Lack of expertise hinders growth of geothermal power in China

June 07, 2012
Global geothermal installed capacity, 1960-2012

Kenya now has nearly eight times more geothermal electric power generating capacity (202-MW) than China, the world’s leading energy consumer, which has  just China 24-MW of capacity installed, according to the Geothermal Energy Association’s 2012 International Market Overview Report.

As of May 2012, the Geothermal Energy Association (GEA) estimate there was approximately 11,224-MW of installed geothermal power capacity online globally. It also notes that in 2010 geothermal energy generated twice the amount of electricity as solar energy did worldwide since geothermal plants have very high utilization rates.

“Geothermal growth is currently fueled by a number of factors: economic growth, especially in developing markets; the electrification of low-income and rural communities; increasing concerns regarding energy security and its impact on economic security,” the GEA says in the introduction to its new report.

“Additionally, the majority of the growth in the development of global geothermal resources is occurring in countries with large, untapped, conventional resources. As more countries recognize and understand the economic value of their geothermal resources, their development and utilization becomes a higher priority,” it said.

The contrast between China and Kenya is perhaps, in some ways, understandable as the later sits astride the East African Rift System, which is rich in potential geothermal energy. China, however, also has significant geothermal potential with 12 major geothermal basins, and the country actually ranks number one in terms of geothermal resources used for all applications (mostly for direct heating).

To move ahead with geothermal electricity generation China needs to overcome several obstacles, according to the GEA. First, most of its known high-temperature resources are located in just two provinces – Tibet and Yunan – and closely tied to this is the fact that not enough exploration has been done to understand them. Also, China does not yet have enough experts to support necessary geothermal technology R&D or deployment.

This, however, is set to start changing with a target of 60-MW of geothermal generating capacity by 2015 set under the country’s 12th Five Year Plan. On a visit to Iceland in April Chinese premier Web Jiabao and his Icelandic counterpart witnessed the signing of an agreement to expand collaboration and knowledge-sharing for geothermal energy between the Sinopec Group and the Icelandic company, Orka Energy Holding.

China’s slow start is in marked contrast to several other countries in Asia, which have been developing their geothermal resources to generate electricity at a much faster pace.

The Philippines now has 1,972-MW of installed geothermal electricity generating capacity and is the world’s second-largest producer of geothermal energy after the US. Under its 2009–2030 Energy Plan the Philippines aims to add another 1.5-GW of geothermal generating capacity.

Indonesia, which has at least 27.5-GW of geothermal power potential and is keen to develop it with the aim of having 5-GW of installed capacity by 2025. To do so the country streamlined the process of issuing geothermal exploration permits granted to developers in a competitive bidding process, exempted the import of equipment used for geothermal development from tax and established a feed-in tariff structure that offers up to USD0.97/kWh.

This has attracted a lot of local and international investor interest and, according to the GEA, at least 44 geothermal projects are in development in Indonesia.