Tuesday, 26 October

Russia to work with Iceland for more Geothermal Power in Kamchatka

According to a recently published report from ABS Energy Research of London, 2009 was a poor year for power generation from Geothermal Energy with only 405 MW of new capacity installed: USA (181 MW), Indonesia (137 MW), Turkey (47 MW) and Italy (40 MW).

According to the ABS, the investment has been down due to the high capital costs for geothermal and high financial risks in the development stages. Growth in the USA was boosted by the American Reinvestment and Recovery Act of 2009 which extended producer and investor tax credits to 2016 and funded several development stage projects. However, the sector is expected to grow rapidly in several countries over the next 5 years due to current and proposed incentives. It is expected that the market will grow by 78% from 10,711 MW at the end of 2009 to 19,016 MW in 2015. In terms of new capacity, growth markets will be the three biggest geothermal countries: the USA, the Philippines and Indonesia. Countries generating electricity from geothermal is expected to rise from 24 at the end of 2009 to 36 in 2015.

The Kamchatka peninsula may contribute to that future geothermal investment. The Russian Energy Minister Sergei Shmatko visiting Iceland said on Monday that an agreement may be signed with the Icelandic government to cooperate in the field of geothermal energy. He also said geothermal energy was one of the most promising renewable energy sources, with RusHydro, the country’s largest renewable energy producer, already operating several geothermal power stations. RusHydro currently operates two geothermal power plants on Kamchatka, with an overall capacity of 62 megawatts. Shmatko reiterated the government’s plan to have 4.5 percent of energy produced in Russia by 2020 come from renewable resources.

The above picture shows bathers enjoying the output water of the HS Orka geothermal energy plant in Grindavik, Iceland. Shmatko also said his government was discussing with Iceland the construction of an energy-efficient metallurgical plant on Kamchatka. He didn’t specify when any of the agreements with Iceland might be signed. It is an interesting coincidence that at an earlier meeting last Friday, the Russian President Medvedev was discussing the impact of alternative energy on Russian oil market: "Of course we want our energy resources to sell well and we do not want to see excessively low oil prices, but $140 a barrel is a catastrophe for Russia. [Such a high price] destroys all incentives for development," he said.

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