geothermal power plant projects in central america - Orkustofnun

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The internal rate of return is offset by the volume of Certificated Emissions Reductions produced. TheClean Development Mechanism that allows developed countries to continue emitting greenhousegases, developing countries with high baseline emission factors can benefit from this mechanism,producing a higher volume of CERs than countries with low baseline emission factors. In CentralAmerica, Costa Rica has a lower baseline emission factor of 0.15 tCO 2 -eq/MWh, and the rest of thecountries are between 0.555 and 0.771 tCO 2 -eq/MWh. For geothermal power plant projects thatreduce emissions from lower emission sources (such as Costa Rica), the potential impact of CDM onIRR of equity is between 0.3 and 0.6%. For projects that reduce emissions from medium emissionsources (such as Guatemala, El Salvador and Honduras), the impact of CDM on IRR of equity isbetween 1.0 and 1.7%. For projects that reduce emissions from higher emission sources (such asNicaragua and Panama), the impact is between 1.6 and 2.6 %.Incentive laws of tax exemption for the development of renewable energy projects do not give largeenough exemptions to enhance the internal rate of returns required by investors when small sizedpower plant projects are conducted: in a case of flash technologies, power plant size smaller than orequal to 20 MW; and for ORC technology, power plant sizes smaller than or equal to 10 MW. Whencomparing the Central American countries, Nicaragua and Guatemala tax incentive laws are morefavorable to the profitability of geothermal development.The study shows that in Central American countries, the development of geothermal projects is limitedby the internal rates of return demanded by private investors, common values for risk investments indeveloping countries. The final goal for the country governments is a wealthy foundation; hence,regulations of the energy sector could be reviewed. Important factors where the government couldhelp to generate a positive impact on profitability and risk of the investment are: energy price, taxes,and steam development costs. Numerous alternatives could be evaluated such as: improved taxincentive laws, large period energy contracts, and public funds for exploration and confirmationphases.Lack of integration of geothermal energy data from Central America is the main limitation of thisstudy. Central America is a small geographic region divided politically into many territories, and thereis a concentration of companies and institutions related to geothermal research. Hence, initiatives fordeveloping the interconnection of companies and institutions in the Central American countries mustbe an important agenda for their governments. Based on recent experience of developed countries, asIceland, with geothermal resources, one proposal to analyze could be the creation of a CentralAmerican Geothermal Cluster.Further research done by geothermal developers in Central America would improve the accuracy ofresults. Further studies might consider particular geothermal reservoirs and well properties such asfluid chemistry and well production curves from a specific geothermal field. Additionally, real marketcosts of components could be used for estimation processes, more easily obtained for geothermaldevelopers.63
REFERENCESADB, 1999: Handbook for the economic analysis of water supply projects. ADB, Website:http://www.adb.org/Documents/Handbooks/Water_Supply_Projects/AMM, 2011: Informe Estadístico 2010. Website: http://www.amm.org.gtAndersen, W. and Bruno, T., 2005: Rapid screening of fluids for chemical stability in organic Rankinecycle applications. Industrial and Engineering Chemistry Research, Volume 44, No 15, 5560–5566.Angantýsson, A., 2011: Geothermal power plants as CDM projects – the financial premise forregistering geothermal power plants as CDM projects. University of Iceland, Reykjavik, MSc thesis,102 pp.Asturias, F. and Grajeda E., 2010: Geothermal resources and development in Guatemala countryupdate. Proceedings World Geothermal Congress, Bali, Indonesia, April 25-30, 2010.Asturias, F., 2008: Geothermal resources and development in Guatemala. Papers presented at the 30thAnniversary Workshop of the United Nations University Geothermal Training Programme, UNU-GTP, Reykjavík, August 26-27, 2008.Barker & McKenzie, 2012: CDM rulebook. Website: http://cdmrulebook.org/Battocletti, L., 1999: Geothermal financing workbook (2 ndEnvironmental Laboratory.ed.). Idaho National Engineering &Bejan, A., Tsatsaronis, G., Mora, M., 1996: Thermal design and optimization. John Wiley & Sons,Inc, Publication. New York, 522 pp.Benninga, S., 2008: Financial modeling (3 rd ed.). The MIT Press, Cambridge, MA, 1132 pp.Bertani, R., 2010: Geothermal power generation in the world. 2005-2010 update report. ProceedingsWorld Geothermal Congress 2010, Bali, Indonesia, April 25-30, 2010.Birkle, P., Bundschuh, J., 2007: High and low enthalpy geothermal resources and potentials. In:Bundschuh, J. & G.E. Alvarado (editor): Central America: Geology, resources and hazards. Taylorand Francis/CRC Press, Publisher, Netherlands. 705-776 pp.Björnsdóttir, A.R., 2010: Financial feasibility assessments: building and using assessment models forfinancial feasibility analysis of investment projects. University of Iceland, Reykjavik, MSc thesis, 66pp.Bloomfield, K.K. and Laney, P.T., 2005: Estimating well costs for enhanced geothermal systemapplications. Idaho Falls, Idaho, USA, Idaho National Laboratory for the US DOE.BLS, 2011: CPI inflation calculator. Website: http://www.bls.gov/data/inflation_calculator.htmBoehlje, M. and Ehmke, C., 2005: Capital investment analysis and project assessment. WestLafayette. Purdue University.Britannica, 2011: Britannica online encyclopedia. Website: http://www.britannica.com/Bronicki, L., 2004: Accelerating development of geothermal energy in developing countries. Day ofGeothermal Power, organized by UNEP Energy, BGR, Rödl & Patner, GtV, GFZ and others, Bonn,Germany, June 1-4, 2004.64
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GEOTHERMAL TRAINING PROGRAMMEHot sp
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This MSc thesis has also been publi
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ACKNOWLEDGEMENTSMy gratitude to the
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TABLE OF CONTENTSPage1. INTRODUCTIO
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PageAPPENDIX A: FINANCIAL MODEL ...
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1. INTRODUCTIONRecent research on r
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2. CENTRAL AMERICAN DATA2.1 Power p
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2.2.3 HondurasThe Honduran electric
Page 18 and 19:
NET INJECTION BY SOURCE (2010)INSTA
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income taxes for a period of 10 yea
Page 22 and 23:
annual temperature ranges from 17 t
Page 24 and 25: egional reconnaissance in 1981ident
Page 26 and 27: 4. GEOTHERMAL ELECTRICAL POWER ASSE
Page 28 and 29: The net contribution of that power
Page 30 and 31: Introducing , = , and , = ,
Page 32 and 33: 9ProductionWellBoiler5Turbine~1046P
Page 34 and 35: TABLE 3: Parameters and boundary co
Page 36 and 37: eaches the maximum limit, and for h
Page 38 and 39: 160180140160tc vap[i], th vap[i]120
Page 40 and 41: average results, and combining them
Page 42 and 43: The base cost ( ) can be calculate
Page 44 and 45: calculation for another separator c
Page 46 and 47: mass flow rate (kg/s) on the plant
Page 48 and 49: Table 11 shows a summary of costs f
Page 50 and 51: 5.6.4 Comparison of capital costs b
Page 52 and 53: 6. FINANCIAL FEASIBILITY ASSESSMENT
Page 54 and 55: 6.2 Model structureThe financial fe
Page 56 and 57: CCF = EBITDA − ∆Working Capital
Page 58 and 59: Interest on loansFleischmann (2007)
Page 60 and 61: IRR30%25%IRR CapitalIRR Equity20%Si
Page 62 and 63: FIGURE 42: Allocation of funds for:
Page 64 and 65: 340IRR Free Cash Flow to Equity [ %
Page 66 and 67: flash technology is between 0.3 and
Page 68 and 69: Energy Price Availability Factor O&
Page 70 and 71: FIGURE 50: Density and cumulative p
Page 72 and 73: In Chapter 6, Figure 44 illustrated
Page 76 and 77: Cengel, Y. and Tuner, R., 2005: Fun
Page 78 and 79: IEAb, 2011: Technology roadmap: Geo
Page 80 and 81: Salmon, J., Meurice, J., Wobus, N.,
Page 82 and 83: APPENDIX A: SUMMARY OF FINANCIAL MO
Page 84 and 85: APPENDIX C: INVESTMENT AND FINANCIN
Page 86 and 87: APPENDIX E: BALANCE SHEETBALANCE SH
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