Geothermal Green Bond Certification: Challenges in Investment Screen Criteria Development Using Global Geothermal Carbon Dioxide Emissions Rates

Abstract

Geothermal project development is often hampered by the availability of funding, particularly at stages of exploration prior to confirmation drilling. However, the increasing investor appetite for sustainability-related financial instruments has introduced demand for "green bonds." If geothermal projects can sufficiently meet these sustainability-related investment criteria, geothermal developers may have increased access to funding in the bond market – including large financiers. Geothermal projects are often touted as climate-friendly because the greenhouse gas (GHG) emissions released from the stack are the naturally-occurring noncondensable gases from within the geothermal reservoir. However, these emissions often qualify as anthropogenic under international GHG accounting standards - particularly when project GHG emissions are related to the production of brine itself. As a result, the “greenness” of a geothermal project may hinge on the ability to accurately estimate a reservoir’s emissions rate – and the technology appropriate for the project. This work briefly reviews current and upcoming attempts to define criteria that qualify a project to be issued as a green bond, which are critical to providing standard, transparent disclosures for investors. This work sets forth a review of the distribution of carbon dioxide (CO2) emissions from operational international power plants to characterize the potential variance in project emissions that developers may face. Secondly, this work discusses the challenges seen in developing a multi-stage “green” screen for geothermal projects. Future work plans to advance an understanding of emissions variability by categorizing reservoir GHG signatures by geothermal system type.