geothermal power plant projects in central america - Orkustofnun

1. INTRODUCTIONRecent research on renewable energies by the International Energy Agency (2011a) illustrates thatrenewable sources are the third largest contributors to global electricity production. They accountedfor 19.3% of world generation in 2009, after coal (40.4%) and slightly behind gas (21.4%), but aheadof nuclear (13.4%) and oil (5.2%). Geothermal, solar and wind energies accounted for only 1.8% ofworld electricity production in 2009.In 2009, electricity was produced from geothermal energy in 24 countries, increasing by 20% from2004 to 2009 (as cited in Fridleifsson and Haraldsson, 2011). The countries with the highestgeothermal installed capacity (MW) were USA (3,093 MW), Philippines (1,197 MW), Indonesia(1,197 MW), Mexico (958 MW) and Italy (843 MW). In terms of the percentage of the total electricityproduction, the top five countries were Iceland (25 %), El Salvador (25 %), Kenya (17 %), Philippines(17 %) and Costa Rica (12 %) (Bertani, 2010).Central America is geopolitically constituted by seven countries: Belize, Guatemala, El Salvador,Honduras, Nicaragua, Costa Rica, and Panama. Central America makes up most of the taperingisthmus that separates the Pacific Ocean to the west from the Caribbean Sea. It extends in an arcroughly 1,835 km long from the northwest to the southeast (Britannica, 2011). Each of these countries,with the possible exception of Belize, possesses actual or potential resources for geothermal powergeneration estimated at 4,000 MW or more (Lippmann, 2006). However, for many reasons, only 506MW of the region’s enormous geothermal resources have been harnessed.The actual installed electric capacity in Central America is 53.8% thermal, 40% hydro, 4.5%geothermal and 1.6% wind. The massive unexploited geothermal resource potential in CentralAmerica promotes candidature for further investment in geothermal energy power plants projects. As acapital intensive undertaking, it is prudent to carry out a prior technical and financial assessment toassess the viability of the project. A viable project should be able to persuade investors to participatein the development.This thesis is intended to answer the question of how geological factors (temperature resource andmass flow rate) and economic conditions affect the viability of geothermal plant projects in CentralAmerica.For answer the aforementioned question the feasibility analysis as an analytical tool are using from thetechnical and financial perspectives. Nevertheless, since the available geothermal resource in theregion has not yet been fully characterized or published, this analysis thus considers a range ofpossible values of geothermal resource temperatures and flow rates to examine and establish a numberof possible expected scenarios upon using different technologies in geothermal power plant projects.In Central America, due its small geographic region divided politically into many territories; thereexist similar economic and climatic conditions for the design of geothermal plants. On the other hand,geothermal reservoirs and well properties differ from site to site, and require serious attention duringthe design process as these properties are critical optimization parameters. In this analysis, power plantmodels were designed based on the same technical parameters for each case and similar climaticconditions of the region. In Central America, the temperature range of the geothermal heat sources islarge. Therefore, in order to examine the electric power potential of the geothermal resource,thermodynamic models for two groups of conventional power plants were developed: two steamcycles using resource temperatures ranging from 160 to 340°C and a binary cycle using resourcetemperatures ranging from 100 to 180°C.A financial feasibility analysis was developed from modeling the initial investment and subsequentoperations of the project. The financial model was used for each geothermal resource scenario under abase case which used common economic data from Central American countries. Given the wide rangeof the economic assumptions, the model can be used as a kind of laboratory allowing studies for perexample taxation, dividend payments, interest, carbon bonds, etc.1