DBRS Publishes Commentary on Geothermal Energy

DBRS Limited (DBRS) published the commentary “Power from Within: A Primer on Geothermal Energy.” In this commentary, DBRS explores the geothermal power production process and how geothermal energy compares with other renewable energy sources, including the challenges that are unique to geothermal project development and the key credit factors for geothermal projects.

Geothermal power generation is gaining traction globally, with worldwide installed capacity expected to approximately double by 2030 from the currently installed ~14 gigawatts. This is on the back of the growing interest in, and support for, geothermal energy development, including new governmental initiatives and public-private risk-sharing mechanisms and partnerships across various jurisdictions, such as the United Kingdom, Canada and the United States.

Installed global geothermal capacity grew by ~6.0% in 2017 (over 2016) and currently makes up 0.3% of the world’s total installed electricity generation capacity. Because of the new public-private risk-sharing mechanisms and with the increasing awareness and understanding of geothermal resources, it is likely that investors’ appetite to finance such projects will also grow.

In DBRS’s view, it is worth paying attention to geothermal energy, as the need for financing will accelerate in tandem with the expected surge in geothermal project development. For the project-financed debt of a well-structured geothermal energy project, DBRS would focus its analysis on key credit factors that lead to the stability of long-term cash flows while mitigating downside risks through the use of proper risk-transfer mechanisms.

Notes:
A full copy of this commentary is available by contacting us at info@dbrs.com.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.