Geothermal Direct Use for a Crop Drying Center in Costa Rica
Implemented by In cooperation with Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Registered offices Bonn and Eschborn, Germany
“Promotion of Geothermal Energy in Central America (Geo I)” GIZ Office San Salvador Boulevard Orden de Malta, Casa de la Cooperación Alemana, Urbanización Santa Elena, La Libertad, El Salvador, Central America T +503 2121-5145 F +503 2121-5101
E [email protected] I https: https://www.giz.de/en/worldwide/78071.html I www.sica.int/energias4e/
As of September 2020
Authors Helen S. Carpenter Based on the feasibility study conducted by: Mauricio Muñoz, Sofia Vargas Centro de Excelencia en Geotermia de los Andes CEGA
Editing Isabel von Griesheim, Max Fernandez, Ana Lucía Alfaro and Karla Hernandez (GIZ)
GIZ is responsible for the content of this publication On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ)
Design and layout Plasmático Media Lab (Consultant), Karla Hernandez and Neimy Giron (GIZ)
Photo credits Marco Entchev (GIZ)
2 73% of the electrical energy production in Central America is produced with renewable energy sources. From that, 5.2% is provided by geothermal energy.
Source: ECLAC 2018.
3 This summary presents findings from research on the technical, economic, and social feasibility of developing a geothermal direct use pilot project in Costa Rica. The research took place from 2018 to 2019 and forms part of the regional project “Promotion of Geothermal Energy in Central America (Geo I)” (2016-2020), which was implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on Executive behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The objective Summary was to provide technical support as well as incentives to invest in geothermal energy in Central America. The main counterpart on the project was the Central American System for Regional Integration (SICA). The technical support from GIZ will continue in a second phase that focuses on geothermal heat processes in Central American industry (2020-2023).
For the project described here, GIZ consulted the Costa Rican Institute of Electricity (ICE), collected data and information, and established relationships with potential stakeholders. In 2018, GIZ commissioned the Andean Geothermal Center of Excellence (CEGA) to research the feasibility of developing a direct use project. The local community supported the initiative, welcoming a plan to create the country’s first direct use geothermal crop drying facility.
The geothermal energy resources of interest, part of the Dr. Alfredo Mainieri Protti Geothermal Field in Miravalles, are a strong asset for the surrounding community. In the canton of Bagaces and in nearby municipalities, access to crop drying and storage facilities that use geothermal heat could improve farmers’ production and profits. Tapping into the infrastructure already in place for the Miravalles geothermal power plants can help producers dry and store their harvest, thus gaining time and growing income, all while learning about geothermal energy. A drying and storage center based on direct use of geothermal energy not only keeps carbon emissions low, it can also promote sustainable community development.
Cooling Tower at “Alfredo Mainieri Protti” Geothermal Field/ Miravalles V
4 Benefits of a drying center
Understanding energy needs: an empathy based- approach to design sustainable energy solutions using the geothermal resource for a grain drying station.
The first of its kind in Costa Rica, the proposed area, so the proposed project fills an important geothermal drying center will dry, store, and gap for local producers. The use of geothermal commercialize crops and create jobs. GIZ researched energy reduces drying time considerably without the project’s feasibility in terms of costs, risks, and fossil fuels and thus avoids emitting carbon. At the opportunities, and technical, social, and economic same time, the technification of the drying process requirements. The result of careful planning, the stabilizes and optimizes product quality regardless drying center includes an initial pilot phase, where of weather conditions, which makes the direct use the project will focus on onions, rice, beans, and of geothermal energy a valuable anecdote to the corn—crops with the highest potential for steady unreliable drying and storage conditions associated and profitable sales. Over time, new crops may be with climate change. added. There are no other drying centers in the
5 An innovation that improves the local economy
Field trip and interview with local cocoa producer, another possible beneficiary of the geothermal-powered drying station.
The drying center can build the local economy Because many producers are selling the same crops in important ways. For example, a drying center at the same time, there is competition and prices can help producers increase the quantity of goods decline. After selling the harvest, producers must that they bring to the market. Currently, producers budget wisely or find another source of income. dry crops naturally on fields or in homemade Access to a drying center can change all of this. artisan facilities, a process where they can lose approximately 10 % to 50 % of their harvest due to Using dryers, producers can preserve more of their damage from sources such as rain, mold, and pests. crops and do so at a faster rate, decreasing the time it To mitigate this loss, they typically sell the crops takes to prepare them while increasing the quantity quickly after harvest. This means they may sell their available to sell. Producers can dry their crops soon produce after ten or more days of natural drying, in after harvest instead of leaving them in the fields. the case of onions and beans, or sometimes after They can control the amount of drying time and more than a month of drying, in the case of corn. the temperatures for drying, skillfully calibrating
6 Dryng Center Activities
| Receiving agricultural products from the field-at first, onion, rice, beans, and corn.
| Transporting produce from warehouse to either the onion drying room or the grain processing room.
| Performing a quality control check.
| Cleaning grains.
| Drying onions and grains.
| Removing husks and cleaning rice, beans, and corn.
| Performing final quality control check to discard poor quality grains.
| Packaging products with environmental or green logo in “quintals” (bags of 46 kg).
| Storing products in dedicated warehouses.
| Distributing products to consumers by transporting them to markets, public institutions, and government warehouses, or selling them directly at the warehouse.
Through the interviews, experts pointed out that one of the Figure 1. Drying center activities crops that could benefit the most out of the drying station would be beans. moisture levels, yielding reliable and dependable quality. Afterwards, producers can safely store the local economy by operating a crop processing dried crops in the warehouses, strategically saving business (Figure 1). The center will purchase crops the crops to sell later, either throughout the year at fair prices, and then dry, store, and commercialize or during specific seasons when prices are higher. them for profit. The center’s activities will The availability of crops outside of harvest time generate income to cover capital expenditures supports government objectives to supply food and operating expenses, including compensation year-round in the region and it allows producers to for ten employees. Additional financial details are have better control of their incomes. summarized below. The resulting crop processing center will sustain itself for the proposed ten In addition to providing services and facilities for years and, hopefully, serve as a local institution for producers, the drying center will add revenue to agribusiness for many years beyond.
7 Direct use of geothermal energy
Key findings pointed out that another crop that could benefit the most out of the drying station would be onions.
The proposed center will be based on direct use of Onion dryer. The center includes a 300 m2 onion geothermal energy. Specifically, the dryers and the dryer that will dry 30 tons in three days, in contrast climate-controlled warehouse will recover thermal to eight days on the field. Thermal insulation in energy from brine pumped through the reinjection the walls will reduce energy losses caused by air pipes. The dryers will use brine fluids as heat sources. renewals. The use of the onion dryer decreases brine To access the brine, engineers will tap into a pipe in temperature by an estimated 0.1 °C. the western part of the geothermal field, next to route 165 about one kilometer north of Miravalles Power Onion warehouse. The center includes a 450 m2 Stations I and II (Figure 2). The area of interest, near warehouse with full capacity of 120 tons of onions. the Miravalles volcano, has similar temperature and The warehouse temperature will be 25 °C with a mass flow of brine throughout the year. In addition, relative humidity of 65 % to 75 %. These temperature injection in this area is always under hot conditions and humidity conditions come from an absorption around 165 °C, ensuring a stable supply of heat for chiller, which will reduce the brine temperature by three dryers and an absorption chiller. The existing an estimated 0.4 °C. power plants will lose little energy from the proposed drying center; the heat reduction is minor and is Grain dryers. The center will include three bed described in more detail below. type dryers, each with a three-ton capacity, and where each is able to dry rice, beans, and corn. These The facilities that will rely on geothermal direct dryers will decrease drying time from three days to use are an onion dryer, onion warehouse, and one. When the three grain dryers run at the same grain dryers. A grain warehouse will not require time, they will reduce the brine temperature by an geothermal direct use. estimated 0.1 °C.
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Figure 2. Location of the Dr. Alfredo Mainieri Protti Geothermal Field. Base map from Google Maps.
Grain warehouse. The center will include a 270 m2 Thus, the situation in Costa Rica represents an ideal warehouse for rice, beans, and corn. This warehouse, situation for launching a geothermal pilot project. with a full capacity of 150 tons, does not require To spread awareness and to educate others, the temperature and humidity control, so it does not use center will generate a brand to highlight its unique injection brine for its operation. geothermal processes when it markets crops. Branding should help expand marketing networks Supplying heat to the dryers and the absorption chiller for those involved with the drying center. Products in the onion warehouse reduces the temperature will display an environmental or green logo to of the injection fluids by only 0.6 °C. In the interest indicate that they were processed using renewable area, the injection fluid is about 160 kg/s mass flow and clean energies, which, in this case, are direct at 165 °C, so this temperature reduction is minimal. uses of geothermal energy.
9 Initial costs and projected annual expenses and profits
View of Geothermal Well 31 at Alfredo Mainieri Protti Geothermal Field. Guanacaste, Costa Rica.
The goal is to create and operate the drying center for Profits rely on the margin between wholesale a minimum of 10 years. Start-up costs are estimated prices and farm prices as follows: onion (30.9 %), to be an initial investment of US$ 386,027 for rice (89.8 %), bean (61.9 %), and corn (13.6 %). The designing and building the center and paying staff, production level of the plant will increase gradually plus working capital of US$ 144,194 for acquiring until reaching peak production at 2,222 annual grains and onions in the first six months. Funding tons in the seventh year of operation. The center will come from bank loans, but may also come from potentially has a high profit margin. Indeed, CEGA grants, investments, and/or donations. predicted the proposed center will have a positive net present value (NPV) of US$ 1,567,839 and an internal rate of return (IRR) of 32 %.
10 Designing a geothermal drying center
GIZ Experts visited several facilities where local farmers store their grains. The local production of beans, coffee, coca, corn and onions is among the main income source of the communities surrounding Alfredo Mainieri Protti Geothermal Field in Costa Rica.
GIZ and its collaborators developed a roadmap that impact, the control system, and the schedule of will form the basis for building the drying center activities. Any studies that are required will occur at and purchasing machinery and equipment. As the this time. planning stage begins, engineers will develop a basic engineering model to (a) validate and verify the data Once design plans have been finalized, construction provided in the conceptual engineering model was can begin. To build the center, managers will hire developed based on the feasibility study, (b) provide a qualified construction company with expertise technological guarantees, and (c) determine the in building a drying center and the ability to cost of the pilot project facilities and machinery. At successfully intervene the reinjection pipe. It will this stage, developers will assess the tasks for the be important to connect the system to the thermal proposed construction and articulate the business and electric power line. Managers will also have to model more thoroughly. research and purchase machinery and equipment for the center’s operations. Operations can begin after This basic engineering model is followed by a construction has been completed. Different actions detailed engineering model that fully articulates include ensuring that the drying system continues the project. It contains detailed diagrams for functioning, training administrative and operational construction, equipment, electrical facilities, teams, monitoring the operation, and consolidating management of suppliers, costs, procurement of the supply chain management. equipment, economic evaluation, environmental
11 The governance structure for operating the drying center
A coalition of stakeholders will participate in engagement and then serve as guides for the new developing and operating the drying center. At the stakeholders who begin to contribute to the project. onset, a governing board of key stakeholders must From the design and construction phase onwards, be established, and the project managers must be as many stakeholders as possible should attend identified. The next step is to engage additional workshops and field trips to the site to address stakeholders who can broaden the project’s reach. possible construction and operation challenges. During the planning phase, the main stakeholders Informed, cohesive leadership will contribute to the should attend workshops and seminars to cement project’s overall success.
Through the interviews the experts were able to find a governance structure that suited the nature of the different organizations involved in the project and a sustainable business model.
12 There is both enthusiasm and support for the center, which will call on the knowledge and skills of local experts while opening doors for others through processing services, employment, and training opportunities. The feasibility study indicated that the Costa Rican Electricity Institute (ICE) is the most important decision maker for the project. Additional stakeholders and their potential roles were identified based on the scope, mission, and vision of each group. They are as follows:
The Costa Rican Institute of Electricity (ICE) is a state-owned company that provides electricity and telecommunication services in Costa Rica. ICE will serve on the Board of Directors and provide the geothermal resource for the project. They will also provide real estate for building facilities and machines for the project and technical assistance for the project design and construction. They will support the project in obtaining financing.
The Rural Development Institute (INDER) is a national public institution responsible for leading Costa Rican rural community development and executing the rural development policies. INDER will serve on the Board, provide funding for facilities and machines, provide management and training to Stakeholders establish strategies for agricultural production at the drying center, and provide options for project managers to obtain loans. Individual meetings and group meetings were held in order to collect data and experiences that would The National Production Council (CNP) is a later reflect in the proposed governance structure national public institution that promotes and and business model for the drying center. encourages agricultural production activities. CNP will serve on the Board, provide commercialization constituted to provide drying services. They will channels, and provide technical assistance for serve on the Board and manage the project. They construction and management of the project. will create and manage purchase contracts with local crop producers and create and manage sales The Bagaces Municipality is the most important contracts with wholesalers and retailers. local authority. They will serve on the Board, engage stakeholders throughout project development, Ciudadanía Activa Foundation is a non- provide commercialization channels, provide governmental, non-profit organization (NGO) support to the project to obtain financing, and with experience in strategic planning processes, support a communication channel between project and formulating, implementing, and monitoring managers, local producers, and main stakeholders. social and production projects, while the Instituto Nacional de Fomento Cooperativo is a public Association of Women Farmers of Guayabo institution responsible for promoting and developing is a cooperative formed by Bagaces citizens and cooperatives in Costa Rica. Together these groups
13 will help empower the project managers, improve The Ministry of Environment and Energy (MINAE) their capabilities, and carry out follow-up strategies is the institution responsible for managing Costa for project implementation. Rica’s natural and energy resources to protect the environment. MINAE will engage stakeholders Integral Agricultural Marketing Program (PIMA) throughout project development, create and modify is a public institution that provides marketing public policies, promote implementation and and marketing services for the strengthening of replicability of the project, and provide support for agricultural businesses with standards of customer obtaining financing for the project. service. PIMA will provide a sales area in the Llanos de Miravalles is a cooperative of agricultural Chorotega Regional Market. producers from the canton of Bagaces. They will sell products to the drying center. The Agricultural Extension from the Ministry of Agriculture and Livestock (MAG) promotes National Costa Rican University is a public and executes methods for economic, social, and university recognized as a one of the most important environmentally sustainable production. MAG research centers in the country. They will strengthen will provide training for economic, social, and the process of community empowerment, through environmentally sustainable production for the support, monitoring, and training. project managers. Colegio Técnico Professional Fortuna de Bagaces The National Institute of Innovation and Transfer is a local technical college. They will strengthen in Agricultural Technology (INTA) from the Ministry the process of community empowerment, through of Agriculture and Livestock (MAG) researches and support, monitoring, and training. transfers farming technology. MINTA will conduct agricultural research to improve productivity The local community in Bagaces and nearby areas levels and product quality and provide support to will sell products to the drying center. agricultural product suppliers.
Local authorities were also interviewed. Their inputs were of great value to understand the role other institutions could take and convene a governance structure.
14 From independence to social cohesion
The experience and inputs of individual farmers and farmers associations were considered in the proposed business model to improve the possibility of selling their products.
The feasibility study indicated that stakeholders public programs carry out isolated efforts with and producers typically work independently. There little connection to the key stakeholder—ICE— is a need to train stakeholders to collaborate on and other institutions and local communities. the center’s management and operations. For Although members of the local community hold example, members of local communities who could ICE in high regard for providing jobs and caring for potentially administer the project typically work the environment, several participants from local independently, not as organized groups. To promote and national institutions mentioned the need to collaboration, institutions (such as NGOs) that help strengthen relationships between ICE and others build teams, combined with educational and training by promoting two-way exchanges, interaction, programs, will play key roles. After establishing the and collaboration. By planning ways to strengthen drying center, follow-up assistance for managers community and stakeholder interaction, it is and staff will continue to be necessary. possible to create an interactive governing board In addition, the project’s stakeholders have not and administration to run the drying center. collaborated before. Stakeholders report that
15 Temperature measurements of an injection well carried out by the experts from both ICE and GIZ during the field trip to Alfredo Mainieri Protti Geothermal Field.
The proposed drying center is designed to be over time, indicate that the system is thermally stable. a sustainable operation for years to come. The In addition, the pipe system that delivers the fluids feasibility study considered factors that could either is well-maintained. A chemical treatment controls promote or hamper the drying center’s success over scaling and corrosion caused by minerals and time. It researched technical factors that impact temperature changes. After 25 years of use, efforts longevity, such as the lifespan of the heat source, to keep corrosion and scaling at bay continue to be the condition of the geothermal field’s mechanical effective. Moreover, the useful life of the reservoir is system, and the pipes that transport injection fluids. projected to continue until at least 2060. In addition, it examined whether the center could sustain itself both legally and economically. Finally, The drying center will sustain itself financially it looked at social factors, such as stakeholder through purchasing, producing, and commercializing contributions, social systems, and community crops. know-how. The resulting roadmap, , available There are several venues for commercializing the from GIZ, incorporates actions that will enable the crops: center’s success. y Costa’s Rica’s government-administered Food Heat energy at the geothermal field will remain Processing and Marketing Centers (CEPROMAs) can available for decades. Temperatures in the reservoir, purchase agricultural products from small and mid- estimated from geothermometry, are similar to sized Costa Rican farmers to supply an array of public bottom-hole temperatures measured in the wells. institutions (e.g., hospitals, schools, and colleges). The similarity between the calculated and measured values, plus the constant temperature in the reservoir y Local supermarkets, restaurants, and hotels can
16 sign sales contracts with the center. Supermarkets include Wal-Mart, Auto Mercado, Compre Bien, Perimercados, Pequeño Mundo, PriceSmart, and MegaSuper. Additionally, there are other local supermarkets of interest in Liberia such as Peri Liberia, Maxi Pali, Super Compro Liberia, and Super Spiti. y The Chorotega Regional Market is a wholesale market that can benefit local producers by enabling them to commercialize their products without intermediaries to hotels, independent greengrocers, restaurants, and other wholesale consumers. The market is expected to benefit 17,500 small- and medium- sized producers. There are 52 stores in the market. y Individual customers and established businesses at farmers markets and municipal markets can purchase from the center.
The center’s continued success will be secured through appropriate legal agreements. ICE oversees the geothermal field and its power plants and holds exclusive rights to its resources. The center will gain free access to the geothermal resources and land for the facility from ICE; however, currently, legal parameters for accessing the geothermal field and its resources are underspecified. ICE has provided a letter of support and will enter into a legal agreement with another key stakeholder, the community producers’ group that will run the drying center. Representatives of the drying center will work with ICE to develop a binding agreement that allows the center to operate without fees for 10 years. In addition, the agreement will confer legal rights for employees, producers, and others engaged in center operations and sales to enter ICE’s property to access the drying center.
Collaboration among stakeholders will help the drying center operate profitably. Representatives from the different stakeholder organizations will come together for meetings, site visits, and training to promote collaboration, stay informed, share knowledge, and offer guidance. In addition, drying center managers and staff will attend management As part of the Pacific Ring of Fire, a region characterized and operational training sessions to help them by a large number of both active and inactive volcanoes, maintain the facilities and develop a successful and Central America has significant geothermal potential. It is profitable community-based business. currently estimated at over 6,000 megawatts.
17 Conclusion
Alfredo Mainieri Protti Geothermal Field shares its location in Guanacaste with other renewable energy power plants that are part of Costa Rica’s efforts to use clean energy sources to produce electricity. Clean energy production is at the heart of the country’s Decarbonization Plan.
The research indicates that a direct use geothermal directors and managers takes planning and effort— drying center is a highly feasible project for to enable stakeholders to collaborate and function at Costa Rica. From a technical perspective, there is a high level, there will be workshops, site visits, and adequate heat from geothermal fluids to support regular meetings. In addition, with the assistance the requirements of three dryers and an absorption of various stakeholders, here will be regular follow- chiller. ICE, who holds rights to access the field, will up once the center begins operations to promote allow developers to create the drying center, allow ongoing success. Moreover, the project is legally managers and staff to access the center, and forgo feasible. The geothermal source is controlled by collecting fees for use of the geothermal resource ICE, who has provided a letter of support allowing and land for 10 years. Crucially, they will allow the the development of the center and access to its facility to use reinjection brine from the Miravalles heat source. To secure the commitment, a formal power station. From a social perspective, the agreement must be generated. Finally, the project project is feasible due to an abundance of support is economically feasible. Not only are there several from willing stakeholders. ICE is an active key producers in the region who can benefit from stakeholder and can offer direction and leadership. selling or processing crops at the center, there are Moreover, there is a group that is willing to manage multiple private outlets and state-run programs for the center and that has demonstrated prior interest commercializing the center’s agricultural products. in crop-drying, the Association of Women Farmers The center’s activities will generate income to of Guayabo. Creating a smooth-running team of cover capital expenditures and operating expenses,
18 For years, Costa Rica has focused on generating energy in a sustainable manner by including biodiversity conservation and landscape restoration in these ventures, and working closely with local communities.
including compensation for 10 employees. Taken ministries, which is to ensure availability of high- together, the technical, social, legal, and economic quality products throughout the year regardless of situation in Costa Rica is a desirable setting for weather conditions. At a national and international developing a thriving geothermal direct use project level, the center provides an example for future that benefits the local community. geothermal projects. It is model project that promotes agricultural innovation in the face of The proposed center contributes several benefits. climate change. Ultimately, it can provide benefits At a local level, the drying center resolves farmers’ beyond drying and storing crops main challenges: preserving as much of a harvest as possible through reliable drying and storage For more information, please contact the GIZ and selling crops for fair prices and/or when prices project team. are the highest. Local farmers could sell produce directly to the market instead of selling their crops Isabel von Griesheim Project Manager to intermediaries, as they do now. Alternatively, Promotion of Geothermal Energy in Central America they can sell their crops to the drying center for [email protected] fair prices. Working with the center’s resources, producers can take their businesses to new levels. Ana Lucia Alfaro Lead Coordinator for Pilot Projects and Knowledge At a regional level, the geothermal project could Transfer and Management. address one of the main concerns of Costa Rican [email protected]
19 Implemented by In cooperation with