Dominica Geothermal Energy Presentation

Paul MONDESIR, EU Delegation Barbados and OECSEU Energy and Water Seminar, 18-22 May 2015, Barbados

Background – Geothermal Energy•Renewable resource; stable, sustainable base load power; very low greenhouse gas emissions; cost-competitive with fossil fuel based electricity

•Dominica: largest geothermal potential Eastern Caribbean; most advanced project in the English-speaking Eastern Caribbean

•Dominica: installed capacity - 26.7 MW, about 70% of which is supplied by thermal generation and the remainder by hydropower. Electricity price app. 0.48 USD/kWh

•Dominica's geothermal potential: 1969 UNDP report by the UNDP; French Geological Survey (BRGM) studies in the 1980's

• Early 2002 Government Decision to study closer

Simplistic Geothermal Energy System

Role of Development Partners

• OAS (2005) and EU - INTERREG III-B (2008) studies confirmed the Roseau Valley as an ideal area

• Prospect of exporting 40-50 MW to Guadeloupe and Martinique

• 2008 agreement between Dominica and the Regional Council of Guadeloupe (Interreg Caraibes)

• EIB interconnection feasibility study (planned , never took place)

• Exploration activities and drilling – EU, AfD, FFEM, ADEME, BRGM, Dominica

Exploration drilling• Funded jointly by the EU and AfD (2011-2012) - three slim hole

wells (WW 1-3) by Iceland Drilling Company (IDC), well testing, and continued technical support for the GDPMU. The average cost of drilling each well was approximately USD 4 mn.

• 2012 - confirmed viability of resource; a field potential of 65 MW with a 90% Monte Carlo Method Probability was estimated.

• Possibly expand a little of our experience with this phase…

Geothermal Catchment Area

Three Slim HolesLaudat

WW-2WW-3

Wotten Waven

WW-1

WA

Video First Phase , exploration and characterization

Production• - 2013: “production phase” commenced, included includes the drilling of

production and reinjection wells as well as technical studies• Financed under the newly established EU funded Caribbean Investment Facility

(CIF) which contributed EUR 2 mn, and a loan of EUR 6.5 mn from the AFD

• Subsequently a 4.7M EUR contract between the government of the Commonwealth of Dominica and IDC for drilling two full sized wells was signed in December 2013.

• On June 10, 2014 a flow test commenced at WWP1 and confirmed an electric power generation capacity exceeding 10MW.

• comprehensive social and environmental baseline study spanning December 2013 to June 2015 is being conducted by ADEME

Grid integration

• DOMLEC commenced planning the upgrade of the grid. Currently 11kV inter-connectors or distribution feeders. New geothermal power plant: two 33kV transmission lines are required. Proposed to take a year to complete; cost of the grid upgrade approximately : US 42 mn.

• DOMLEC considering installing transmission lines that will be easily adaptable to the larger geothermal plant in the future. The island's rugged terrain often presents a challenge. Costs ultimately transfer to the consumer. How and when the resulting cost transmits to the users will have to be decided by the IRC in discussion with DOMLEC.

Adapted from the Geothermal Handbook: Planning and Financing Power Generation, ESMAP, The World Bank, 2012.

Figure 1 (Sketch): Phases of the Geothermal Development Project in Dominica compared to the typical phases of a geothermal development process as outlined by ESMAP

Regulatory and Legislative Environment

• Geothermal Energy Act in 1974 Dominica became the first Caribbean country to implement geothermal legislation

• failure of the Dominica Geothermal Development Company, - a joint venture between the Government of the Commonwealth of Dominica and the U.S.-based Caribbean Power Ltd

• Physical Planning Act of 2002, which guides the management of land development, and the Electricity Supply Act (ESA) of 2006. The ESA established a new statutory board for the electricity sector, the Independent Regulatory Commission (IRC)

• Environmental and Planning Regulations for Renewable Energy (EPRRA) was drafted 2010 and contains stipulations regard to environmental impact assessment requirements. hHowever, it has not yet been passed.

Regulatory and Legislative Environment

• Drafts of the National Energy Policy (NEP) and Sustainable Energy Plan (SEP) were initiated in 2011 and finalised in February 2014.

• Castalia Strategic Advisors provided support for development of a legislative and regulatory framework for renewable energy including the Geothermal Development Billnow being reviewed under the EU/AfD CIF programme…. And should be passed by end of last yearproposes a Geothermal Resources Advisory Committee (GRAC) to be the primary administrator for all activities related to geothermal development in Dominica

Institutional arrangements

2009, with EU funding, 1.45M EUR funding agreement between the government and the EU, the Geothermal Development Project Management Unit (GDPMU) was established in the Ministry of Public Works, Energy & Ports by the Government of Dominica (original staffing?)2013 plans were made to reform the GDPMU into a Geothermal Development Unit Additionally, local professionals have received geothermal training in the USA and El Salvador. 34, This includes geothermal training for four geothermal team members in Nevada. This was financed by the Energy and Climate Partnership of the Americas (ECPA) which is funded by the U.S. State Department, the Ministry of Public Works, Energy and Ports. These training initiatives were part of the Geothermal Resource Development Programme of the Government of Dominica.

Development

The Clinton Climate Initiative of the Clinton Foundation supported the Deal Team by providing advisory support on technical, financial, and legal matters.February 2013 - main prospective developer, Electricite de France (EDF), withdrew from negotiaions which had been on-going since 2005. The decision came a only mere three months after EDF and the Government of Dominica signed a Memorandum of Understanding (MOU) to select the best routes for plant construction and eventual interconnection with Guadeloupe and Martinique. parent company of DOMLEC, Emera, expressed interest. March 2014 a French consortium of GDF Suez, NGE Group, and CDC Infrastructure formally expressed interest

Environment and Social Aspects

The collaboration effort was fortified in the second year by the establishment of the OECS Energy Coordinating Committee (OECC), which brought representatives together from the OECS Secretariat, the CARICOM Secretariat, CARILEC, CREDP/GIZ, OAS-CSEP/RCU and the St. Lucian ministry in charge of energy matters. The OECC meetings aimed to provide a forum for dialogue and collaborative action, thereby eliminating the risk of duplicating efforts while simultaneously complementing the initiatives of each of the participants, thus making more efficient and effective use of resources.

The OAS provided additional resources through the Energy and Climate Partnership of the Americas (ECPA) funded by the U.S. State Department.

International Dimension

Dominica organised, with WB and other support, a Geothermal Work Shop in 2013 – GAP analysis conducted by WBNZ conducted something similar in 2014.Dominica presented their case at CREF in 2014 – and presumably also at other international conferencesConclusion – Dominica is globally a first mover as a SIDS… and message is getting out there

Total Project Cost To Date

Cost

02nd Video Production wells and Re-injection wells

Lessons learned

• Early stakeholder engagement is imperative• Geothermal education is imperative (technicians)• Access to diverse modes of geothermal expertise • Tender issues • robust regulatory framework • presence of champions – national vision based on consultations• implications of rugged terrain • Regional and international partnerships are essential • Information sharing• Spinning reserves (Peak 17.2,Hydro 3.2(6.4) Is 27MW

Lessons learned

• Early stakeholder engagement is imperative• Geothermal education is imperative (technicians)

• Early stakeholder engagement is imperative• Geothermal education is imperative (technicians)

Prospects

• Development beginning in 2015;estimated completion of small plant (app. 8 MW) is the first quarter of 2017

• Response of reservoir monitored for a few years. Data will inform expansion to a 100-120MW plant with interconnection with the French islands (2025?)

• High electricity costs are a major barrier to business success in Dominica. Improved electricity supply and stable cost: potential to attract investors and businesses.

• Projected consumer savings; once an agreement with the developer is finalised.

Prospects

• 1. May encourage educational tourism; including tours of the facility. Iceland: types of geothermal-related businesses are vast and Dominica could be no different.

• 2.Implementation of a geothermal plant can stimulate further interest in utilising geothermal energy and economically beneficial options such as producing dried fruit, possibly even for export may become a reality.

• 3.Plans for supplying the capital with hot water from geothermal areas are also being considered.

• 4. DA Proposed as a centre of excellence within a planned CCREE• 5. Project has provided justification for establishing of GEO FEC

Thank You