When it comes to geothermal energy, most of what we hear about are roadblocks that need to be cleared for the industry to expand, or smallish projects going forward.
Starting next year, however, Reykjavik Geothermal will begin drilling tests in Ethiopia, where it plans to develop as much as 1 gigawatt (GW) of geothermal energy over the next decade.
Ethiopia's Corbetti Caldera area is considered one of the top geothermal resources in the world - part of East Africa's Great Rift Valley, which spans eight countries. It has the potential for an estimated 20 GW of geothermal.
The first 10 megawatts (MW) of power comes online in 2015, followed by an additional 100 MW in 2016 and the full 500 MW by 2018. A second phase would double that amount.
Reykjavik Geothermal will the first independent power producer in Ethiopia. The company plans to invest $4 billion in the project, which will also be financed by equity investments led by US investors. Ethiopian Electric Power Corp. will purchase all the energy under a 25-year contract.
"The Corbetti Project will be one of the lowest cost and most technologically advanced geothermal facilities in the world. Our goal is to transfer geothermal knowledge and expertise from Iceland to build a long term geothermal industry in Ethiopia," says Gudmundur Thoroddsson, CEO of Reykjavik Geothermal.
"Africa needs to transform, and energy is at the center of that transformation," Ethiopia's Prime Minister Hailemariam Desalegn said at the announcement in New York. "My vision is that over the next 30 years we will need to harness as much as 80,000 MW of hydro, geothermal, wind and solar power, not just for Ethiopia, but for our neighboring countries as well. This cannot be done by public investment alone; we will need to partner with the private sector to bring in significant private investment going forward. From that perspective, this 1,000 MW project with Reykjavik Geothermal is not that large - but it‘s a great start. What Africa needs now is not just aid, but trade and investment."
"The Corbetti Project is a new model for developing large scale power projects in Africa," says Miheret Debebe, CEO of Ethiopian Electric. "The project combines the considerable expertise for electrical power generation of Ethiopia, with the geothermal technical knowledge of Iceland and the financial and structuring expertise of the United States. This project will set a new benchmark for large scale projects financed by the private sector and will help Ethiopia unleash its full energy potential."
The project is part of the Power Africa initiative that Present Obama announced over the summer. The goal of the public-private partnership is to double the people in sub-Saharan Africa that have access to energy over the next five years.
Another massive project under development in Ethiopia is not so benign, however. A 6 GW hydroelectric dam is already diverting water from Egypt's main water source.
Read our article, Geothermal Still the Underdog of Renewables, But Prospects Are Brighter.