Croatian Geothermal Potential and Existing Regulatory Framework

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Croatian Geothermal Potential and Existing Regulatory Framework CROATIAN GEOTHERMAL POTENTIAL AND EXISTING REGULATORY FRAMEWORK Croatian Hydrocarbon Agency Marijan Krpan, CEO IGC Invest GeothermalOnline Meeting 17 November 2020 Established in 2014 by the Government of the Republic of Croatia and Promotion of activities related to: • Hydrocarbons • Geothermal Waters for Energy Purpose WHO WE ARE • Underground Gas Storage • Carbon Capture and Storage • Compulsory Stocks of Oil and Petroleum Products Participation in all activities related to the licensing round(s) procedure. 2 PANNONIAN AREA OF CROATIA AS GEOTHERMAL REGION • Region with high potential for the production of geothermal water for energy purpose (electrical and heat energy) according to data from deep exploration wells in the Croatian part of Pannonian basin • Geothermal potential has been proven in cca 200 wells • Above-average high geothermal gradient (mean geothermal gradient of Pannonian area of Croatia) is 60 % higher than the European average Map of Temperature of pre-Neogene Basement GENERAL LITOSTRATIGRAPHIC COLUMN ▪ General litostratigraphic column is GEOTHERMAL GRADIENT made according to gather knowledge Temperature (°C) 0 50 100 150 200 250 Pče-1A of litological features of sediments 0 from deep wells with proven Kop-1 Kot-1 geothermal potential Kot-2 1000 Kot-2A ▪ Geothermal potential can be defined Kot-3 in four plays regarding its lithology Leg-1 2000 and evolution phase of Pannonian Leg-1Ju (m) Leg-3 basin 1F-Du Depth 3000 F-8 Post-rift clastic play Kt-1 Kt-2 Lun-1 Syn-rift carbonates and clastic play 4000 Drk-1 Ern-3 Pre-rift carbonates play 5000 Mar-1 Mar-1 Mar-3 Pre-rift magmatic-metamorphic play 6000 4 VIRTUAL DATA ROOM Type of Documents for wells (PDF files): 191 KEY WELLS (reviewing in web browser) CHA • Geological final report • 71 Related to electricity potential • Stratigraphic report • Master log, Composite log • 120 Related for heating potential VIRTUAL DATA ROOM • Final drilling report • Well prognosis ArcReader projects with spatial • Water analysis Available Geological & Gephysical Data • Salinity report data related with geothermal • DST testing results potential in Croatia • Chemical rock analysis • CBL analysis 6 VIRTUAL DATA ROOM Data room covers geotechnical data of Pannonian Basin Two connections: - wells and Gis - seismic, wells and GIS. Available data: · 2D and 3D seismic data outside of hydrocarbon exploitation fields can be viewed in IHS Kingdom software · Key wells reports (pdf, tiff) could be viewed via separate application (including testing reports) · All supported culture data such as geothermal gradient map, structural elements, topography, excluded areas etc. can be viewed in IHS Kingdom software Access to the virtual data room can last up to 10 days Please apply to: [email protected] and/or [email protected] DATA ROOM FOR GEOTHERMAL IS FREE OF CHARGE! NOTE: It is mandatory to sign Confidentiality Agreement ! CURRENT ACTIVITIES OF EXPLORATION & EXPLOITATION OF GEOTHERMAL WATERS 4 EXPLOATATION FIELDS 10 EXPLORATION BLOCKS 4 EXPLORATION BLOCKS *Bidding Round ended 1st Sept 2020 *In preparation 3 EXPLORATION BLOCKS Exploration Blocks and Exploitation Fields of Geothermal Waters in Croatian part of Pannonian Basin 8 REVIVAL OF EXPLORATION ACTIVITIES FOR GEOTHERMAL WATERS New Exploration Blocks (4) Exploration Fields (4) Exploration Blocks (2) in ended Bidding Round (03/06/2020 – 01/09/2020) Bizovac Slatina 2 GT Ivanić Slatina 3 Ernestinovo Draškovec AATG Legrad-1 Velika Ciglena – since 2018 Lunjkovec-Kutnjak Merhatovec 2019/ 2020 2020 2018 Exploration Blocks (5) with issued Exploration Blocks (3) Exploration Licences New Exploration Blocks Bošnjaci sjever – In Preperation (3) Geotermalno polje Zagreb Ferdinandovac-1 Sveta Nedjelja Babina Greda 1 Babina Greda 2 Kotoriba Karlovac 1 Pčelić Križevci Virovitica 2 9 191 KEY WELLS – SIGNIFICANTLY REDUCED GEOLOGICAL RISK due to comprehensive database (exploration wells) (well, geological, sesimic data) • Geological final report • Stratigraphic report • Core analysis • Micro/macropetrographic analysis (from cores samples and drill cutting samples) • Micropaleontological analysis (from cores samples and drill cutting samples) • Master log, Composite log • CBL analysis • Final drilling report • Production testing results • Hydrodynamic measurement analysis • Water analysis • Salinity reports • 2D (23.460 km) and 3D (3.000 km2) seismic data SIGNIFICANTLY REDUCED LOW CAPEX GEOLOGICAL RISK & • Reduced geological risk due to comprehensive database LOW CAPEX • 70 % of exploration wells are temporarily abandoned (Re-use option!!) 1 0 TESTING RESULTS OF EXPLORATION WELLS * Well logging temperature measured at the bottom of well (Tlog) 11 PRELIMINARY ASSESSMENT OF GEOTHERMAL POTENTIALS PRELIMINARY ASSESSMENT OF GEOTHERMAL POTENTIAL ▪ Based on evaluation of geological, well, geophysical and seismic data ▪ 75 blocks of geothermal potential have been delineated: • 32 blocks for electricity generation (for 4 rounded blocks – issued exploration licences for geothermal waters) • 43 blocks for heat generation ALL DATA IS AVAILABLE IN PHYSICAL AND VIRTUAL DATA ROOM ADDITIONAL EXISITING GEOTHERMAL POTENTIAL ▪ Targets: carbonate and clastic reservoirs of oil and gas fields (after its depletion) with (T more than 120⁰ C (deeper aquifers)) ▪ After oil and gas fields depletion - profitable exploitation of geothermal waters ▪ Examples O&G fields with geothermal Geothermal Potentials for Energy Purpose potential: Molve, Kalinovac, Beničanci etc. 12 OVERVIEW OF ACQUIRING RIGHTS ON MARKET PREMIUM IN GEOTHERMAL ENERGY Preliminary Location Construction Construction of Operating Permit EXPLORATION ACTIVITIES Plan Permit Permit Facility /Plant Agreement on the Energy Reserves Electricity Consent Agreement on Acquiring the status Acquiring the Production Approval study Market of an eligible rights on Market of Geothermal Waters Premium electricity producer Premium Network Connection Agreement Permit for performing energy activity MESD - Ministry of Economy and Sustainable Development (MINGOR) MINGOR – MESD HOPS - CTSO <40% TOTAL INVESTMENT CTSO - Croatian Transmission System Opetator (HOPS) ARE PETROLEUM OPERATIONS CEMO - Croatian Energy Market Operator (HROTE) HROTE - CEMO HERA - CERA CERA - Croatian Energy Regulatory Agency (HERA) 13 2 types of Renewable Quotas for Public tender for incentives for Text Here power market geothermal premium award renewables energy Legal regulation The law envisages 2 possibilities, Regulation on quotas Conducted by Croatian Energy within defined quota: Market Operator (HROTE) by Law on Renewable Energy for stimulating the Sources and High-Efficiency 1) Incentive premium for production of electricity TENDER STEPS: Cogeneration and its by-laws projects greater than 500 kW from renewable energy 1) "Reference price of electricity" is defined for each of installed capacity sources and high-efficiency each type of renewables 2) Feed-in tariff system for cogeneration covers the 2) A public tender is held for the award of a the projects bellow 500kW period from 2020 to 2022 – premium within a defined quota (protecting small investors ie. quotas for geothermal 3) The most favorable bidder (with the lowest households) energy is 20 MW* production price) have to acquire the status of an eligible electricity producer and CROATIAN conclude a power purchase agreement with HROTE on the payment of a premium for 12 years ENERGY 4) Electricity producers enter a contract for the sale of electricity on the market with LEGISLATION authorized market participants (suppliers, stock exchange and others) 14 CONCLUSION There is a lot of undiscovered geothermal potential with estimation of more than 800 MW, thus since the end of 2018, Croatian Hydrocarbon Agency has launched activities related with issuing new exploration licenses The actual achieved results • First geothermal plant Velika 1 in Velika Ciglena – 10 MWe (brutto 16,5 MWe) • The one of kind geothermal power plant in Croatia and European Union In Law on Exploration and Production of Hydrocarbons (OG, No. 52/18, 52/19) and its by- laws all procedure of tender and issuing licence for exploration and exploitation geothermal waters for energy purpose is explained in detail Ministry of Economy and Sustainable Development and Croatian Hydrocabon Agency, as state institutions, together with the Government of the Republic of Croatia, support the investors in investing in projects related to geothermal energy, as well as solving all possible uncertainties 15 VELIKA CIGLENA Successful story Velika 1 - First geothermal plant (ORC) in Croatia 10 MW (16.5 MW bruto) Exploitation Field „Velika Ciglena” .
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