| Title | Risk Mitigation Systems in Comparison |
|---|---|
| Authors | Benjamin RICHTER, Kai IMOLAUER, Maria UELTZEN |
| Year | 2015 |
| Conference | World Geothermal Congress |
| Keywords | risk mitigation, benchmark, geothermal projects, financing, subsidies, investments, geothermal development in other countries |
| Abstract | This paper will deal with the concepts of public risk funds established to foster the development of geothermal markets in different countries of the world. A comparison between the models of: - KfW, Germany - SAF-environment, France - Ministry for Finance, Indonesia - Swissgrid, Switzerland - GRMF – Geothermal Risk Management Fund for East African Rift - ARGEO, Worldbank will be drawn. The existing models partially base on the concepts developed by Rödl & Partner such as - KfW – Nation-wide soft loan program in Germany - GEOFAR – Guarantee Fund system for EU - INDONESIA – revolving Fund system for National Development Agency - Presently being developed: GDF – Geothermal Development Facility (South America) The particular fund systems follow the same objective: to lower the necessity of venture capital placement in the early stages, which consequently decreases LCOE (levelized costs of electricity) and therefore impacts the competitiveness of geothermal power generation in relation to alternative generation technologies. Furthermore, projects with a less advantageous risk-reward-ratio (e.g. heat supply projects on medium or low enthalpy resources) face significant financing problems during the early stages which can only be financed by venture capital. The expected outcome or profitability of such projects - taken the connected risk into consideration - will hardly lead to a placement of venture capital. A public fund system therefore takes the burden of early stage exploration or discovery risks and stimulates the market for geothermal projects and consequently leverages the investment in geothermal based infrastructure. |