World Geothermal Congress 2000

Issued on June 1, 2000

"Sustaining Geothermal Energy into the 21st Century"
  The World Geothermal Congress 2000 (WGC2000), sponsored by the International Geothermal Association (IGA) and The Japanese Organizing
Ladislaus Rybach
Teruyuki Akema
Committee for WGC2000 (JOC), began on May 28, 2000 under the theme of "Sustaining Geothermal Energy into the 21st Century." The WGC has been held once every five years since 1970 and is the largest international conference on geothermal energy. It has been held a total of five times in Italy and the USA. This is the first time for the Congress to be held in Asia and to mark the event, will be held consecutively in the Kyushu and Tohoku regions, representative geothermal sites of Japan. It is hoped that through these venues, current developments and researches in Japan to harness geothermal energy can be made known to the world.
  At the welcoming party held on the evening of the 30th, Shigeru Ohno, Vice Chairman of JOC and Chairman of Kyushu Electric Power Co., welcomed the participants who had gathered from around the world. He extolled the virtues of geothermal energy as the "clean energy" and the key to solving environmental issues, emphasizing that in Japan, this energy is considered to be a practical one,testifying to the long history of geothermal energy as an energy source in
Phillip M. Wright
Shigeru Ohno
this country.
  At the opening ceremony on the 31st held at B-Con Plaza in Beppu, Oita Prefecture, Ladislaus Rybach, Chairman of the Organizing Committee for WGC2000 (OC) advised the participants to take advantage of the social and business opportunities offered by the Congress and to take it upon themselves to make the public and governments aware of the advantages and benefits of geothermal energy as this energy can be found practically anywhere in the world and can be sustained and expanded into the 21st century.
  He was followed by Teruyuki Akema, Honorary Chairman of WGC2000 and Chairman of JOC who stated that it was most meaningful to hold WGC2000 in Japan as the world enters the millennium since Asia is where geothermal energy is being actively promoted and used. He added that geothermal use will be expanded in the future and that the Congress will prove to be most meaningfulto all participants as the latest theories and technologies can be tapped.
  Phillip M. Wright, Honorary Co-chairman of WGC2000 also stressed the
Morihiko Hiramatsu
Nobuyuki Inoue
importance of coming together as geothermal technology is developing and changing so rapidly that there is a real need to share information with each other. He took the opportunity to present two awards, the first to Morihiko Hiramatsu, Governor of Oita Prefecture in thanks for hosting WGC2000 and a special Award of Merit to Teruyuki Akema in appreciation of the excellent job done by the JOC in preparing for the Congress as well as the various companies for their financial contributions.
  He was followed by Morihiko Hiramatsu, who stated that he was most honored to receive the award and to host the WGC2000 in Beppu. He hoped that the Congress would be able to beam its message across the seas as the B-Con Plaza, the venue, has been named with the hope that it could serve as the beacon of information.
  Nobuyuki Inoue, Mayor of Beppu City, stated that Beppu was an ideal venue for the Congress as it has many hot springs and that his "spa-tourism" project was in some ways related to the ideologies of WGC.


Opening Addresses by two Experts
  
Various Approaches to Obtaining Geothermal Energy
  Koji Kajimura, Secretary Director-General, Agency of Industrial Science and
Koji Kajimura
Technology, the Ministry of International Trade and Industry, in his opening address, stated the importance of geothermal energy in east Asia as 30% of the energy in use is attributable to this source. In Japan, the government became involved in geothermal research in 1974, around the time of the oil crisis as there was a pressing need to find an alternate energy source. Besides geothermal energy, various other energy forms were studied. However with the Kyoto Protocol, interest in clean energy is on the rise and with alternate energy sources such as solar and wind sources proving to be unreliable as they are subject to weather conditions, and hydroelectricity destroying the ecosystem, interest in geothermal energy is on the rise as it is not only reliable but with improved technology, becoming more cost competitive. Water in fractures heated by the surrounding earth is exploited in Japan as this is the most prolific source while another is the injection of water into the hot earth to generate steam. Thus there are various approaches to obtaining geothermal energy in Japan and these should prove to be the means of addressing global warming.

Clean Source of Energy
  Chicco Testa, Chairman of the National Electric Company of Italy (ENEL) began
Chicco Testa
his address by outlining the development of industrial geothermal energy in the world, emphasizing the fact that it all began in Italy. Currently exploitation of deep resources is underway by drilling 3000 meters into the earth while injection of water into depleted reservoirs is making this energy source sustainable and renewable. Despite these advantages, there is a lack of visibility and although the IGA task force is disseminating information and technology, this is not enough. Thus it is the responsibility of all people present at the Congress to join forces and exert influence on their governments as well as spread understanding of this clean source of energy. He stated firmly that the Congress was a turning point in the development of geothermal energy and therefore charged all present to put their best efforts into promoting it.




Plenary Sessions Attract a Large Number of Participants
  
Plenary Session 1: National Energy Policies in Asia
  
  Ben-hur C. Salcedo, Undersecretary , Department of Energy, Philippines
  "Geothermal Energy Development Policy of the Philippines"
  The Philippines relied heavily on imported crude oil, however, the oil crisis in
the '70s highlighted its dependence on this energy source. As a result, a policy was implemented by which self reliance on indigenous resources would be promoted. To do so, several factors had to be considered including the securement of an alternate energy supply, diversification of energy source, social and environmental compatibility as well as affordability. By 1999, the country achieved a 43.5% self-sufficiency through energy diversification and reliance on indigenous energy. In this, geothermal energy played a leading role as it was not influenced by weather conditions, could be sustained over a long period of time, and was environmentally benign as compared with other fuels among others. However, new incentives are required to attract interested investors now that deregulation has been implemented. Beyond these considerations, one fact still stands out and that is the Philippines is the world's second largest geothermal energy producer and the largest geothermal energy user.
  
  Surya Suryantoro, Directorate General of Geology and Mineral Resources, Ministry of Mines and Energy, Indonesia
  "Challenges of Geothermal Development in Indonesia"
  Despite the fact that there are 129 active volcanoes in Indonesia and its nomer "Chain of Fire," only 16 sites have been extensively explored and of these only 6 exploited. This is because currently coal is cheaper than geothermal energy and furthermore, the geothermal energy has to be used in situ or locally. Besides these factors, added disincentive is the high cost of exploration and exploitation which makes it difficult to fully develop and take advantage of geothermal energy. Two options exist, however. One is that exploration and exploitation of geothermal energy be privatized in rural areas and the government lend a hand in large-scale explorations.
  The good news is that despite the government being focused on the problems of IPP which include the increased demand for electricity when the private sector had a chance to take part in power generation, i t is still ready to consider development of geothermal energy if the cost is made competitive with improved technology.
  
  Song Chao Yi, Deputy Director-General, Department of Basic Industries, State Development Planning Commission, China
  "Government Policies on Development and Utilization of Geothermal Energy in China"
  China is the world's largest consumer of energy next to the USA, thus there was a need to outline an energy policy which would restructure energy sources. The first move was to gradually phase out the use of coal and convert to a clean energy source. This was high on the list of priorities as with economic development, and a higher level of lifestyle, there was a growing environmental concern. Thus the development of geothermal energy was an important pillar in the country's energy policy. Currently, there are 11 demonstration power stations in China, the largest being the one in Yangbajing in Tibet which generates 25.18 MW. Meanwhile, direct utilization of the energy is for heating, refrigeration, agricultural use, drying and others.
  Important issues for the government are to set down programming and development goals; strengthen the law concerning renewable energy; set up economic incentive policies; and policies and measures on geothermal power generation. Measures which should be adopted include investment back-up by the government; preferential taxing; cheap credit and guarantee of credit; setting up of venture capital funds; and environmental tax on environment polluters.


Plenary Session 2: Worldwide Status of Geothermal
  
  John W. Lund, Doctor, Oregon Institute of Technology, USA
  "World Status of Geothermal Energy Use Overview 1995 - 1999"
  He began by outlining the situation of the development of geothermal resources in the past five years. According to various data, 80 countries have some kind of geothermal resources and 70 countries are utilizing geothermal energy. In terms of geothermal energy use, the US and Asian countries are ahead of other countries, while European countries, North America and Asian countries rank high in regard to the direct utilization of this energy. He stated that the direct use of geothermal energy is expected to further increase in the next five years and in this sense, was optimistic about the future.
  
  Gerald W. Huttrer, President, Geothermal Management Co., Inc., USA
  "The Status of World Geothermal Power Generation 1995 - 2000"
  He discussed the generation of geothermal power in the world from 1995 to 2000. The installed capacity of geothermal power is growing. At present, many countries are harnessing this energy to generate electricity. Referring to the latest information and related pictures, he explained the present situations in countries such as Costa Rica, El Salvador, Ethiopia, France, Guatemala, Kenya, Mexico, Nicaragua, Portugal, Thailand, and Turkey. He also touched on some important global trends in this field which include the increasing competitiveness of geothermal energy due to the recent sharp increase in oil price and the need for environmentally friendly energy to reduce the emission of green house gases; privatization of geothermal power generating institutions; and the growing demand for renewable energy in rural areas. If these global trends continue, the target installed capacity of 11,414 MW will be achieved by 2005 or a few years later.
  
  Derek H. Freeston, Professor, Geothermal Institute, Auckland University, New Zealand
  "World-wide Direct Use of Geothermal Energy 2000"
  He summarized his latest thesis to be published. In the past five years, the number of countries which are directly utilizing geothermal energy has increased from 31 to 55, more than 1,000 geothermal wells have been newly drilled, and direct investment exceeded 841 million US dollars. The growth of the number of countries utilizing geothermal energy is attributed especially to the remarkable increase in installed capacity in China, Iceland and the US. He also listed examples of geothermal use. Among them were heating of greenhouses in Russia and Hungary, industrial use in New Zealand and China, space heating in China, Iceland and Turkey, and geothermal heat pumps in the US, Sweden and Switzerland. He concluded by asking the participants for their opinions and for data as he required more data to finalize his thesis.


Plenary Session 3: Competitive Status of Geothermal in the 21st Century
  At the start of the session, the prestigious Gtv Patricius Award was presented to the convenor, Ingvar B. Fridleifsson, Director, United Nations University Geothermal Training Programme, Orkustofnun, Iceland by Ladislaus Rybach, Chairman of OC for WGC2000

  
Kuniyoshi Ishii, President, Nishinippon Environmental Energy, Japan
  "Prospect of Japanese Geothermal Energy in the 21st Century"
  Although the nation has vast geothermal resources, total installed capacity is now 533 MW, only 1% of the power generation capacity in Japan, because geothermal energy is not economical as compared to such large-scale generation facilities as nuclear or thermal power plants.
  The most important factor to improve cost effectiveness is to squeeze out as much as possible from one well to decrease costs. Currently, only new wells continue to supply energy but even these have a lifespan of only about seven years. Thus it is imperative that production wells be completed so that they can supply steady, high quality geothermal fluid for as long as possible. For this, further development is called for in exploration, drilling, and reservoir management technologies.
  
  Harro Pitkanen, Managing Director, the Nordic Environment Finance Corporation, Finland
  "Financing of Geothermal Projects"
  From the financier's point of view, there is no difference between financing a geothermal exploration and other projects as they are all assessed in the same manner. The difference lies in the risk/reward aspects. Therefore, when the investment is for a non-high profile project, it is only natural that financiers worry. As such, more information about geothermal energy needs to be disseminated.
  Besides this, geothermal projects are capital-intensive and some costs are difficult to predict accurately. Thus financiers need to be shown that geothermal energy is competitive as regards price with other energy sources.
  Other factors which might inhibit investment are locational factors such as the source being in places where demand for electricity is low and geological risks which includethe area's susceptibility to natural disasters, thus affecting its long-term sustainability.
  Thus it is important that financiers are made to see beyond the burden of high initial investment costs to the advantages of low operating costs, i.e. the full life cycle of a project when comparing different alternatives.
  Developers should also look into alternate funding such as the Prototype Carbon Fund managed by the World Bank as a possible source for soft financing of geothermal projects.
  
  Valgardur Stefansson, Chief Project Manager, Orkustofnun, Iceland
  "Competitive Status of Geothermal Energy in the 21st Century"
  Available geothermal resources allows for worldwide increase of geothermal use by a factor of 100. Energy price and environmental impacts will have the largest influence on the competitive status of geothermal energy in the 21st century.
  The current status of geothermal use as an energy form is only 0.2% of the world's potential despite the fact that the size of geothermal resource is similar in size to that of hydropower and that the former has the capacity to generate as much electrical energy as is currently generated by energy sources around the world.
  In order to gauge the competitiveness of geothermal energy in terms of price, there is a need to look at each country separately as energy prices differ mainly due to varying tax levels. In areas such as drilling cost and production cost, the same can be said as costs differ according to location.
  What can be said is that the most important issue for future of geothermal development is to take advantage of the economical competitiveness of geothermal energy. In this, subsidiary and negative taxes on geothermal energy will hamper and delay the development of this energy source.
  
  Lucien Y. Bronicki, President, Ormat, USA
  "Effective Use of Low and High Enthalpy Resources"
  The advantages of geothermal energy is that it is independent of climate influence and the cost of electricity is competitive with other energy sources. Currently the steam cycle is the most successful and the system continues to be improved as a competitive and reliable energy source. What is important is not to concentrate on one aspect but to keep the entire life cycle of the entire system in mind.
  Low-temperature resources are a still barely untapped resource. However, this and high-temperature resources are not yet high profile and researchers and developers need to constantly prove that they are to the world at large. There is therefore a need for more continued improvements which will lead to extension of applications, which will in turn widen site choices.
  
  James Koenig, Former President, Geothermal EX, USA
  "Emerging Issues in Geothermal Project Development and Finance"
  Geothermal energy is a risky investment made the more riskier because of risks such as drilling in unexplored areas. Thus there is a strong reluctance on the part of banks and the UN to finance this energy development. Meanwhile, there is also country risk with multilateral agencies coming under increasing pressure not to make loans to countries perceived to be corrupt, have excessive red tape, among others.
  What then can be done? Some answers are to obtain maximum value out of "green" energy subsidies and thereby reduce cost; operate facilities already in production efficiently to help attract investors; develop previously discovered but still undeveloped fields thereby minimizing exploration risk; identify and serve "niche" markets such as islands not attractive to large-scale developers. But the major challenges facing the geothermal industry is the need to convince financial institutions that geothermal power is a safe and profitable investment and obtain access to the market for electriciy.

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