| Title | Geothermal Risk Mitigation Programs |
|---|---|
| Authors | Kai IMOLAUER, Maria UELTZEN |
| Year | 2020 |
| Conference | World Geothermal Congress |
| Keywords | geothermal, risk, mitigation, programs, public, economic |
| Abstract | Public Risk Funds – design, chances and challenges Public risk funds have been established to foster the development of geothermal markets in various countries of the world. A detailed comparison of structure, objective and impact between the models of - GDF – South America (www.gdflac.com) - GRMF – East Africa (www.grmf-eastafrica.org). - GREM – Indonesia (n/a) will be given. [The authors have designed the GDF, are currently fund manager for GRMF (basic concept also created by authors) and support the Worldbank for the implementation of GREM.] Moreover a short introduction to the facilities established in Switzerland & France will be given. 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. Such funds will be essential to allow the transition in power and especially heat sectors worldwide to geothermal based regenerative systems. The different approaches of such facilities are usually depending on the particular target markets or region, the geology and the financing situation. The program of East Africa (as a grant based system) e.g. shows that even less developed markets can definitely be stimulated by such capital and that such programs leverage substantial equity and public investments into the geothermal sector. Due to the long lasting experience in the fund management of GRMF (6 years), the authors will provide also insight views in the largest challenges for the fund handling, which are directly connected to the development of geothermal projects (about 30 projects in pipe line of GRMF) in East Africa and give indication to possible way outs or solutions to accelerate the market development. |