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accacc GEOTHERMAL ENERGY DIVISIONGEOTHERMAL ENERGY DIVISION

Geothermal Energy Related Risk: Water Volumetric Geothermal Energy Related Risk: Water Volumetric

EXECUTIVE SUMMARYEXECUTIVE SUMMARY

The growing Geothermal technology for producing alternative energy The growing Geothermal technology for producing alternative energy requires an answer from the insurance sector. The costs of drillings are requires an answer from the insurance sector. The costs of drillings are currently a significant part of the investments for such an important goal. currently a significant part of the investments for such an important goal. For that reason and due to the fact the science provides the necessary For that reason and due to the fact the science provides the necessary prevention technology to secure profitable operations, is that ACC Group prevention technology to secure profitable operations, is that ACC Group Geothermal Energy division has developed a policy to fulfill the need of Geothermal Energy division has developed a policy to fulfill the need of insuring the risk of not finding the right temperatures and the necessary insuring the risk of not finding the right temperatures and the necessary flow of qualities waters to produce energy.flow of qualities waters to produce energy. Our “Water Volumetric” policy is the result of our research in this field. Our “Water Volumetric” policy is the result of our research in this field. Hoping this is a contribution for Geothermal Energy development. Hoping this is a contribution for Geothermal Energy development.

Geothermal Energy ScienceGeothermal Energy Science

Geothermal Energy Related Risk: Water Volumetric

•Geothermal Energy Science Science provides the necessary studies to determine the geographical

areas where a Geothermal plant should be located. Before drilling seismic data and data from old drillings will be analyzed to define the drilling target. The following studies are made prior to selecting a drilling area: Petrophysical analysis, Seismic interpretation and analysis, Data login interpretation of old wells, and drilling dynamics analysis of old wells, possible geomechanical interpretation, possible geostatistical analysis and possible formation characterization, possible static geological modeling and possible dynamics simulations, old wells flow analysis.

Geothermal Energy ScienceGeothermal Energy Science

Natural steam/water from the production wells power the turbine Natural steam/water from the production wells power the turbine generator. generator. The steam/water is condensed by evaporation in the cooling tower and The steam/water is condensed by evaporation in the cooling tower and pumped down an injection well to sustain production. pumped down an injection well to sustain production.

Water Volumetric is intended to cover such risk conditioned to a “Third Party Water Volumetric is intended to cover such risk conditioned to a “Third Party Reserve Report” and covers: Reserve Report” and covers:

THE POLICYTHE POLICY


The contingency “Water Volumetric” policy will cover the drilling activities of The contingency “Water Volumetric” policy will cover the drilling activities of

geothermal projects to generate electricity for the “risk” of not finding the geothermal projects to generate electricity for the “risk” of not finding the

volume of water and the expected temperature in the aquifers object of a volume of water and the expected temperature in the aquifers object of a

drilling process for the operation.drilling process for the operation. Policy will cover the contingency of not finding Policy will cover the contingency of not finding water after the drilling process completed and redirection of the drills taken to water after the drilling process completed and redirection of the drills taken to

obtain success in the operation.obtain success in the operation.


Policy covers causes of nature and/or errors and omissions of the technology or Policy covers causes of nature and/or errors and omissions of the technology or technical staff in the selection of the drilling geographical areas or any other technical staff in the selection of the drilling geographical areas or any other contingencies that might cause economic losses to the individuals or companies contingencies that might cause economic losses to the individuals or companies with assured interest in the success in the drilling operation. Cover will be limited with assured interest in the success in the drilling operation. Cover will be limited by sum insured andwill reimburse costs of drilling adjusted when conditions by sum insured andwill reimburse costs of drilling adjusted when conditions described in the “claims clause” occur.described in the “claims clause” occur.

Claims will be submitted when the temperature of the hot water in the Claims will be submitted when the temperature of the hot water in the target aquifer and the hot water flow capacity of the aquifer do not target aquifer and the hot water flow capacity of the aquifer do not perform as per expectation of a “successful operation”.perform as per expectation of a “successful operation”.

A claimed will be reimbursed only if,A claimed will be reimbursed only if, An estimation of how much power An estimation of how much power can be produced before drilling and all technical aspect related to the can be produced before drilling and all technical aspect related to the selected drilling place were submitted and approved by the insurance selected drilling place were submitted and approved by the insurance company by a “Third Party Reserve Report “company by a “Third Party Reserve Report “ Drilling process completed Drilling process completed a length of drilling of a minimum of 3000 mts.a length of drilling of a minimum of 3000 mts.


CLAIMS CLAUSECLAIMS CLAUSE


When aquifers temperatures 120C and higher will be the When aquifers temperatures 120C and higher will be the targeted temperature and obtained power in the estimate targeted temperature and obtained power in the estimate and higher. and higher.

Note: In the Neuried project the estimations are: Note: In the Neuried project the estimations are: 120C temperature and 2.3 MW power. 120C temperature and 2.3 MW power.

DESCRIPTION OF A “SUCCESSFUL OPERATION”DESCRIPTION OF A “SUCCESSFUL OPERATION”

Geothermal Energy Related Risk: Water Geothermal Energy Related Risk: Water Volumetric Volumetric

Drilling processes and geographical location will required a Drilling processes and geographical location will required a certificate signed by an independent engineering company in order certificate signed by an independent engineering company in order that any certificate of insurance be valid. Client will submit to the that any certificate of insurance be valid. Client will submit to the Insurance Company resume of such specialist company or Insurance Company resume of such specialist company or individuals for approval.individuals for approval.

THIRD PARTY RESERVE REPORTTHIRD PARTY RESERVE REPORT


Market Worldwide Water Volumetric Program could be established to cover the geographical areas that in the world are considered the more important targets for drilling and generating electricity: In the U.S. : Nevada and California, in Indonesia; In Europe: Germany, Italy, Iceland and Turkey; Africa, Central America and some islands in the Caribbean such as Guadalupe are targeted regions for geothermal operations. In Germany, region of Neuried one project will start soon managed by the prestigious international company Exorka, with the support of the municipality of Neuried.

THE HOTTEST KNOWN GEOTHERMAL REGIONS IN THE WORLD

GEOTHERMAL POWER PLANTS

People who live in these areas are receiving electricity from geothermal power plants.

PLATE BOUNDARIES

Earth's crust is broken into huge plates that move apart or push together at about the rate our fingernails grow.

Convection of semi-molten rock in the upper mantle helps drive plate tectonics.

COCO2 2 Emissions Comparison (lbs/MW-hr)Emissions Comparison (lbs/MW-hr)

Source EIA 1999; Bloomfield and Moore

GEOTHERMAL PLANTS GEOTHERMAL PLANTS RISK MITIGATION RISK MITIGATION

Science provides the necessary studies to determine the geographical Science provides the necessary studies to determine the geographical

areas where a geothermal plant should be located. Before drilling areas where a geothermal plant should be located. Before drilling

geological, geochemical and geophysical data analyzed to define the geological, geochemical and geophysical data analyzed to define the

drilling target.drilling target.

Geothermal Energy Sciences used prior to any Geothermal Energy Sciences used prior to any exploration drilling: exploration drilling:

-- On site reconnaissanceOn site reconnaissance

-- Geological survey and Geological survey and

mappingmapping

-- When possible geochemical sampling and analysis When possible geochemical sampling and analysis

(or review of existing data from nearby drilled wells)(or review of existing data from nearby drilled wells)

-- Geophysics including either acoustic or magnetic Geophysics including either acoustic or magnetic

methodsmethods

The first scientific investigation steps The first scientific investigation steps

are:are:

GEOTHERMAL PLANTS GEOTHERMAL PLANTS RISK MITIGATION RISK MITIGATION

EXPLORATIONEXPLORATION

DRILLINGDRILLING

WELL TESTING AND LOGGINGWELL TESTING AND LOGGING

RESOURCE ASSESSMENTRESOURCE ASSESSMENT

FEASIBILITY STUDIESFEASIBILITY STUDIES

STEAM FIELD ENGINEERINGSTEAM FIELD ENGINEERING

PLANT DESIGN AND CONSTRUCTIONPLANT DESIGN AND CONSTRUCTION

SPECIALIZED SOFTWARE SPECIALIZED SOFTWARE

PRIOR DRILLING STUDIESPRIOR DRILLING STUDIES

GEOTHERMAL GEOTHERMAL PLANTS RISK PLANTS RISK MITIGATIONMITIGATION

GEOTHERMAL PLANTS DRILLING STATISTICSGEOTHERMAL PLANTS DRILLING STATISTICS

SUCCESS RATE OF GEOTHERMAL DRILLINGSSUCCESS RATE OF GEOTHERMAL DRILLINGSThe success rate of a geothermal drilling in areas with existing drilling The success rate of a geothermal drilling in areas with existing drilling

data can reach up to 90%. With recent developments in the geology, data can reach up to 90%. With recent developments in the geology,

hydrogeology, petrology and mapping success rates have reached 90% in hydrogeology, petrology and mapping success rates have reached 90% in

particular in Iceland and New Zealand.particular in Iceland and New Zealand.

The New Zealand based geothermal consulting company SKN stated in The New Zealand based geothermal consulting company SKN stated in

2006, that in fields with extensive existing data and feedback from 2006, that in fields with extensive existing data and feedback from

existing drillings the average hit rate during development has reached existing drillings the average hit rate during development has reached

these 90%.these 90%.

The success ratio in Iceland has currently reached 85 to 90% thanks to The success ratio in Iceland has currently reached 85 to 90% thanks to

companies like Enex, specialized on creating computerized geographical companies like Enex, specialized on creating computerized geographical

maps of the area to sit the drillings very accurate.maps of the area to sit the drillings very accurate.

Enex also developed the Neuried project.Enex also developed the Neuried project.

GEOTHERMAL PLANTS DRILLING STATISTICSGEOTHERMAL PLANTS DRILLING STATISTICS

SUCCESS RATE OF GEOTHERMAL DRILLINGSSUCCESS RATE OF GEOTHERMAL DRILLINGSIn Germany the existing geological and geophysical data data are of very In Germany the existing geological and geophysical data data are of very

good quality and have been monitored for a long time by the regional and good quality and have been monitored for a long time by the regional and

national geological and hydrological institutes.national geological and hydrological institutes.

In the Rhine region, where Neuried is situated the drilling is done in a In the Rhine region, where Neuried is situated the drilling is done in a

fractured zone, which can explain why acidification may be required to fractured zone, which can explain why acidification may be required to

obtain the requested flow of 75 liters per second from the production well. obtain the requested flow of 75 liters per second from the production well.

This was stated by Prof. Dr STOBER, head of the Geological Department of This was stated by Prof. Dr STOBER, head of the Geological Department of

Land Baden-Wurttemberg in a last assessment.Land Baden-Wurttemberg in a last assessment.

For the project Neuried, we give here under a review of the drillings For the project Neuried, we give here under a review of the drillings

performed in Germany in the past years. performed in Germany in the past years.

GEOTHERMAL PLANTS DRILLING STATISTICS


In Conclusion

A Water Volumetric policy is feasible. ACC will work with the underwriters for this program that will be available for the Geothermal Industry.

accacc GEOTHERMAL ENERGY DIVISIONGEOTHERMAL ENERGY DIVISION

PART OF ACC GROUPPART OF ACC GROUP

In business since 1974.In business since 1974.

Operations in USA, Venezuela and Europe. Operations in USA, Venezuela and Europe.

ACC GROUPACC GROUP

ACC GROUPACC GROUP

PEOPLEPEOPLE

Ali Cordero Casal, Ali Cordero Casal, ChairmanChairman

GEOTHERMAL ENERGY DIVISIONGEOTHERMAL ENERGY DIVISION

Claude Bannwarth, Claude Bannwarth, Geothermal engineer Geothermal engineer specialistspecialist

Florian Pittroff, Florian Pittroff, Representative in GermanyRepresentative in Germany

STRATEGIC ALLIANCES STRATEGIC ALLIANCES

UNITED INSURANCE BROKER LONDONUNITED INSURANCE BROKER LONDONwww.uib.co.uk

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HEATH LAMBERTHEATH LAMBERTwww.heathlambert.com

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www.usarisk.comUSA RISK CAPTIVE SERVICESUSA RISK CAPTIVE SERVICES

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http://www.cedar/

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www.wellsfargois.com

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www.longdown.com


http://www.wellsfargois/

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www.oakwoodadvisors.com

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acc geothermalprogra mpowerpoint

Technology

geothermal energy development

drilling operation

drilling process

drilling target

acc geothermal energy

geothermal plant

drilling area

selected drilling