Geothermal handbook: PlanninG and Financing power Generation t e c h n I c a L r e p o r t 2 / 2

T A B L E O F C O N T E N T S
3 | 
KEy ELEMENTS OF SUCCESSFUL GEOTHERMAL ENERGy DEVELOPMENT 
74
Resource 
Information 
76
Institutions 
76
Regulation of Land Rights and Permits 
79
Role of Core Geothermal Development Organization 
81
Overcoming Institutional Capacity Constraints 
83
Policies 
87
National Policy Instruments to Support Geothermal Power Generation 
87
Public-Private 
Partnerships 
91
Geothermal Risk Insurance 
94
Further Options for Enhanced Private Sector Role 
94
Finance 
96
A Case for Public Support 
96
Financing Options for Different Project Phases 
98
Development and Financing Models Used Internationally 
100
Reaching for High Returns on Equity 
104
Scope for a Portfolio Approach 
107
Role of Donors, IFIs, and Climate Finance 
114
Some Guidance on Concessional Financing Facilities 
117
ANNEX 
1
The World Bank Safeguard Policies Applicable to Geothermal Projects 
122
ANNEX 
2 
The Value of Information from Exploratory Drilling 
125
ANNEX
3
An Illustrative Case of Government Cost-sharing of Exploration Costs 
130
ANNEX 
4
Claiming Carbon Credits 
140
REFERENCES 
144
LIST OF FIGURES
Figure
0.1
Project Cost and Risk Profile at Various Stages of Development 
4
Figure
1.1 
World Electricity Generation (TWh) from Non-Hydropower Renewables by 2030 
13
Figure
1.2 
World Map of Tectonic Plate Boundaries 
14 
Figure
1.3 
Schematic View of an Ideal Geothermal System 
15
Figure
1.4
Conceptual Model of a High Temperature Field within a Rifting Volcanic System 
17
Figure
1.5
Schematic Figure of a Sedimentary Basin with a Geothermal Reservoir at 2-4 km Depth 
17
Figure
1.6 
The Pros and Cons of Geothermal Power 
21
Figure
1.7 
Global Geothermal Capacity from 1950 (in MW) 
23
Figure
1.8 
Geothermal Power: Installed Capacity Worldwide 
23
Figure
1.9 
Generation of Electricity Using Geothermal Energy in Iceland by Field, 1969 to 2009, Orkustofnun 
25
Figure
1.10 
Investment Cost Breakdown of Utility Scale Geothermal Power Development Based on Data from Iceland 
26
Figure
1.11
Geothermal Industry Structure 
28
Figure
1.12
Projected Global Geothermal Capacity until 2030 
31
Figure
1.13
Geothermal Power Generation by Various Technologies, 2010 (% of total 67 TWh) 
32
Figure
1.14 
Concept of Condensing Geothermal Power Plant 
33
Figure
1.15 
Concept of Typical Binary Power Plant, ORC, or Kalina 
34
Figure
1.16 
Idealized Diagram Showing Multiple Use of Geothermal Energy 
36

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Figure
1.17
Modified Lindal Diagram Showing Applications for Geothermal Fluids 
37
Figure
1.18 
Simplified Load Curve with Typical Fuel Sources 
39
Figure
1.19
Screening Curve for Selected Technologies 
46
Figure
1.20 
Levelized Costs of Energy (US$/kWh) as a Function of the Capacity Factor 
47
Figure
2.1 
Geothermal Project Development Schedule for a Unit of Approximately 50 MW 
52
Figure
2.2
A Resistivity Cross Section through a Geothermal Field in Iceland 
54
Figure 
2.3
Mid-Size Drilling Rig in the Carribean 
56
Figure
2.4 
Geothermal Well Head and Silencer 
58
Figure
2.5 
Krafla 60 MW Geothermal Power Plant in Northeast Iceland 
61
Figure
2.6
CO
2
Emissions by Primary Energy Source in United States 
64
Figure
2.7 
Histogram of Geothermal Well Output 
68
Figure
2.8
Geothermal Project Risk and Cumulative Investment Cost 
69
Figure
3.1
Key Elements of Successful Geothermal Energy Development 
75
Figure 
3.2 
Institutional Framework of Kenya’s Energy Sector 
78
Figure
3.3
Selected Geothermal Project TA Activities Implemented by a Consulting Firm in Developing Countries 
85
Figure
3.4 
Policy and Regulatory Instruments Supporting Deployment of Renewable Electricity 
88
Figure
3.5
The Philippine BOT Model: Private Investor Insulated from Exploration Risk and Off-Take Risk 
92
Figure
3.6 
Models of Geothermal Power Development in International Practice 
101
Figure
3.7 
Two-Dimensional Framework of Supply Integration vs. Unbundling and Public vs. 
Private Financing of Geothermal Power Projects in International Experience 
103
Figure
3.8 
Parallel Development of Two or More Geothermal Fields Reduces Resource Risk 
109
Figure
3.9
Olkaria Power Plant, Kenya 
110
Figure
3.10
Location of Geothermal Resources in Kenya 
112
Figure
3.11 
Blending Various Financing Sources to Scale-Up Geothermal Development in Indonesia 
116
Figure
3.12
An On-Lending Facility for a Portfolio of Geothermal Projects 
119
LIST OF TABLES
Table
1.1
Types and Uses of Geothermal Resources 
19
Table
1.2 
Geothermal Power Generation—Leading Countries 
24
Table
1.3 
Market Structure of Various Segments of Geothermal Industry 
27
Table
1.4 
Companies Owning Geothermal Capacity Over 300 MW in 2010 
28
Table
1.5 
Geothermal Sites Generating Over 3,000 GWh/a (2010) 
29
Table
1.6 
Indicative Costs for Geothermal Development (50 MW ex generator capacity), in US$ Millions 
41
Table 
1.7
Observed Indicative Power Generation Costs in 2010 
42
Table
1.8 
Plant Characteristics 
44
Table
1.9
Fuel Costs, in US$ 
45
Table
1.10
Screening Curve Data: Total Annual Capital and Operating Costs (US$/kW-year) as a Function of the Capacity Factor 
45
Table
1.11 
Screening Curve Levelized Cost (US$ per kWh) 
47
Table
3.1 
Financing Options for Different Stages of a Geothermal Development Project 
99
Table 
3.2 
Case without Public Support 
105
Table
3.3
Case with Public Support 
106
Table
3.4 
Proposed Sequencing of Funding Sources under the SREP Investment Plan in Kenya 
115

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