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Reports of JCM/BOCM Feasibility Studies: FY2012

Title of Study JCM/BOCM Feasibility Study
Geothermal Power Generation in a Country with Suppressed Demand
FYFY 2012
Main Implementing EntityMitsubishi Research Institute, Inc.
Study PartnersISAGEN S.A. E.S.P., Numark Associates, Inc., and Fuji Electric Co., Ltd.
Location of Project/ActivityColombia (Nevado del Ruiz)
Category of Project/ActivityRenewable Energy
Study Report

Note: Preliminary drafts of MRV Methodology and Calculation Sheet are the result of the study. They have neither been officially approved, nor are guaranteed to be officially approved under the JCM/BOCM.
Description of Project/ActivityThis geothermal power project will build a facility with a capacity of 50 MW in the Nevado del Ruiz region near Manizales, Colombia. As more thermal power generation facilities are expected to be installed in greater numbers to meet the increasing demand for electricity arising from economic development in Colombia, geothermal power generation is seen as a promising alternative technology to thermal power generation. This geothermal power project is the first of its kind in the country. Construction is set to start in 2014, and the plant is expected to go into operation in 2016. The project will achieve emission reductions mainly by substituting for fossil-fuel power plants. In this study, we propose a method for setting the reference scenario widely applicable to electric power projects and inclusion into the methodology considerations for countries recognized as having “suppressed demand.”
Eligibility CriteriaThis methodology is applicable under the following conditions:
  • The project activity is the installation of a new grid-connected geothermal power plant or the retrofit of an existing geothermal power plant.
Reference Scenario and Project/Activity BoundaryThe reference scenario (alternative power source) is identified by taking into account a country's situation and conditions, such as plans of the government/operator, availability of technology, possibility for fuel procurement, and economics (general). For countries recognized as having “suppressed demand,” the calculation of the emission factor will take into account plans for future construction of power plants. In the case of Colombia, the envisioned reference scenario is one where there is suppressed demand and the power sources that are expected to increase in the absence of the geothermal power generation project are those defined as “firm energy” (i.e. power distribution capacity in the worst scenario, meaning the drought period in Colombia).
Calculation Method OptionsThere are three options for calculation of non-condensable gases (CO2 and CH4) contained in the produced steam, as follows:
(1) Fixed FS value obtained prior to start of the project,
(2) the regional value, or
(3) the IPCC value. There is significant variance in data on concentrations of CO2 and CH4 in the produced steam. If CO2 and CH4 are not monitored, a certain part of emission reductions will be subtracted from the emission reductions for a conservative calculation.
Default Values set in MethodologyFor the reference emission factor, data from individual power plants defined as “firm energy” in Colombia are used to determine the electricity emission factor.
Monitoring Method
  • Quantity of electricity generation fed into the grid from the geothermal power plant (continuous monitoring)
  • Produced steam (continuous monitoring)
  • CO2 concentrations in the produced steam (optional): measurement at least every [3 months]. [Optional] If changes in the data are insignificant over time, the monitoring frequency may be reduced. A default value may also be selected.
  • CH4 concentrations in the produced steam: measurement taken at least every [3 months]. [Optional] If changes in the data are insignificant over time, the monitoring frequency may be reduced. A default value may also be selected.
GHG Emissions and its Reductions69,766 t-CO2/yr
Method of VerificationLocal entities selected as candidate third-party verification entities
Environmental ImpactsColombia obligates projects and construction works with potential risk of harm to natural resources or scenery to have a valid environmental license, which requires environmental impact assessment to be conducted as one of the conditions. Based on basic environmental analysis, the Colombian government has given permission for the feasibility studies for the project, including test drilling. Moreover, negative effects from the project can be appropriately averted by conducting environmental impact assessments as the development progresses.
Financial PlanJBIC's export finance assistance is also being considered for the future financial plan.
Promotion of Japanese TechnologyJapanese-made geothermal steam turbines have a high market share. As a Japanese geothermal consultancy firm has been contracted to perform techical assessment for the project, there is an even greater chance for the adoption of Japanese technology in this project. On the other hand, as for winning future contracts for other geothermal projects in the host country and other South American countries, involvement in the upstream as well as backup support from export finance and the Bilateral Offset Credit Mechanism are essential. The supply of export products as well as the provision of consulting and financial services will further promote awarding of contracts for geothermal power projects.
Sustainable Development in Host CountryThe outlines of measures for the Colombian Low Carbon Development Strategy (CLCDS) are becoming more concrete, with implementation of those measures presumably to begin from next year onwards. The Colombian Government, however, is concerned about lack of funding and ability to execute those measures. They need to promote their efforts with the cooperation of a range of donors, and in this respect, the Bilateral Offset Credit Mechanism has a significant role to play. As for the future, it will be essential in advancing concrete consideration to take into account the progress of the CLCDS as well as to clarify the respective roles of the Ministry of Environment and National Department of Planning (DNP) , which are the counterparts in Colombia.

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