Reykjavik Geothermal planning 300 MW power plant project in Ethiopia

Wenchi crater, Ethiopia (source: flickr/ MESSAY5, creative commons)

Alexander Richter 30 Aug 2012

A recent interview with Gudmundur Thoroddsson, the CEO of geothermal development firm Reykjavik Geothermal, he talks about his company, its international work and the geothermal energy industry.

Reykjavik Geothermal is an Iceland headquartered geothermal development firm founded by the former CEO of Icelandic utility Reykjavik Energy, and a group of former employees of the company. The owners are its management and foreign investors. The company is developing geothermal power projects around the world and provides geothermal advisory services.

Today the company has about 30 employees with operations in five countries, Iceland, U.S., Ethiopia, United Arab Emirates and Papua New Guinea. The company has worked on geothermal projects in Mexico, Tanzania, India, Rwanda, Saudi Arabia and countries in the Caribbean.

Asked about the business and projects of the company, Gudmundur Thoroddsson talks about that “the company has now started work on its first big project in Ethiopia, where it prepares to develop a geothermal power plant of up to 300 MW in capacity. The company also has two smaller projects in development in India with a local partner called Thermax. These projects are really pilot projects for geothermal development in India, located at the ocean side close to Mumbai and the other one in the mountainous area of Kashmir. The company also has provided expertise with some of the largest projects in the world all from Papua New Guinea to the Caribbean.”

Mr. Thoroddsson talks about that “the best so for not utilized geothermal resources can be found in the third world, which makes it harder for them to attract needed high risk investment. It therefore has been difficult for geothermal to present an economic option for power generation, but this is changing. About five years ago there were only around 100 MW of geothermal power generation capacity in Africa, now the capacity has reached up to 300 to 400 MW and steadily there are more projects planned. The same development can be observed in other places.”

The work on the (Icelandic) geothermal cluster is therefore something that we support, as the geothermal sector in Iceland is strong and has lots of experience. Iceland has consulting firms, like Reykjavik Geothermal, engineering firms, as well as energy companies that constitute a lively geothermal energy industry in Iceland. Iceland also has great players, such as Iceland GeoSurvey (ÍSOR) and the UN Geothermal Training Program (GTP). This gives Icelanders a strong position in the world, particularly in countries with geothermal potential in the developing world, as many of the former students of the UN GTP are now in key positions in their countries. Therefore one can say that everywhere there can be found “Ambassadors” of Iceland.”

In the interview he also is asked about financing for the company’s project in Ethiopia and how the company managed to raise the necessary investment. He mentions that the early start – the company was founded in the fall of 2008 in the middle of the Icelandic financial collapse- was not easy. The company, so Thoroddsson, was built up with geothermal experts and bankers. “The company has been able to gain investment first and foremost from abroad. The company has found good partners abroad and the company now has a turnaround of ISK 400- 500 million (about $3.3-4.1 million).”

Geothermal energy is seen as the main priority for Ethiopia, followed by wind power and the country has significant potential. The Scaling-Up Renewable Energy Program in Ethiopia (SREP) has facilitated a meeting between IFC and Reykjavik geothermal, as well as an IPP that has been negotiating a PPA for electricity expected to be generated from the Corbetti field. “This will be the first IPP/ PPA in Ethiopia and is closely watched by the private sector.”

Source: Frettabladid (in Icelandic), Climate Investment Funds