. I 0.1
95 35 57(t 30
18.9 9.5 11.9 5.5
*Source: UN Statistic Yearbook 1981 (1983).
2.2. With regard to the geothermal power-plants, a total of 121 units* were in o p e r a t i o n t h r o u g h o u t the world in 1982, each unit consisting of one t u r b i n e a n d an electric generator. Their size is given in Fig. 1. Figure 1 shows that 8007o of the units were smaller than 30 M W . The biggest, 135 M W , is installed in The Geysers field, in California. With regard to the type of unit, at the end of 1982, 46% were dry steam, 26% single flash, 13% dual flash a n d 9% multiple flash. Only 6% were binary cycles (Di Pippo, 1983).
2.3. Research in geothermal energy is being c o n d u c t e d all over the world. The effort expended in this sector varies from c o u n t r y to c o u n t r y , d e p e n d i n g on the financial resources and, at times, the political and social stability of each. T a b l e 5 gives some rather conservative estimates of the future geothermal electric power that will be installed by 1986 and possibly by 1990. The figures relative to 1986 are obviously much more reliable as we are dealing in this case, at a distance of only a few years, with k n o w n geothermal fields a n d plants already u n d e r c o n s t r u c t i o n . *Out of a total power of 2559 MW reported by Di Pippo (1983) for June 1982. This figure is lov,er than the po,.,~er calculated by Barbier and Fanelli for the end of that same year, shown in Table 5 (2792 NI~).
Contribution o f Geothermal Energy in World Energy Production No. 5
0
-<5 MW . . . . . . . 5-10 10-20
po
~ .......
~ .......
=========================
30-40
=======
50 = =
50-60
of
units
20
~ .......
~ .......
===========~ 9 =================================================
20-30
40
15
135
25 ~ ....
30
35
===~ .......
~====
40 381
32
J6
5
I
=========================
[6
60-70 70 - 8 0 80-90 90-i00 IO0-110
==== 3
IrO-I20 120-130
13o-r4o
==
I
14o-p5o
Fig. I. Number of units in geothermal power-stations in the world (1982). Source: Di Pippo (1983).
3. N A T I O N A L P O L I C I E S IN R E S E A R C H A N D E X P L O I T A T I O N OF GEOTHERMAL ENERGY 3.1. At the moment there are at least 40 countries actively involved in geothermal energy exploration (Donovan, 1984, report R.84). The stage reached depends on the individual energy demand of each country, the degree to which it is able to meet the costs involved, and, finally, the credibility allotted the geothermal option by its decision-makers. So far 15 countries are exploiting their geothermal resources for electricity generation (Table 5), and 11 are using it in place of other more valuable heat sources in agriculture, domestic heating and industrial processes. Four of the reports submitted to this Seminar deal specifically with the theme of this chapter: R.52 (Italy), R.61 (Greece), R.68 (Spain) and R.30 (Djibouti). I wilt also discuss a fifth report, R.62 (U.S.A.), which, although it does not deal with US policy throughout the geothermal sector, does make an interesting economic analysis of electricity generation from hot dry rocks. l might also mention the paper R.72 (U.S.A.) which, with an enviable trust in the unlimited technological powers of the human race, proposes to exploit the molten m a g m a of the volcanoes to solve, once and for all, the world energy problem. 3.2. Geothermal activity in Italy is summarized in report R.52. It is c o m m o n knowledge that Italy was the first country to produce electrical energy from geothermal steam (at Larderello, in 1904). For some time now Italy has no longer been the main producer, and the report also reveals that Italy's undoubtedly large commitment in this sector is still barely capable of compensating for the depletion of its geothermal fields. We must not forget that Larderello has been producing on an industrial basis since 1913. In 1983 about 3450 t/h of steam were available in Italy, compared to the 3400 of 1975. Energy production has nevertheless increased as a result of plant modernization and the consequent increase in efficiency.
136
E. Barbier
According to the report, the maximum total production that can realistically be expected in future is about 1000 MW for 50 years of operation. The paper retains that this figure could be approached according to the National Energy Plan, which foresees an increase of 250 MW in the present installed power to a total of about 700 MW by 1990. Geothermal energy exploration began in Greece in 1970, according to report R.61, and wel steam reservoirs have already been identified on the islands of Milos and Nisyros, in the Aegean Sea. Production tests on Milos show that 24 MW could be installed, using the existing five wells, and indicate a maximum potential of about 100 MW for this island. The first exploratory well on Nisyros verified the existence of a deep, high salinity reservoir (100 g/l at 1500 m), wil h temperatures around 350°C. Other areas also seem promising in Greece, and are now under study. The report is confident that by the end of 1984a 1 . 5 4.0 MW power plant should be operating on Milos; as the energy demand on the island is no higher than 4 MW, the excess energy produced in future will be transmitted by underwater cable to the mainland and nearby islands. Geothermal development and the underwater transmission system should both be completed by 1992. According to present estimates, Greece could have an installed geothermal power of about 100 MW by 1992. The geothermal prospects of another European country, Spain, are also interesting. Report R.68 describes research activity in this country that has identified some lo,a enthalpy fields. The Spanish National Energy Plan, launched in 1978, has grasped the importance of assessing the geothermal potential of the country and so created the National Program for Geothermal Research. Spain had, however, already shown some interest in geothermal energy in the early 1970s and in 1975 the Geological & Mining Institute compiled a National Inventory of Geothermal Phenomena, which was used as a data base for planning and developing all subsequent research work. The National Geothermal Program mentioned in the Spanish report is funded by the Mate with the equivalent of about 81 million dollars for the period 1981 1990, i.e. about 8million US dollars per year. According to the report Spain also has some high enthalpy resources, sited in t~o zones on the Canary Islands (Lanzarote and La Palma). Temperatures of 300°C ~ere meast, red there at shallow depths, and the areas could be developed as hot dry rock projecls. 3.3. The economic aspects of exploiting geothermal energy are the main topics dealt with in another two reports. Both try to assess the cost of the geothermal kWh and, thus, to verifx the viability of a project, but starting from two entirely different situations: "traditional" exploitation of a steam field in the Republic of Djibouti, described in report R.30, and "futuristic" exploitation of a hot dr3.' rocks area in report R.62 from the U.S,A. Recent studies in Djibouti, on the Red Sea, have confirmed that geothermal steam could be recovered in sufficient quantities to meet most of the electricity demand of this small Republic. At the moment Djibouti has an installed electric power of 37 M\V, run on diesel generators. Estimates of the future development of this country indicate that a further 45 r\l\'~' ~ill be required by the end of 1985, but that this would suffice until 1987, at v, hich point the installed power would have to increase yet again. The geothermal option is considered as a means of supplying the 20 M\V base load, \vith diesel kept for peak power. The study shows that the 20 MW geothermal at Djibouti could lead to an annual effective savings of 3.7 or 6.7 million US dollars, depending on the assumed cost of diesel fuel. The cost of the geothermal kWh could vary bet~veen a minimutn of 9.6 [.'S cents, assuming an interest rate of 10%, and a maximum of 12.6 US cents, at an interest rate of 15~J,. The maximum cost coincides with the cost of the diesel k~'h, assuming this fuel increases b~ no
Contribution of Geothermal Energy in Worm Energy Production
137
more than 2% p.a. Clearly the cost of geothermal production increases rapidly with the interest rate, to the detriment of geothermal projects which require initial high capital costs. Geothermics of the future, perhaps even of the near future, can be envisaged when reading report R.62 from the U.S.A., which deals with the economics of a conceptual 75 MW hot dry rock geothermal electric power-station. The report comes from Los Alamos National Kaboratory, which has been experimenting with hot dry rocks for more than 10 years. So far they have produced a maximum of 5 MW, of thermal energy, and the artificial reservoir has been exploited for almost a year with a temperature drop of less than 10°C. Electricity has also been generated with a small 60 kWh+ unit, using a binary cycle. The main conclusions reached in this experiment, according to the report, are: - - resistance to flow was low enough so that the power required to pump the water through the fractures and wells was only a small fraction of the thermal power extracted from the rock; - - rate of water loss due to permeation of the rock surrounding the fractures was approximately 10% of that circulated through the fractures. Assuming a 75 MW,. powerplant, 125 m3/h of water is expected to be lost throughout plant lifetime; quality of water circulated through the reservoir was good, with a pH of 6.5 and a total dissolved solids content of 3000 ppm; seismic activity was negligible. In order to evaluate the economic viability of future H D R electric power-stations, report R.62 describes how an economic modelling study was conducted for a conceptual 75 MW+ generating station operating in conditions similar to those prevailing on the New Mexico site. In this model the reservoir producing the 75 MW~ (equal to 550 MW,) is operated by at least nine wells (production + injection) of 4.3 km depth, and the temperature of the water produced is about 230°C. O p t i m u m electricity generation will occur with a binary cycle, and the report recommends four fluids for this purpose, one of which is isobutane. The economic conclusions reached in this report include the hypothesis, based on the results of the model, that a 75 MW+ H D R generating station can sell electricity at the bus bar for 4.9 US ~/kWh. According to the report this is a highly competitive price, compared to the 6.3 for oil-fired steam, and 7.6 C/kWh for diesel-electric. Only coal and nuclear stations, at 3.4 and 3.6 ~/kWh, are expected to be cheaper than H D R stations, but their position is expected to deteriorate with further fuel price increases. The estimated sale price of 4.9 ~/kWh (1983) for electricity at the bus bar of an H D R station would be much cheaper than the cost of generating a traditional geothermal kWh. In a recent report from Japan, Kaneko (1983) states that the cost of geothermal power production in the Japanese power-stations is about 20 y e n / k W h , i.e. about 8.8 US ~/kWh. The author concludes that this figure is about the same as that for hydraulic power and oil-fired power stations in Japan. Quite similar costs are quoted in report R.77 for the kWh that will be produced in the French geothermal power-station at Bouillante in Guadaloupe (4.2 MW). The report estimates that if the plant operates for 7000 h / y r the cost will be 8.4 US C/kWh, increasing to 11.8 C/kWh if it operates only 5000 h/yr. At this point I feel it is worth remembering that calculation of the cost of a geothermal kWh is an extremely subjective operation, depending on the weight given to the many parameters involved. Despite many attempts at standardization--the point was first debated during the UN Geothermal Congress in Pisa in 1970--cost comparisons using values provided by different countries should be regarded with some caution. -
-
-
-
3.4. In some countries, where geothermal energy is already being successfully exploited, the government provides an economic incentive to private enterprise embarking on geothermal
138
f . Barbier
projects. These incentives are mainly related to the direct use of heat, as electricity generation is nearly always the prerogative of public utilities. France's objective, for example, is to save about 1 million Oil Equivalent Tons by 1990, using low temperature geothermal fluids (compared to the 50,000 OET saved in 1982). This does seem to be an ambitions project, but France has so far invested heavily in this sector. Fast and effective financing and incentives are of crucial importance in achieving the set objectives. According to the French experts, the geothermal operator can now rely on the following extremely effective forms of financial support: - - government grant for the geothermal feasibility study, covering up to 50% of costs; - - government grant for 20% of the cost of the first well; a further 70% is added where tile well proves sterile. Local administrations may provide further aid; - - mid- and long-term coverage of the risks inherent to exploitation. These subsidies are integrated with special loans covering as much as 80% of tile capital costs of the geothermal project. Despite the fact that no geothermal legislation yet exists in Italy, some government subsidies are awarded to non-electric operators in certain circumstances. The Italian reports R.15 and R.53 decribe the Italian situation with regard to the uses of low enthalpy geothermal fluids, and specifically mention these circumstances. The three major district heating projects using hot x,,aters (Vicenza, Ferrara and Cesano) all receive government aid through the 1982 Act of Parliament, No. 308. 4. I N T E R N A T I O N A L C O - O P E R A T I O N Until the late 1950s Italy was the only country to generate electricity from geothermal energy, so that many of the countries interested in developing their geothermal resources naturally turned to Italy for information and counselling. At the beginning this international cooperation obviously centered on Italian scientific and technological experience, but was soon widened to encompass the large contribution made by other countries, especially New Zealand, to understanding the geothermal phenomenon. Italian activity has, however, continued intensely right up until the present day, and not only in the form of technical assistance but also through direct contact with foreign scientific institutions, organization of international seminars, and training experts for the developing countries. This activity is described in detail in the Italian report R.13. The United Nations were also quick to recognize the potential of geothermal energy in the industrialization of many developing countries. Thus, about 20 years ago, the UN launched some technical and financial aid programs directed at developing the geothermal resources of the Third World. Report R.84 describes one of the UN programs in the geothermai sector: the Revolving Fund for Natural Resources Exploration. The Fund is active in mineral exploration projects and has now begun geothermal exploration projects. It is now concentrating on exploratory drilling projects. The Fund finances a project totally right up to the discovery stage, in return for a small replenishment based on successful production; this concept, according to the report, has been welcomed and accepted almost universally by potential recipient countries. The ten country members of the European Economic Community are also actively involved in coordinated geothermal development. Apart from promoting geothermal energy research since 1975 (for electric and direct heat uses), the EEC has also begun financing the so-called demonstration projects, which are described in some detail in report R.21. For the European Community a demonstration project is one that has already passed through the research stage, but is held back by technical and economic problems. It must be on an industrial scale and be proved economically viable. Community aid is imperative because the
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financial risk is still too large for the individual entrepreneur. The Community provides financial aid to projects for exploiting geothermal fluids for district heating, agriculture and industrial processes, and for electricity generation. These allocations represent only a minor percentage of the total capital cost of the project, and generally never exceed 49% of the cost of the entire project. One half of the Community contribution must be paid back in a m a x i m u m of 8 years if the resource is successfully exploited. This Community aid has had a key role in promoting geothermal activity in many EEC countries; it is well known that the major drawbacks in developing geothermal energy are the high capital costs and the financial risks related to sterile or low producing wells. Any new activity is inevitably regarded with some suspicion and a certain reluctance to make the first move, but another factor that discourages the geothermal operator is the time lapse between deciding to invest and the achievement of some results. One can thus appreciate their reluctance to invest in many cases, and recommend that public funds be used to stimulate and subsidize this type of activity, at least until it takes off. 5. L E G A L A N D I N S T I T U T I O N A L A S P E C T S OF T H E E X P L O I T A T I O N OF GEOTHERMAL ENERGY No reports were submitted on the above topics, but I feel it does warrant a few comments in view of its importance for the future development of geothermal energy. Geothermal energy is usually considered a natural resource, and as such is subject to governmental control and legislation. These are aimed at preventing any damage to the environment resulting from exploitation of the reserves, at protecting the property rights of the individual, and at promoting a rational and economic development of the resource for the benefit of the community. As far as I know, the countries with a specific geothermal legislation are: Iceland, United States, Canada, Philippines, France and New Zealand. The 1968 Energy Act in Iceland incorporates the 1940 Act on the Right of Ownership and Use of Geothermal Resources. According to Article 9 of the Energy Act " . . . every unit of landed property carries with it the right to possess and exploit geothermal heat from the p r o p e r t y . . . " . Nevertheless, under Article 14 the Government is granted a general right to expropriate geothermal heat in the public interest (Torfason, 1975). The National Energy Authority has been established as the State Agency responsible for carrying out the national interest in the exploration of geothermal resources. Whereas electricity generation is a state-run operation, geothermal district heating, which is used by 80% of the population of Reykjavik, is run by the town alone. The 1968 Energy Act states, in fact, that the development of geothermal resources for community space-heating should be entrusted to the municipalities. In the United States the Geothermal Steam Act was passed in 1970 in order to regulate geothermal activity on federally owned land. The individual States are the regulators in nonfederal areas, so that there are a variety of approaches to the regulatory problems of geothermal activity in this country. California was the first to establish detailed regulations and many of the other states have modelled their approach more or less after the California example. Environmental laws have generated a new, and often complex, set of regulations, but according to some experts this is not a satisfactory solution, as the laws of the United States and of the various states have inhibited the rapid development of geothermal energy (Aidlin, 1975). This author also emphasizes that " . . . so far in the United States, our Governmental institutions have been too slow in establishing criteria and accepting concepts applicable to geothermal resources. We have been so fearful of general imaginary and exaggerated dangers or detriments that we have
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imposed c o n d i t i o n s a n d restraints on development of geothermal resources before we have allowed ourselves to ascertain whether such dangers or detriments may o c c u r . . . " . In New Z e a l a n d j u r i s d i c t i o n over geothermal resources is vested in the n a t i o n a l g o v e r n m e n t u n d e r the G e o t h e r m a l Steam Act of 1953. The Act relates to all energy derived from the E a r t h ' s n a t u r a l heat, excluding water at temperatures up to 70°C. This interpretation has proved to be satisfactory in a c o u n t r y where well temperatures have been measured up to 300°C, where it was c o n v e n i e n t to exclude from unnecessary control those areas whose lower temperatures rendered them safe from h y d r o t h e r m a l eruptions (Dench, 1975). According to this a u t h o r the existing legislation in New Z e a l a n d provides a comprehensive framework for the d e v e l o p m e n t of her geothermal assets. The G e o t h e r m a l Steam Act, in particular, emphasizes safe practices without i m p o s i n g unnecessary restraints or a d m i n i s t r a t i v e work on small-scale domestic use. A totally different situation, therefore, from that in the United States! The Philippines are a relatively y o u n g geothermal c o u n t r y with a strong c o m m i t m e n t in this sector. Law 5092 was passed in 1967 to regulate geothermal energy and its exploitation. The resource is considered i n d e p e n d e n t l y of oil and minerals, as both steam and hot waters, and its m a n a g e m e n t is entrusted to the Director of Mines, in the n a t i o n a l interest (Alcaraz, 1975). D u r i n g the last 10 years France has shown an increasing interest in the geothermal resource, a n d especially in the hot waters of the Paris and A q u i t a i n e basins. The g o v e r n m e n t quickly rationalized activity in the sector, a n d created the Comit6 T e c h n i q u e de G e o t h e r m i e in 1982, inside the Agence Fran~:aise p o u r la Maitrise de l'Energie. This Agency is also responsible for s t i m u l a t i n g the interest of local a d m i n i s t r a t i o n s in geothermal d e v e l o p m e n t , a n d for setting up with the latter j o i n t ventures for geothermal exploitation a n d m a n a g e m e n t . Finally, C a n a d a passed a G e o t h e r m a l Resources Act as far back as 1973 (Jessop, 1975), yet this c o u n t r y has still no geothermal objectives. Much to my regret I must admit as an Italian that my c o u n t r y , despite its having been the first to exploit geothermal energy on an industrial scale, has still no regulations specific to this sector; there is no legislation defining the role of the n a t i o n a l and local g o v e r n m e n t s , their relationship with one a n o t h e r and with the energy agencies of the c o u n t r y (Fanucci, 1983).
REFERENCES Aidlin, J. W. (1975) United States law as it affects geothermal developmenl. 2nd U,\ .S).'mp. on the Development and Use o f Geothermal Resources, San Francisco, pp. 2353 2357. Alcaraz, A. (1975) In: Present Status and Future Prospects For Non-electrical Uses q]' Geothermal Resources (Edited by Howard, J. H.), pp. 97 and 98. Lawrence kivermore Lab., UCRL-51926. Barbier, E. and Fanelli, M. (1983) International Institute for Geothermal Research, Pisa, Italy. CoIombo, U. (1983) Energy: industrial competition and technological development (in Italian). ENEA News Bulletin, October, Rome, pp. 10 30. Dench, N. D. (1975) The law and geothermal development in New Zealand. 2nd UN Synlp. on the Development and Use o f Geothermal Resources, San Francisco, pp. 2359 2362. Di Pippo, R. (1983) Overview of worldwide geothermal power development. Bull. Geothermal Re.s. Council May, U.S.A., pp. 3 9. }-anucci, O. (1983) Regulatory and legal considerations on geothermal energy in Italy tin Italian). kner,~ie alternative 22, 105-- 110. Jessop, A. M. (1975) In: Present Status and f-uture Prospects For Non-electrical Uses (~l'Geothermal Resource.s (Edited by Howard, J. H.), pp. 94 95. Lawrence Livermore Lab., UCRL-51926. Kaneko, M. (1983) National outlook in Ja'pan for geothermal energy developmenl. Ministry of International frade and Industry, Tokyo. Torfason, H. (1975) The law of Iceland as it affects geolhermal developmenl. 2rid U,'~ .~Vnlfl. on the Development and Use o f Geothermal Resources, San Francisco, pp. 2435 2437. Shell Briefing Service (1983) Energy in Profile, No. 5, l.ondon. UN Economic Commission for Europe (1982) Seminar on the medium-term and long-term prospects for the electric power industry. Ershevich, V. V., General Report. UN Statistic Yearbook 1981 (1983) United Nations, New York.
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LIST OF REPORTS EP/SEM.9/R.13
Outline o f ENEL international activity in the geothermal sector. R. Cataldi (Italy) (E).
EP/SEM.9/R.15
Non-electric uses o f the geothermal resource: economic considerations. G. Trambaioli (Italy) (E).
EP/SEM.9/R.21
The demonstration projects o f the European Communities in the fieM of geothermal energy. G. Gerini (EEC Brussels) (F).
EP/SEM.9/R.30
Technical-economic studies o f geothermal projects: the Djibouti case. A. Abdallah, A. Gandino and C. Sommaruga (Italy) (F).
EP S E M . 9 / R . 5 2
Geothermal activity in Italy: present status and future prospects. R. Carella, G. Verdiani, C. G. Palmerini and G. C.-Stefani (Italy) (E).
EP 'SEM.9/R.53
Industrial non-electric uses of geothermal fluids. M. Brianza, M. Guglielminetli, G. l nvernizzi and C. Sommaruga (Italy) (E).
FP SEM.9/R.61
Research and development of geothermal resources in Greece. Present status and J~aure prospects. F. Vrouzi (Greece) (E).
EP/SEM.9/R.62
Economics o f a conceptual 75 M g ' hot dry rock geothermal electric power-station. H. Murphy, R. Drake, J. Tester and G. Zyvoloski (U.S.A.) (E).
EP/SEM.9/R.68
Geothermal energy in the Spanish energy plan: present status o1 the most advanced prg/ects. J. Abad Fernandez and J. Sa.nchez Guzm~.n (Spain) (E).
EP/SEM.9/R.72
Magma-paradox and electric power. R. J. Varney (U.S.A.) (E).
EP/SEM.9/R.77
The BouHlante geothermal power-plant, Guadeloupe. P. Jaud and D. Lain+the (France) (F).
EP'SEM.9/R.84
The status of high enthalpy geothermal exploration in the developing countries. P. R. Dono~an (United Nations Revolving Fnnd for Natural Resources Exploration) (E).
(E) IF)
Original in English Original in French.
G. Calabro and