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Sumitomo Corporation Conducts Geothermal Power Business from the Long-Term Perspective

April 2013

Renewable energy that can be supplied stably

Amid mounting worldwide concerns about global warming, geothermal power generation has garnered significant attention. This has occurred against a background of surging oil and natural gas prices resulting from increased worldwide energy demand, inflationary pressure that is also driving up operating costs for thermal power plants. Moreover, expectations have been raised for geothermal energy to serve as an alternative to fossil fuels—which will be exhausted at some point in the future—because geothermal energy can be supplied in a stable and semipermanent manner.

The term “geothermal power generation” may have entered the common parlance but a detailed understanding of the principles and mechanisms by which it works is generally lacking. Because of the connotations of the word “geothermal” many people are likely to imagine that geothermal power generation involves burning magma, when in fact power is generated using steam extracted from the ground. Specifically, a pipe is sent deep into a geothermal reservoir several thousand meters underground that is filled with hot water boiling away at temperatures greater than 200 degrees Celsius. When piped to the surface the water turns into water vapor or steam, which is then used to drive turbines to generate power.

Thermal and nuclear power generation require a large amount of water, which is then heated to boiling point by the burning of fuel in order to produce steam. Geothermal power generation needs no such resources. Moreover, geothermal power generation entails no fossil fuels as the groundwater is heated by magma, a phenomenon that emits a very small amount of CO2 (CO2 emissions are about one-twentieth of those of thermal power generation). It is not affected by weather or the availability of sunlight ,and power can be generated in a sustained manner 24 hours a day, 365 days a year. This constitutes another great advantage of geothermal power generation. Geothermal power generation is therefore regarded as using a particularly earth-friendly renewable energy source and being a highly reliable method of producing power.

The white smoke is steam that is released into the air after being cooled. (Ulubelu geothermal power station in Indonesia)

Introducing Japan’s superior technologies to the world

Sumitomo Corporation, which aims “to contribute to society through infrastructure enhancement, adding our own value to it,” became involved in geothermal power generation ahead of other trading firms. Geothermal power generation uses either flash cycle or binary cycle technology. Flash cycle power plants, which generate power by sending steam as hot as 200 to 250 degrees Celsius directly to turbines, are the most common type of geothermal power plants in the world today, thanks to lower construction and operational costs as compared with binary cycle power plants, which employ heat exchange. On an installed capacity basis, a Japanese heavy electric machinery manufacturer accounts for about 80% of the world market for flash cycle geothermal steam turbines.

This market dominance has resulted from Japan’s high level of technical capabilities. Geothermal power generation utilizes naturally occurring underground steam, which contains corrosive materials such as various impurities and heavy metals. Japanese heavy electric machinery manufacturers have swept to a huge lead in terms of the technologies and know-how needed for the manufacture of anti-corrosive turbines.

Sumitomo Corporation launched its geothermal power business by trading the turbines produced by a Japanese heavy electric machinery manufacturer. Subsequently, it has fulfilled a wide range of functions in the field of engineering, procurement and construction (EPC), including providing essential financing for plant construction, risk management, and the timely and accurate collection of information by way of its global network. In partnership with manufacturers, engineering companies and geothermal power consulting companies, Sumitomo Corporation has played a significant support role in a number of projects.

Steam turbine made by Fuji Electric: In the factory in Japan, waiting for shipment to Turkey

Track record developing geothermal power plants in Indonesia, New Zealand, Turkey and other parts of the world

Sumitomo Corporation has undertaken several geothermal power projects, starting with the sale of geothermal steam turbines in the Republic of El Salvador and on the west coast in the United States. In Indonesia, the Ulubelu geothermal power station completed in October 2012 was the first large-scale geothermal power generation facility constructed on the island of Sumatra. Including this project, Sumitomo Corporation has now been involved in a total of eight geothermal power station projects in Indonesia. Through these projects, Sumitomo Corporation is responsible for the delivery of roughly 50% of the total capacity of all geothermal power generation facilities now in operation in the country. Indonesia is known to have the largest geothermal resources in the world and is thus attracting attention as a promising site for further geothermal power development.

In New Zealand, Sumitomo Corporation participated in the project for the Nga Awa Purua geothermal power station, which was completed in April 2010. The turbine installed at the station boasts the world’s largest output for a single unit.

In Turkey, Sumitomo Corporation delivered a steam turbine and a power generator to the Kizildere geothermal power plant in 2012. Construction of a new geothermal power generation facility is underway at the plant. When this new facility is completed and starts operation, the plant will become one of the largest geothermal power plants in the Middle East. Turkey is one of the richest countries in the world in terms of geothermal resources, and the government aims to boost the national capacity of geothermal power generation to 550 MW by 2015. Accordingly, both domestic and foreign private-sector companies are pressing forward with geothermal plant development projects in the country.

By focusing also on other potential power generation technologies that make use of water at a temperature of around 100 degrees Celsius, Sumitomo Corporation will make further efforts for the wider use of environmentally friendly energies in Turkey and in other parts of the world.

Regions in the world with confirmed volcanic geothermal resources

Undertaking projects with a sense of mission of working for the earth

Amid the increasing attention given to geothermal power generation and in line with expectations for renewable energy in general, it is anticipated that geothermal power generation development projects will in the future increase rapidly throughout the world. Furthermore, geothermal power generation projects, which were previously often promoted at the national government level, have in recent years been promoted with the use of private funds.

Geothermal power generation involves development risks in that geothermal source exploration takes years and it is necessary to drill several thousand meters to extract the steam. The power, however, can be supplied stably, on a semipermanent basis and with less CO2 emissions, and is therefore also advantageous in terms of preservation of the global environment. Capitalizing on its past experience in this field, Sumitomo Corporation will make even more contributions to geothermal power generation projects around the world, with a view to protecting the global environment and creating a low-carbon society.

Nga Awa Purua Geothermal Power Station in New Zealand

Related Tag

  • Environment & Infrastructure Business Unit
  • Indonesia / New Zealand / Turkey
  • Electric Power & Energy
  • Environment

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