Study on Geothermal Power Development in OO Peru 목 차
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Study on Geothermal Power Development in OO Peru 목 차 Executive Summary 1. Overview of the Host Country and Sector 2. Study Methodology 3. Justification, Objectives, and Technical Feasibility of the Project 4. Evaluation of Environmental and Social Impacts 5. Financial and Economic Evaluation 6. Planned Project Schedule 7. Implementing Organizations 8. Technical Advantages of Japanese Companies Executive Summary (1) Background and Necessity of the project The total installed capacity of power plant facilities of Peru in 2010 is 7,309 MW, and a growth of 8.1% per annum is expected for the 2009-2018 power demand. Peruvian government has established the “Energy Efficient Use Promotion Law (Law 27 345, 2000) " for the purpose of development of renewable energy and energy saving and conservation promotions. The "Sub-regulations on renewable energy power generation" put into force in 2008 defines implementation of the bidding of the renewable energy business and the target value of the renewable energy (It is updated every five years. The goal of five-years term from 2009 to 2013 is 5% of the total power. The target value of the succeeding term is under study). There are expectations for the development of geothermal resources which are abundant (available potential resources of more than 3,000 MW). To seek possibility of such expectations, Pre F/S surveys of geothermal development were implemented by Japan Bank for International Cooperation (JBIC) (2008) and Japan External Trade Organization (JETRO) (2008), and a master plan study has been implemented by Japan International Cooperation Agency (Agencia de Cooperación Internacional del Japón: JICA) (2012) until now. However subsequent development has not progressed because of various constraints and problems of institutions and legislations. Hence, the geothermal power plant does not yet exist in the country. As an activity of Japanese Business Alliance for Smart Energy Worldwide Geothermal Working Group, Latin America sub-working group, the study team sent two missions to Peru to exchange views with related organizations, gather information and survey the project site in September 2012 and March 2013. Through these activities, the following issues were confirmed: 1) State-owned power company Electroperu,S.A. (EP) has come to have a strong desire of implementing the first geothermal power generation project and for such purpose, wishes to obtain the support of the Peruvian government and expects the entry of Japanese companies as well as the participation of Peruvian governmental sectors, 2) There will be expectation for Japanese companies to have future opportunities to join geothermal development in the country, 3) Geothermal development in the country is expected to advance the progress of rural electrification and economic development, and furthermore, an increase in power demand can be expected by mining development in the province. In October 2012, OO. OOO, the Minister of Energy and Mines, instructed EP to consider the studies on geothermal development projects. From the circumstances described above, what we are proposing is a geothermal generation project in Calientes, OO Region in southern Peru of which OO would be the implementing agency. The power demand of Peru is expected to be three to four times the current demand in the next 15 years up to 2030. Most of this demand will be covered by large-scale gas power generation using natural gas and large-scale hydroelectric power generation. The power demand of OO Region is concentrated mainly around OO city. With recent development in OO Region, the power demand in the province is increasing as similar as that in entire Peru. This increase of power demand will be covered by large-scale gas power generation plants (500 MW, 2 plants) which are planned in the neighboring province, and a 500 kV transmission line between Lima and OO Region. The geothermal power plant, to be constructed by this project, produces less electricity compared with the above large-scale gas power generation plants so it is difficult to obtain the generation capacity which can meet the increase of power demand. However it is expected to cover the local power demand which is originated by copper and other mine operators around Candarave. The mines and refineries they operate require a large amount of electricity which is mainly generated by their own power plants. Thus, the local power demand can be covered by transmitting electricity to the copper mines from new geothermal plant to be constructed by this project, and it has another advantage for power companies to stabilizing the power supply and reducing transmission loss. In addition, it is possible to ensure FIRR (Financial Internal Rate of Return) of 12% or more at revenue of 0.045 USD per kWh if preferential terms of Japanese Yen Loan is used. The key to the realization of the project is this yen loan. (2) Basic Design for Determination of Project Contents Peru holds the leading position among the geothermal promising countries of the world. However, despite the above mentioned advantage, Peru so far has not built any nor shown signs of building geothermal power plants. This is because of Peru's preference for implementation by private companies which will continue to be the obstacle for geothermal power generation. Many geothermally developed countries also had similar problems in the past, but they received public funds for geothermal development at the initial stage of the project to reduce resource risk effect. For example, in countries such as Costa Rica, the Philippines, Indonesia, and Mexico, their first geothermal power generation projects were implemented with yen loan fund and thereafter they successfully obtained funds of private sector and other donors for the following projects. There is no reason why Peru cannot implement geothermal power generation project in the same manner as above which will be the bridgehead for such projects of full-scale. In addition, as the first successful geothermal project in South America, a ripple effect is also expected on neighboring countries with geothermal potential. In the meantime, EP, the national electric company, has expressed strong willingness to conduct the first geothermal development project as operator with the support of the government of Peru, for the purpose of making a breakthrough in the current stagnating situation. Peru’s technology and management capacity for geothermal development will be advanced if EP conducts its own geothermal development project. This will cause reviewing and revising of present geothermal laws and regulations (in terms of application for project implementation and environment and incentives for geothermal development). Furthermore, it would be a model case for promoting private operators to enter the geothermal business and finally is expected to promote geothermal development projects among private operators. (3) Abstract of the Project 1) Basic Design for Determination of Project Contents a)Selection of Project Area The Calientes geothermal area was inspected by JBIC (2008) and JETRO (2008) together with Borateras geothermal area, and confirmed as high-potential areas for geothermal development. On the other hand, OO Region designated those geothermal-prone areas as conserved area in 2008. Therefore, those two areas were not yet considered as concession area and geothermal development was not planned there. Then, Peru selected this area to be studied as geothermal development areas to be funded by Japanese Yen Loan, through the discussions between Latin America sub-working group and the Peruvian government, in 2012 and 2013. b)Project Implementation Organizations The number one candidate organization for project implementation is EP, which is the national electric company conducting power production in Peru. Practically, EP is the only organization who is eligible to be the implementing party of a Japanese Yen Loan project and EP's playing such role is the key to the materialization of this project. The Ministry of Energy and Mines (Ministerio de Energia y Minas: MEM) and Institute of Mining and Metallurgical Geology (Instituto Geológico Minero y Metalúrgico: INGEMMET) are ministry and agency related to the project promotion. INGEMMET will provide geological information and technical support. MEM will control the rights and approvals. c)Project Implementation Period From 2014 to 2023 d)Determination of Output Capacity According to JBIC (2008), the total geothermal resource of the area was evaluated as approximately 100 MW. This project will be the first step of the development in the said area and an output capacity of 50 MW would be appropriate to start with. This output capacity will be reviewed and revised by future study. e)Transmission Line to be connected to Main Power Grid Generated power will be connected to the 128 kV electrical power transmission line, and transferred to OO Region, mainly Candarave Province. The main electrical power transmission line will be constructed from Lima to OO and if it is completed before this project, it can connect to the geothermal power plant. 2) Actions to be taken by the Project Proponent in Peru for the Project Implementation a)Preparation of Environmental Impact Report for Application of Geothermal Right based on Geothermal Resource Law As per the Articles 12 and 21 of Geothermal Resources Implementation Regulations (Nuevo Reglamento de la Ley No.26848, Ley Organica de Recursos Geotermicos: D.S.No.019-2010-EM), the project implementing party must submit a