Low Temperature Geothermal Resource Exploitation in USA

Transcription

1 Low Temperature Geothermal Resource Exploitation in USA EUROGIA 2020 & RHC-Platform Joint Event, Paris, 16 September 2013 Presenter: Michael Mugerwa, Technip Claremont, California

2 Key Messages - Geothermal Global Collaboration Technology and Geothermal Expertise Feasibility Studies Resource Viability, Project Viability, Technology Selection; Economic Analysis Low temperature, high volume geofluid opportunities in Western USA Technologies Flash Steam, Binary, Advanced Cycles (Kalina; Kalex) Front End Engineering Design (FEED); Capital Cost Estimates Technip Capabilities, Financial Strength to offer EPC wrap Local USA; New Zealand; Indonesia; France; Germany; Chile (GTN LA) 2

3 Technip Global Energy Company Recognized leader in the execution of EPC energy projects A leading global provider of engineering, technologies and project management services, on land and at sea, serving the energy industry for 50 years Multi-local: 38,000 team members in 48 countries Industrial assets on all continents, a fleet of 32 vessels (with 4 under construction) Three business segments: Subsea, Offshore & Onshore; One Technip 2012 revenue: 8.2 billion 3

4 Mannvit and Technip Collaboration Since 2009, the collaboration offers geothermal project developers and financers with a single point source of responsibility for geothermal development services Mannvit Technip Iceland's Premier Consulting & Engineering Service Provider Geothermal Consulting Engineers since 1960s Experienced in all Stages of Geothermal Development Well Positioned to Advise on Resource Risks Project Execution Excellence Highly Experienced EPC Contractor Global Procurement Network Construction Management Solutions Financial Strength Undertakes Execution Risk 4

5 Geothermal Project Timeline Typical 50 MW power project 5 Development Phases Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year Project start up Legal work Concession Permitting Exploration Phase Pre-Feasibility Feasibility Detailed Design & Construction Operation & Maintenance The time needed to complete each phase is dependent on the geothermal resource and project related factors and thus varies between projects Exploration Pre-feasibility Feasibility Design & Construction Operation & Maint. Data collection & Analysis Geological survey Geochemistry Geophysical surveys Temperature gradient drilling GIS Data collection & Analysis Focused exploration Drilling of slim wells Drilling of deep exploration wells Resource evaluation Simple modelling Drilling of the first successful full-sized production well Confirmation wells Resource testing Resource power potential assessment Preliminary plant design Drilling and testing of remaining wells Final plant design Plant construction Monitoring system Resource management Detailed modelling Plant maintenance Drilling of make up wells

6 Project Examples Mannvit Nesjavellir Geothermal Power Plant in Iceland Size 120 MWe, 300 MWt Project Cost 600 m Year Role Lead design Hellisheidi Geothermal Power Plant in Iceland Size 300 MWe, 400 MWt Project Cost m Year Role Lead design Theistareykir Geothermal survey and research Size 150 MWe Project Cost 190 m Year 2007 Role Project supervision and execution, model installation

7 Focus Market United States 9 GW (conservative estimate) geothermal resource potential 3.4 GW of online capacity (2013) o 81% in CA; 15% in NV; 4% in HI, UT, OR, ID, AK, WY o 47% dry steam; 27% flash steam; 24% binary technology ~ 2.5 GW of confirmed projects in pipeline (2013) o 125 confirmed projects (Geothermal Energy Association criteria) o ~ 800 MW in Advanced Stages i.e. Permitting & Initial Dev. / Resource Prodn. & Power Plant Constr.) o 71% in CA; 14% in NV; 26% in OR, ID, UT, NM Majority are binary cycle projects (medium to low enthalpy resources) o Typical project sizes: MW Project Drivers o Renewable Portfolio Standards: CA 33% in 2021; NV 20% 2015; OR 25% 2025; UT 20% 2025 (voluntary) o Utilities need baseload, dispatchable power. The current excess of intermittent solar and wind power impacts grid stability / quality o US Treasury Incentives: Investment Tax Credit (thru 31/12/2013 for start of construction); Renewable Energy Production Incentive (2.1 US /kwh before 10/1/2016) Challenges o Short term oversupply of renewable power in biggest market, CA, is driving down renewable PPA prices to below $90/MWh. Demand for geothermal power expected to pick up again from early o Weakening support policies Expiration of most attractive incentives 7

8 Current Technology Binary Cycles Organic Rankine Cycle / Kalina Cycle Low & Medium Temperature Reservoirs ENEL Stillwater, NV Hybrid Geothermal / Solar Power Plant Source: Geothermal Resources Council 8

9 Kalex Geothermal Systems Technology Global, exclusive license agreement Dr. Alexander Kalina o 2nd generation Kalex Cycle technology under new patents Maximized power production o Current target temperature range: C o Target capacity range: Up to 20 MWe Gross (multiple trains possible) Improved efficiencies at competitive capital costs o 20 50% higher than ORC Cycles, especially below 120 C o Reduced heat rejection needs => lower parasitic loads Reduced number and depth of wells o Minimized specific brine consumption Robust operating performance o Ammonia-water working fluid o Ambient temperature changes => self adjusts to diurnal and seasonal temperature changes o Brine temperature degradation => wide operating range 9 Superior Net Power Performance

10 Low Temperature Resource Exploitation Drilling Risk Mitigation o 20 50% reduction in drilling equity requirements prior to financial close o Reduces funding gap between initial seed capital and project financing o Preserves more value for the developer by minimizing need for high cost capital drilling equity o Fewer production wells increase investor IRRs By reducing subsurface risk profile Improving development timelines Financing Risk Mitigation o Raising project debt with increased lender confidence Technip strong balance sheet Technip performance guarantees and warranties o Dynamic geothermal reservoir risk Aggressive temperature declines over time can occur after Commercial Operation Date Kalina technology mitigates risk with higher efficiencies over wider operating range than ORC Translates into better project borrowing terms from lenders Reduced Equity Needs / Bankable EPC Guarantees 10

11 Entiv Organic Energy, Oregon Project Summary o High volume, low temperature geofluids from low cost surficial wells up to 700 feet in depth o 5+ MWe Lower Klamath Lake Project,CA: Uniquely located within a National Wildlife Refuge (NWR) managed by US Fish & Wildlife Service. Project to supply water for migratory birds on the Pacific Flyaway o 10 MWe Klamath Hills Project, OR. On private land 10 miles North of NWR Status o US DOE grant award o Conceptual reservoir model o Project cost estimating (AACE Class III) is complete o Detailed value engineering effort is complete o 10 MW Kalina Cycle license o Negotiated PPA sale to California utility o Permitting underway 11

12 Geothermal Energy Economics Costs o Greenfield Flash Plant: $2,000/kWe $4,000/kWe (IEA, 2008) o Binary $2,400/kWe $5,900/kWe (IEA, 2010) Highest costs in Europe (a few MWe) in low/medium temp. resources O&M costs (including make-up wells) o $19/MWh $24 / MWh (IEA, 2011) o As low as $10/MWh $14 /MWh in New Zealand Production Costs / Capacity Factors Financing o Typical capital structure for geothermal project developers is 55% - 70% debt & 45% - 30% equity o US debt lenders (typically charge interest rates from 6% to 8%) & require 25% of resource capacity proven o Large utilities using balance sheet / cash flows have different equity / loan cost structures 12