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ACTIVITIES IMPLEMENTED JOINTLY (AIJ)
 
USIJI Uniform Reporting Document:
Activities Implemented Jointly Under the Pilot Phase

List of Projects

A. Description of the AIJ project

1. Title of project: El Hoyo - Monte Galan Geothermal Project

2. Host country: Nicaragua

3. Brief project description:

The El Hoyo-Monte Galan Geothermal Project involves the construction and operation of a 70 megawatt (MW) geothermal plant that is designed to meet the demand for increased electricity supply in Nicaragua. Since this demand would otherwise be met by using diesel fuel, which is the predominant and also the most inexpensive electricity fuel source in Nicaragua, the flash-steam project reduces carbon dioxide (CO2) emissions associated with fossil fuel combustion. The geothermal project will have a 70 MW unit that is expected to come on-line in 2001. An additional 35 MW unit may be constructed in 2004, if a larger reservoir of geothermal resources is confirmed in the project site. The emission reduction estimates are based on displacement of a diesel fueled unit with a geothermal unit of equal capacity.


4. Participants:

Name of Organization or Individual

Country

C and R, Inc.

Nicaragua

Trans-Pacific Geothermal Corporation (TGC)

U.S.A.

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

C and R, Inc.

Name of organization (English)

(Same as above)

Acronym (original language)

None

Acronym (English)

None

Department

Function(s) within the AIJ project activities

Street

P.O. Box 2114

City

Managua

State

Post code

Country

Nicaragua

Telephone

505-2-666166

Fax

505-2-666165

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

McGregor

First name, middle name

Roberto

Job title

President

Direct telephone

505-2-666166

Direct fax

505-2-666165

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Trans-Pacific Geothermal Corporation

Name of organization (English)

(Same as above)

Acronym (original language)

TGC

Acronym (English)

(Same as above)

Department

Function(s) within the AIJ project activities

Street

1901 Harrison Street, Suite 1590

City

Oakland

State

California

Post code

94612

Country

U.S.A.

Telephone

510-763-7812

Fax

510-763-2504

E-mail

TGCORP@CALIFORNIA.COM

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Meidav

First name, middle name

Dr. Tsvi

Job title

President and CEO

Direct telephone

510-763-7812

Direct fax

510-763-2504

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

5. Description of AIJ project activities

Item

Type of Project

Sector(s)

Energy

Primary activity(ies)

Alternative energy generation (geothermal)

Project Location

Country

Nicaragua

Exact location (city, state, region)

45 kilometers (km) northwest of Managua

Key Dates and Current Stage of Project

Project starting date (month/year)

January 1999

Project ending date (month/year)

June 2036

Project lifetime (years)

37 years and 6 months

Current stage of project

Mutually agreed

General Project Description and Technical Data


The El Hoyo-Monte Galan Geothermal Project involves construction and operation of a 70 MW geothermal power facility at El Hoyo-Monte Galan, 45 kilometers northwest of Managua. The flash-steam geothermal development will displace equivalent size diesel-based electricity generation.

Exploration and development of the resource plant began in January 1997, and is expected to be completed by mid-2001. Facilities will include a 70 MW power plant, roads, pipelines, wells, and storage and office facilities. The project's feasibility stage, which involved conducting detailed geoscientific studies began in October 1995 and was completed in January 1997.

6. Cost

(a) Explanation of methodology for calculating cost data

Methodology for Calculating Cost Data


This information is not yet available.

(b) Cost data-Project development

Itemized Project Development Costs

Image

(c) Cost data-Project implementation

The estimated total cost for 70 MW power plant development is about $130 million. No precise information on project costs will be available until the thermodynamic characteristics of the reservoir fluids and the productivity of the wells are determined through long-term testing.


7. Monitoring and verification of AIJ project activities and results

Item

Party(ies) that will be monitoring project activities

Trans-Pacific Geothermal Corporation (TGC), or a partnership formed by TGC to construct and operate the project

Party(ies) that will be externally verifying project results

This information is not yet available (see below).

Date when the monitoring plan became (or will become) operational (month/year)

January 2001

Types of data that will be collected

See below.

Description of Monitoring and Verification Activities and Schedule for Implementation


Monitoring of potential pollution is provided in two distinct stages: (a) during well testing, and (b) during plant operations. Monitoring of gas emissions is routinely conducted in an operating geothermal project. This is done by (a) measuring the fraction of non-condensable gases in the steam flow, and (b) sending representative samples of non-condensable gas for analysis at a reputable laboratory. Gas analysis will be conducted frequently in the early years of the project, and less frequently in the later years, as the reservoir becomes stabilized. In many classical reservoirs, the non-condensable gas fraction declines over time.

No external verification has been arranged. The party(ies) responsible for conducting external verification activities will be designated as a normal part of the operation and administration of the project.

B. Governmental approval

Item

Please check one of the following.

This report is a first report.

or

This report is an intermediate report.

or

This report is a final report.

Please check one of the following:

This report is a joint report. Letter(s) of approval of this report from the designated national authority of the other Party(ies) involved in the activity is(are) attached in Section J, Annex.

or

This report is a separate report.

Additional comments (if any):

C. Compatibility with, and supportiveness of, national economic development and socioeconomic and environmental priorities and strategies

Compatibility with Economic Development and Socioeconomic and Environmental Priorities


At the Summit of the Americas in Miami, Florida in December 1994, the Government of Nicaragua presented a plan for developing Nicaragua's geothermal potential. The plan outlined steps to meet the goal to develop 500 MW of geothermal power in the next 10 to 12 years. The El Hoyo - Monte Galan Geothermal Project is consistent with this national plan.

In the spirit of the previous agreements among Central American leaders, and the CONCAUSA declaration at the Summit of the Americas, Nicaragua is one of the first Central American countries to come up with a preliminary plan for development of their renewable energy resources.

D. Environmental, social/cultural, and economic impacts of the AIJ project

Non-Greenhouse-Gas Environmental Impacts of the Project


The development and generation of thermal energy generally has a minimal impact on the environment, and when compared with fossil fuel-based energy sources, has no significant emissions of GHG. The project will utilize less than 50 acres of land for all purposes, and the site chosen is sparsely populated.

The amount of CO2, sulfur oxides (SOx), and nitrogen oxides (NOx) emitted into the atmosphere from a geothermal resource varies from 0 to 2 percent of that emitted from a fuel oil-based resource. The U.S. Department of Energy (U.S. DOE) has estimated that a geothermal resource typically emits 0.16 kg SOx/MWh, compared to 4.99 kg SOx/MWh from an oil-based resource. GHG emissions from plant construction activities will be short term and transitory. The hydrogen sulfide content at El Hoyo is not expected to exceed acceptable EPA standards. This assumption is based on 12 years of experience in producing geothermal fluids in the adjacent Volcan Momotombo area, around 15 km away from the El Hoyo site.

Social/Cultural Impacts of the Project


Only half of the population of Nicaragua is currently connected to a source of electricity at this time. Availability of a more stable supply of electricity from the El Hoyo project will help to increase living standards, education, and health in Nicaragua.

Economic Impacts of the Project


Nicaragua currently suffers from severe blackouts (up to nine hours per day) because of drought in recent years, which has reduced the output of the hydroelectric plants (which normally provide about 26% of the country's electricity), increased the cost of electricity production, and diminished the interest of industries in developing new projects in the country.

According to the U.S. Geothermal Energy Association, Nicaragua has a 4,000 MW geothermal power potential. Using its abundant geothermal resources, Nicaragua seeks to reduce its dependence on imported fuel and unreliable hydro power by furthering sustainable energy development. Nicaragua would benefit from increased stabilization of its base-load power, resulting in increased productivity in the workplace and the economy as a whole.

In addition to its own use, Nicaragua could potentially export power from its geothermal sources to other countries in the region, thereby displacing fossil fuel-based power and improving the overall air quality in Central America. The recently concluded agreement between the Central American countries to construct an interconnected transmission system within the foreseeable future greatly increases the potential for export of power from Nicaragua to adjacent countries. Segments of that grid already exist, and others will be constructed as a result of the new pact.

The long-term operation of the El Hoyo project facility will provide employment opportunities to the community. In addition, the project will provide economic benefits from secondary and tertiary activities associated with the facility. Typically a 70 MW power plant employs 60 to 100 workers on a full time basis. No potential negative impacts are foreseen.

E. Greenhouse gas impacts of the AIJ project

1. Scenario description

Item

Site Designation

Site number (order of presentation in this report)

1 of 1

Site name/designation

El Hoyo-Monte Galan Geothermal Project

Project sector

Energy

Reference Scenario

Primary activity(ies)

Electricity generation from fossil fuels

Has the reference scenario changed since the last report? (If yes, explain any changes below.)

Yes

No

This is the first project report.

Description:

In the absence of the geothermal project, it is assumed by the developer that diesel fuel would have been used to meet increased electricity demand. The reference case, therefore, is based on GHG emissions from diesel-fueled units with generation capacities equal to those of the geothermal units in the project scenario (70 MW with an 85 percent load factor).

Predicted Project Scenario

Primary activity(ies)

Alternative energy generation (geothermal)

Description:

Flash-steam geothermal plants emit small amounts of CO2 that is produced when the steam separates from boiling water. Because the geothermal plant fully displaces diesel fuel, the only emissions in the project scenario are those associated with geothermal electricity generation.

The 70 MW geothermal plant will begin operation in 2001. If a large reservoir of geothermal resources is confirmed, the plant capacity may be increased by another 35 MW in 2004. It is assumed that the geothermal plant will have a 35-year lifetime, with an 85 percent load factor throughout its lifetime.

Actual Project

Primary activity(ies)

This information is not yet available.

Description:

This information is not yet available.

2. GHG emission/sequestration calculation methodology

GHG Emission/Sequestration Calculation Methodology

Site number

1 of 1

Project sector

Energy

Description of Calculation Methodology for the Reference Scenario


The reference case is based on GHG emissions from diesel fueled units with generation capacities and a load factor equal to that of the geothermal units in the project scenario (70 MW with an 85 percent load factor). Only CO2, the major GHG emitted from diesel fuel combustion, is included in the calculations, and emissions per MWh are assumed to remain constant over the lifetime of the project. Emissions in 1999 through January 2001 are zero because the first geothermal unit is not expected to come on line until mid-2001.

Annual electricity generation (MWh) is calculated by multiplying total plant capacity by the number of hours in a year and by a load factor of 85 percent. For example, in the year 2001, only the 70 MW unit is in operation, and annual electricity generation equals 521,220 MWh (= 70 MW * 8,760 hours * 85% load factor). Load factor is defined as the ratio of the average to peak loads.

Annual GHG emissions are calculated by multiplying annual electricity generation by a diesel fuel CO2 emission factor of 0.723214 t CO2/MWh, (which was taken from a Public Service Commission of Nevada Ruling, SB 497, Docket No. 89-752). For example, emissions in 2002 are 376,954 t CO2 (= 521,220 MWh * 0.723214 t CO2/MWh).

Description of Calculation Methodology for the Project Scenario


The only emissions in the project scenario are the small amounts of CO2 produced during flash-steam geothermal electricity generation. Emissions per MWh are assumed to remain constant over the lifetime of the project. Project emissions are projected to begin by mid-2001, when the 70 MW plant comes on line, and then may increase in the latter half of 2004 if an additional 35 MW plant also comes on line.

Annual flash-steam geothermal electricity generation (MWh) is calculated by multiplying total plant capacity by the number of hours in a year and by a load factor of 85 percent. For example, in 2002 only the 70 MW unit is in operation, and annual electricity generation equals 521,220 MWh (= 70 MW * 8,760 hours * 85% load factor). The assumed load factor is conservative given that geothermal plants can have load factors of greater than 90 percent.

Annual emissions from the flash-steam geothermal plant are calculated by multiplying annual electricity generation (MWh) by a geothermal CO2 emission factor of approximately 0.000893 t CO2/MWh (which was taken from a Public Service Commission of Nevada Ruling, SB 497, Docket No. 89-752). For example, emissions in 2002 are 465 t CO2 (= 521,220 MWh * 0.000893 t CO2/MWh ).

Description of Calculation Methodology for the Actual Project


This information is not yet available.

3. GHG emission/sequestration data

(a) Reporting of GHG emissions/sequestration

Image

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(b) Additional information on GHG emissions/sequestration

Indirect or Secondary GHG Impacts (Positive and Negative)


The El Hoyo project will generate an insignificant amount of greenhouse gases. Power generation from the project will displace diesel fuels and will therefore reduce emissions that would otherwise worsen the air quality in Nicaragua.

Factors That Could Cause the Future Loss or Reversal of GHG Benefits


Given the nature of this project-substitution of fossil fuel generated power with geothermal power-loss or reversal of benefits that have been achieved is not possible.

The only factors that may result in projected benefits not being achieved would be those that reduce the effectiveness of the geothermal plant over time. The most likely factor that could cause a decline in output from the project is exhaustion of the hydrothermal reservoir. However, the converse is equally possible; the reservoir may turn out to be substantially larger than that is expected. In that case, the amount of fossil fuel displacement may be greater than the amount indicated in this report. Although the project facility has been designed to match the hydrothermal reservoir, this cannot be guaranteed.

Other potential uncertainties that may affect GHG estimates include volcanological uncertainties, regulatory risk, and political uncertainties.

Strategy for Reducing the Risk of Future Loss or Reversal of GHG Benefits


This information is not yet available.

F. Funding of the AIJ project

1. Identification of funding sources

(a) Funding sources for project development

Funding Source

Country of Funding Source

Amount

($US)

Percent of Total Funding (%)

International Fund for Renewable Energy and Efficiency (IFREE)

U.S.A.

California Energy Commission (CEC)

U.S.A.

Trans-Pacific Geothermal Corporation (TGC)

U.S.A.

300,000

Trade Development Agency (TDA)

U.S.A.

Government of Nicaragua (GON)

Nicaragua

Total

100

(b) Funding sources for project implementation

Funding Source

Country of Funding Source

Amount

($US)

Percent of Total Funding

(%)

Is This Funding Assured? (Y/N)

International Finance Corporation (IFC)

Multilateral

N

Oxbow Power Corporation

U.S.A.

N

Calpine Corporation

U.S.A.

N

Atkinson Corporation

U.S.A.

N

Total

100

2. Assessment of additional funding needs

Current or Planned Activities to Obtain Additional Funding


This information is not yet available.

G. Contribution to capacity building and technology transfer

Contribution to Capacity Building and Technology Transfer


The El Hoyo project will facilitate the transfer of renewable technologies because the developers will provide training to local personnel in the operation and maintenance of the project.

H. Recent developments, technical difficulties, and obstacles encountered

Recent Project Developments


This information is not yet available.

Technical Difficulties and Other Obstacles Encountered


This information is not yet available.

I. Additional information

Additional Information


This information is not yet available.

J. Annex

1. Host country acceptance of the AIJ project

Country/Project Title

Name, Title, and Government Agency of the Designated National Authority

Date of Approval(day/month/year)

Nicaragua/El Hoyo-Monte Galan Geothermal Project

José A. Ley L., Minister, Nicaraguan Institute of Energy

17 October 1995

2. Letters of approval of this AIJ project report

See attached concurrence form.


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