Geothermal – Opportunities to Support Delivering the Energy for the Future

Abstract

Opportunities to deliver geothermal energy projects require a strong and well managed approach in order to unlock the potential for this long term sustainable energy resource. Successful geothermal developers have recognised that expertise in exploration, development and sustainable management of reservoirs must be combined with comprehensive risk management, a procurement approach seeking the maximum performance and best total cost of ownership based on economic fundamentals and sound and focused project delivery disciplines.

Key success factors related to the procurement and project delivery of geothermal developments include:
• Internal organisational or contracted in expertise in exploration, development and sustainable management of reservoirs in order to manage risks and achieve the required performance.
• Ability to manage the development risk either by balance sheet funding or project finance has implications for the procurement model employed and the financial backing required for geothermal exploration, development and ongoing operations.
• Best total cost of ownership (life cycle) economic performance is achieved through specification, design and constructing for station operability and maintainability, while matching the most economically efficient technology available to the geothermal resource and the capacity proven at the time of project commitment.
• Procurement and project delivery disciplines and the careful selection of project participants and incorporation of incentives and penalties provides a level playing field for competitive technologies, energy delivery, the shortest possible project construction time and achieving the required performance and quality specification.
• Effective organisational and project leadership for developing significant infrastructure projects in line with the above, particularly in managing multiple stakeholder interests, contributions from external and internal experts, the challenge of managing and developing organisational capability in the midst of project delivery, collaboration of virtual teams working in different locations or time zones. Real success may be gauged not only by the outcomes of the individual project, but in the track record achieved, the attraction of world class expertise and the organisational development and learning that is developed over time.

By a wholistic consideration of economic value, focused on managing risk and matching the project procurement and delivery approach to the geothermal resource, significant economic value is unlocked by development projects. This paper provides case studies from NZ (Mighty River Power’s Kawerau, Nga Awa Purua and Ngatamariki geothermal power station developments) and international geothermal developments to illustrate the potential opportunities and risk mitigation strategies in procurement and project delivery of the energy of the future.