Lessons Learnt from Geothermal-Friendly Regulatory Frameworks in Iceland, Kenya, New Zealand, Philippines and the United States of America

Abstract

In some countries geothermal energy development advances quickly, while in others structural or policy challenges hinder the development of the indigenous geothermal resources. This article aims at highlighting some key features of successful national strategies. Best practice policies and other incentive schemes of five countries are presented (Iceland, Kenya, New Zealand, Philippines, USA). The outcome of the research is intended to be used to advise decision-makers in governments and international organizations. The findings concentrate on geothermal power generation; geothermal heating and cooling are not analyzed in this paper. Key successful strategies identified include clear targets for geothermal in national legislation, resource use rights also for foreign investors, governmental incentive schemes such as cost sharing of exploration costs or grants, fair market prices which guarantee a secure rate of return, a clear institutional and regulatory set-up, i.e. a “one stop shop” with designated tasks and mandates, risk mitigation schemes, protection against currency risks and force majeure and strong strategic support from the government.