News

Interview with Horst Kreuter on GeoTs involvement in Africa

Interview with Horst Kreuter on GeoTs involvement in Africa Ngozi Volcano, Tanzania, Africa (source: Kraml/ GeoT)
Alexander Richter 14 Aug 2012

In an interview with ThinkGeoEnergy, Horst Kreuter founder and CEO of GeoT (Geothermal Engineering) from Germany talks about his company's activities in Tanzania and in Kenya.

Over the past few years I have had the pleasure meeting on several occasions Horst Kreuter of GeoThermal Engineering, a German geothermal engineering firm now turned developer as well. The company and its founder have been active pretty much internationally. Horst Kreuter has also been an outspoken board member of various industry associations, among them the German Geothermal Association and the International Geothermal Association (IGA).

His company also recently announced various involvements in Eastern Africa, and I thought it would be a good opportunity to explore what the firm is up to.

Can you give us a bit of a background of your manifold (?) activities in geothermal: what services do you provide and what countries are you working in?

GeoThermal Engineering was founded in 2005 in Karlsruhe, Germany. Situated in the center of the geothermal province of the Upper Rhine Valley, the first customers came from this region and the Molasse Basin geothermal province. In cooperation with regional partners we are now working in Switzerland (Deep Rock Energy GmbH; Ennetbaden), Turkey (Bosporus New Energy Ltd, Ankara), Asia (Marshfield Energy PTE Ltd, Singapore) and Africa (Geothermal Power Ltd, Mauritius). From these bases we are able to cover almost every region in the world.

Actually we have four areas of activity. As a geothermal consultant we are working for private and PPP projects to produce electricity from hot volcanic as well as low temperature deep reservoirs. We also consult public institutions and local / national governmental bodies. Furthermore, we are involved in EGS projects, which are either R&D or commercial ventures. We are currently participating in seven R&D projects ranging from purely geological to drilling technology focus. Geothermal exploration is one of our key competences, with a highly trained staff of geoscientists. With geological, geochemical and geophysical expertise we are able to cover the crucial steps into a geothermal project. Own projects are developed in joint ventures and are situated in Germany and Tanzania.

In consulting for instance, we guide companies into the geothermal business. Customers reach from electricity companies and public utilities to drilling rig or power plant manufacturers. Plus, we just launched the GeoTAnalyzer, an expert business tool for financial modeling of geothermal projects.

GeoT has been working extensively in Germany over the last 7 years, what has created an interest for you and your company to explore business opportunities in Africa?

In the beginning it was mainly personal interest. Coming from Germany, a special geothermal market that just started to evolve in the year 2000, there was so much to learn and experience in geothermal around the world. From the first step out, we were able to start cooperation with partners from abroad. As geothermal projects in Germany are sometimes slowed or stopped, it also seemed to be a good idea to disperse risk over different countries, different customers and different areas of activity. To initiate and develop own projects also serves this purpose, as well as adding responsibility, new challenges and room for creativity. To develop projects in Africa is especially challenging but offers a promising resource that waits to be developed in many countries. Kenya is a good example what geothermal energy can bring to a country. The other countries to the north and south of Kenya can build on this showcase, but should be aware that the power to be produced depends on the resource. The resources in the neighboring countries might not reach the extraordinary level of Kenya. But they can still help a lot to cover the power needs of many of the East African countries.

You are working with the Pöyry Group to administer a fund for KfW and the African Union Commission. Can you provide some background on the project and on the role of your company in this assignment? What role will the fund play in promoting and developing geothermal energy in Eastern Africa in your opinion?

KfW was looking for a scheme that will enable projects to master the first, high risk exploration steps including exploration drilling. SKM together with GeoT helped to conceptualize a risk mitigation facility that is based on grants and not on insurance as compensation for failure. With a contribution of up to 80% of the costs for surface exploration and up to 70 % for exploration drilling we expect the program to be very well accepted and trust that it will speed up geothermal development in the East African Rift Valley.

In cooperation with Pöyry and some renowned consultants like Gordon Bloomquist, Jim Lawless, Miklos Antics and others, GeoT is part of the technical consultant team of the GRMF guiding potential applicants and project developers through the application phase into exploration. We have already drafted the applications documents and will subsequently help to select the best projects as well as to secure the quality of applicants, applications and the exploratory work executed.

Recently you announced your firm’s involvement in Tanzania, why did you decide to get involved in this country and can you describe the next steps for your firm there?

East Africa was an easy choice, because the German “geotherm” exploration program by BGR served as a fertilizer and as the basis for our geothermal development in Tanzania. Exploration experts, who did some valuable work in the geotherm program have joined GeoT to carry on their work in Tanzania. We will soon start drilling a number of exploration wells in one of the three geothermal resources we plan to develop in the future. If the wells fulfill the expectations, production and injection well drilling will follow. We will start with a so called well head generator, a small ORC power plant to produce about 1 to 3 MW of electricity from the expected about 160°C hot resource.

I know that you have been involved internationally in the International Geothermal Association, but also in Germany through the German Geothermal Association. What roles do these organizations play for international development? How do they help companies like yours both in your home market, but also in new markets for your business?

Geothermal power still lacks publicity and support, especially compared to wind and solar. The national and international associations play the key role to raise awareness and acceptance of this fascinating renewable resource. When the people, politicians, banks and investors understand what we are doing, the support will follow and the market will grow. But there is still a lot to be done to reach this goal. What the associations need in order to really push geothermal is funds. The geothermal industry is rather small compared to wind and solar, not to forget the oil and gas sector, but without well-funded and professional associations and lobby groups, the market will not grow as it could.

For international business, the associations can offer a platform for networking via their conferences and trade shows. The market is getting more and more international so many conferences start offering multi-lingual conferences and special programs for international business.