Criteria for geothermal power Climate Bonds released for consultation
The Climate Bond Initiative has released "Standard Geothermal Power Criteria for Climate Bonds" for public consultation.
In a release today, Climate Bonds Initiative has issued a document on “Standard Geothermal Power Criteria for Climate Bonds” for public consultation.
The Climate Bond Initiative “is the only organisation in the world working to mobilize the largest capital market of all, the $100 trillion bond market, for climate change solutions.”, so the organization’s website. The key strategy is to develop a large and liquid Green and Climate Bonds Market that will help drive down the cost of capital for climate projects in developed and emerging markets; to grow aggregation mechanisms for fragmented sectors; and to support governments seeking to tap debt capital markets.”
As part of their ongoing work, they now looked at geothermal pointing out right from the start, that the key for geothermal to be looked at for climate bonds is that they will have to “have a near zero-emissions operating profile.”
While describing the vast opportunity for geothermal power generation, the article says that one “can’t assume that geothermal is always a clean energy source. When we convened our expert committee to set out criteria for geothermal we found not all geothermal is low emission. In fact, some geothermal plants can generate higher direct greenhouse gas (GHG) emissions than fossil fuel equivalents – for example, drilling down through some rock types can lead to fugitive greenhouse gas emissions. Robust criteria for geothermal need to exclude those geothermal projects that have high emissions whilst supporting low emission geothermal.
Earlier this year the Climate Bonds Standard convened two groups to draft criteria for what geothermal power assets would be eligible for Climate Bonds Certification: a Technical Working Group and a Geothermal Expert Advisory Committee.
Eligibility criteria developed by the working group have now been released for a 30-day public consultation period.
The overarching criteria for all eligible geothermal projects is a near zero GHG emissions operating profile.
The objectives of the geothermal eligibility criteria are to:
- Distinguish low-emitting from high-emitting geothermal projects
- Avoid certifying projects which displace other renewables, given that geothermal operational ?emissions can be far from negligible
- Exclude projects where emissions are poorly understood
- Exclude projects which do not meet acceptable standards in terms of environmental impact, ?health,safety and induced seismicity(link is external) ?(i.e. generating earthquakes)
Following these objectives, eligibility criteria has been developed into a consultation document providing clear guidance.
Eligible projects include:
- New or existing geothermal projects where estimated emissions performances are negligible. The estimation must use a GHG accounting methodology and result in an emissions profile no greater than zero gCO2/kWh (carbon emissions/power generated)
- Technology upgrades to a binary cycle power plant to address fugitive GHG emissions by implementing a closed loop system that returns GHG gases to the existing reservoir.
- Clean Development Mechanism approved project (meaning it is compliant to CDM) and therefore is expected to have negligible emissions (meeting the zero gCO2/kWh threshold).
- All eligible geothermal projects must be compliant with the environmental regulations at the national and local level.
- Projects are also required to comply with one of the international guidelines and standards on environment, health and safety for geothermal power generation (e.g.IFC, World Bank – more details in the consultation document).
The standard also strongly recommends adherence to one of the following Performance Standards on Environmental and Social Sustainability:
- IFC PS5 Land Acquisition and involuntary Resettlement(link is external)
- IFC PS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources
Source: Climate Bonds Initiative
The actual draft document can be found here (pdf).