BGR’s Regional Geothemal Programme with AUC

Addis Ababa 14.06.2016; Max Winchenbach

Outline

1. Where BGR uses to intervene with GEOTHERM II Programme

2. Links of GRMF and BGR

3. Facts about the ongoing GEOTHERM II Programme

4. Core Problems identified

5. BGR‘s Regional Geothermal Programme

6. Possible Interventions

7. Objectives and indicators

8. Activities and priorities

9. Outlook

1

10

100

1000Activity 1 2 3 4 5

Project identification

Geology and geochemistry

Geophysics

Pre-feasibility study

Exploration drilling, well testing

Resource ass., feasibility study

GO/NO GO

GO/NO GO

Permitting

Infrastructure (pads, roads)

Commercial negotiations

Plant manufacture

Preliminary design

Permitting

Development / prod. drilling

GO/NO GO

Establish plant contract

FINANCIAL CLOSURE

Plant construction

COMMISSION

Time [years]

1. Recon-naissance

2. Pre-feasibility

3. Feasibility

4. Steam fielddevelopment

5. Plantconstruction Debt Financing

or IPP

Investment by

Owner/Host

high

low

Risk of Failure

Cumu-lativecosts

[millionUS$]

Where BGR uses to intervene with GEOTHERM

Steps BG

R S

upport

risk

costs

Sectorial Programme GEOTHERM of BGR aims at supporting to minimize the

drilling risk, using :

• Geological/ Geophysical /

Geochemical Surface Studies

• Capacity Building and On-the-

Job-Training

• Institutional Support

• Regional Networking

Examples for interventions of GEOTHERM Programme

Surface Study Capacity Building Conference/ Strategy

Tendaho Geothermal

Survey of Dubti Area,

Afar, Northern Ethiopia

(2006-2012):

Geothermal and

geochemical methods

Workshop on structural

geology of the Rift Valley;

2014; Field School, Kenya

Workshop for the setup of

the AUC Code of Practice for

Geothermal Drilling;

Naivasha/ Kenya and

Entebbe/ Uganda (2014/

2015)

Link of GRMF und BGR

BGR supports accompanying measures, regional and countrywise

Geothermal

Risk

Mitigation

Facility

(2012)

EU- ITF

Private/

public

investors

Regional Geothermal

Coordination Unit (RGCU)

Additional donor:

(DFID)

Exploration drilling (40%)

Surface studies (80%),

Infrastructure (20%)

Continuation prime (30%)

Overall Objective:

„Partner countries in East Africa find public and private investors for the

development of their geothermal resources“

• GEOTHERM Phase II: 1/2009 - 1/2015, repeated prolongation until 7/2016;

• Budget is 3,6 Mio. € for Technical Cooperation

• Supporting Measures are linked to KFW/AUC‘s Risk Mitigation Facility GRMF

Partners:

• AUC;

• Ministries of Energy, Mining, Geological Surveys, Public Energy Supply

Companies.

• Activities in the following countries:

• Tanzania, Kenya, Ethiopia, Djibouti, Chile (Yemen, Malawi, Comoros, Uganda);

AUC

Facts about the ongoing GEOTHERM II Programme

• Different way of “scoring” renewable energies compared to western

countries

• Still a lack of awareness amongst political decision-makers regarding

their geothermal potential and the possibilities of using it (or not…)

• Confusing or unclear conditions related to the energy sector and

commercial licensing

• Countries get funding contracts for Geothermal projects, but they don’t

get started

• Inadequate technical capacity, staff number, unclear institutional

responsibilities for exploring geothermal sites

Core Problems identified during GEOTHERM II

Official Start planned: 7/2016

Duration: 3 years (2016- 2019)

Budget: 3 Mio. € + leftover of GEOTHERM II

Partner: AUC and partner countries

BGR staff to be involved:

Project Manager

Project Coordinator

Hydrogeologist/ Geochemist

Geophysicist/ Technical Manager

Geophysicist

Structural Geologist/ Remote Sensing Expert

BGR’s Regional Geothermal Programme with AUC

Possible interventions

Planned lines of action (in-kind):

Support in pre-exploration measures and siting

Support with the completion of already approved projects in relation to

the Geothermal Risk Mitigation Facility (GRMF) and other geothermal

risk reduction facilities

Support in regulatory questions and strategies

Other support and consultation services and information exchange,

purchase of equipment

Capacity Building

Objective:

To improve technical and institutional capacities, regulatory decision-making

criteria together with the functional/technical information base for the use of

geothermal energy in the partner countries in order to promote investment in

geothermal facilities.

Indicators:

Decisions in at least 2 of the partner countries regarding the completion of

exploration drilling are directly attributable to pre-exploration measures in this

project.

State institutions in at least 2 partner countries have submitted applications to the

GRMF or another risk reduction facility for covering the financial risk.

Proposals for new or revised laws for the regulatory framework are currently in

the process of being adopted in at least two of the partner countries.

At least 80% of recipients of training programmes regard these as useful for their

work.

Objective and indicators

Participants (22):

representants of 10 countries

3 representants of AUC

4 representants of BGR

1 representant of KfW

4 representants of international implementing organisations (GIZ, USAID,

JICA)

input of 14 countries received;

Collection of suggestions and priorities regarding possible activities

Later priorisation to 5 activities by country

Pre-Planning Workshop October 2015, Addis Ababa

Activities: Suggested and requested during Pre-Planning 2015-I

Surface and Pre-Feasibility Studies Priority for number of

countries:

Remote Sensing 5

Geomorphology 0

Structural Geology 6

Hydrogeology 2

Geochemistry 7

Geophysics (TEM, MT, VES, Seismics) 9

Support with exploration drilling/ technology 2

Reservoir engineering 0

Activities: Suggested and requested during Pre-Planning 2015-II

Application Support and Support in completing

submitted GRMF projects

Priority for number

of countries:

Supporting public sector applicants in writing their

applications for mitigation facilities

3

Suppport with the conduction of submitted surface studies /

feasibilities

2

Provide consultants to support submitted drilling

programmes

2

Consultation in regulatory questions Priority for number

of countries:

Support of institutions or public units for the introduction,

control and application of regulations and rules

0

Support in dealing with exploration licenses 0

Support communication setup between public entities

regarding responsibilities

0

Support regarding feed-in tariffs 0

Activities: Suggested and requested during Pre-Planning 2015 -III

Other support/ workshops/ training Priority for number

of countries:

Low and middle enthalpy potential 1

On-the job-training in surface exploration methods 6

Support of training for specific staff 5

Awareness rising within politicians and decision makers 2

Courses in geology, geophysics, geochemistry, remote sensing 3

Absorbing training costs for participants from the region 2

Hardware and related training 3

Financing laboratory analyses 5

Mapping of geothermal sites 1

Purchase of equipment 2

Comparison Data quality in order to maintain standards (ISO) 1

Training data analysis, gravimetry, others 1

How to continue?

Additional intern pre-selection of suggested activities in terms of

Relevance

Need

Grade of planning

Potential

Grade of coverage with geothermal intervention

Political will

Costs

7/ 2016 New Programme should start

Planning Workshop (probably 9-10/ 2016) will follow up with all projects/

countries selected as realistic; intervention and time planning

Further Follow-up with projects in the selected countries, fine tuning on

measures, staff, time frame, equipment

Setup of implementation agreement with AUC and partner countries,

including all planned interventions, after completed planning

Space for additional interventions

Questions?

Max.Winchenbach@bgr.de

zvl-geotherm@bgr.de