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GSR 2015

50 02 MARKET AND INDUSTRY TRENDS geothermal capacity in Indonesia has been held back by several barriers, including fossil fuel subsidies in power generation and unsustainably low payments for geothermal power in recent years.17 Restrictions on projects in protected forest areas, nature reserves, and national parks may have played a role as well; at the same time, the industry acknowledges the need to protect the forest environment and hydrology to sustain geothermal installations.18 To simplify the complex licensing requirements for developing Indonesia’s 29 GW of potential, a new law was enacted in 2014 to consolidate licensing under the central government and to institute new pricing rules. The law also reclassified geothermal development as outside the scope of mining activity, thereby lifting restrictions on developing fields within forest conservation areas, but also requiring developers to share revenues with local communities.19 After successful testing and grid-connection in 2013, the Philippines began commercial operations at the 20 MW Maibarara geothermal power plant in early 2014.20 Later in the year, the 49.4 MW Nasulo facility was inaugurated, raising the country’s total capacity to about 1.9 GW.21 The Renewable Energy Act of 2008 is considered instrumental in paving the way for recent and ongoing geothermal development, in part by making investment more attractive.22 In Italy, two 20 MW units at the Bagnore 4 plant were operating by year’s end. The plant joined forces with the 17-year-old 20 MW Bagnore 3 at Mt. Amiata in Tuscany.23 Germany brought several geothermal co-generation plants on line in Bavaria, all producing power and heat, for a total addition of 18 MW/51 MWth.24 The United States and Japan each added a handful of binary units of 2 MW or less.25 Japan has the third largest geothermal potential in the world, after the United States and Indonesia, but it ranks only eighth in power generation, as little new capacity growth has occurred for two decades. However, government support for geothermal power has increased since the 2011 nuclear disaster, and, as a result, industry had over 40 exploration and development projects running in 2014.26 The166MWTeMihiplantwascompletedinNewZealandin2013 and was counted among additions for 2013 (p See GSR 2014.), although this plant was not officially delivered until 2014.27 Its two 83 MW Toshiba turbines replaced some existing capacity at the old Wairakei field for a net increase of approximately 115 MW.28 There is great anticipation for expanded geothermal activity in East Africa, beyond Kenya. Ethiopia hopes to overcome structural barriers and lack of funding to exploit its geothermal resources to meet rapidly growing electricity demand.29 Recently, Icelandic and Japanese development agencies have provided assistance for new geothermal plans in Ethiopia, but development has been slow, due not only to high upfront costs and project risk but also to limited local technological capacity.30 In 2014, the World Bank committed USD 200 million in funding for development of Ethiopia’s Aluto and Alalobad geothermal sites.31 In Djibouti, international development agencies are helping to re-launch exploration and development, including a 50 MW development in the Asal-Fiale field.32 The Central American market also shows promise.33 Honduras continued development of the Platanares geothermal site in 2014 with the aim of producing power by 2016.34 In Costa Rica, construction is under way to expand capacity at the Las Pailas plant with an additional 55 MW.35 Geothermal direct use refers to direct thermal extraction for heating and cooling, excluding heat pumps.i Geothermal direct use stood at an estimated 263 PJ in 2014 (73 TWh). An estimated 1.1 GWth was added in 2014, for a total capacity of 20.4 GWth.36 Over the past five years, the average annualised growth in direct use capacity has been 5.9%, while the average annualised growth in direct heat consumption has been 3.3%. The average global capacity factor (utilisation) for direct geothermal heat plants was an estimated 41% in 2014.37 The single largest direct use sector is estimated to be swimming pools and other public baths (9.1 GWth of capacity, and 33.2 TWh of use); however, this category is difficult to quantify due to differences in methods of operation.38 The second largest sector is space heating, including district heat networks (7.6 GWth; 24.5 TWh). Market penetration can be very high in locations where resources are particularly plentiful and where district heat systems are well developed, such as Iceland, where nine out of ten buildings rely on direct geothermal heat.39 Other uses include domestic hot water supply, greenhouse heating, industrial process heat, aquaculture, snow melting, and agricultural drying.40 Much of the thermal activity during the year took place in Europe, including some district heat schemes in countries that have relatively few traditional high-temperature resources.41 Italy saw completion of two small thermal plants: a 6.5 MWth installation in Tuscany and a 0.7 MWth installation in Vicenza.42 In addition, Germany completed the two co-generation plants noted above, Hungary completed two new facilities (2 and 3 MWth respectively), and France advanced development of a 10 MWth plant in Arcueil-Gentilly, near Paris.43 Drilling for the Paris basin project, which combines geothermal and natural gas-derived heat, started in late 2013 and is expected to be fully completed in 2015.44 In all, there are plans for five new district heating systems in the Paris region in the near future.45 In Finland, plans are under way for a 40 MWth closed-loop district heat plant to be completed in 2016, utilising a direct heat exchanger.46 The countries with the largest geothermal direct use capacity at the end of 2014 were China (6.1 GWth), Turkey (2.8 GWth), Japan (2.1 GWth), Iceland (2.0 GWth), India (1.0 GWth), Hungary (0.9 GWth), Italy (0.8 GWth), and the United States (0.6 GWth). Together, these eight countries account for about 80% of global capacity.47 In line with installed capacity, China utilised the largest amount of direct geothermal heat (20.6 TWh). Other top users of direct geothermal heat are Turkey (12.2 TWh), Iceland (7.4 TWh), Japan (7.1 TWh), Hungary (2.7 TWh), the United States (2.6 TWh), and New Zealand (2.4 TWh). These countries accounted for approximately 70% of direct geothermal use in 2014. On a per capita basis, direct use is by far most significant in Iceland, at 22 MWh per person each year, followed by New Zealand, Hungary, Turkey, and Japan, all at 0.5 MWh per person or less.48 i - Direct use refers here to deep geothermal resources, irrespective of scale, as distinct from shallow geothermal resource utilisation, specifically ground- source heat pumps. (See heat pumps discussed in Sidebar 4 of GSR 2014.)

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