The World Bank has approved a US$8.55 million grant to Armenia to confirm whether the geothermal resource at the Karkar field is suitable for power generation.
The Geothermal Exploratory Drilling Project grant will also determine the involvement of the private sector in the development of a geothermal power plant, if the resource is confirmed.
Armenia aims to construct a geothermal power plant at the Karkar site in Sjunik region upon the confirmation of the availability of the resource. Unlike other renewable energy technologies, such as wind, solar, and hydro, it is not possible to validate the geothermal resource with sufficient confidence for commercial development without performing exploratory drillings at depth to assess specific parameters of the geothermal field, The World Bank said.
The selection of the Karkar site for exploratory drilling is based on field investigation works completed for two prospective sites, which were deemed the most promising by the local and international geothermal experts. The field investigation works at the prospective sites were supported under the Armenia Geothermal Project, financed by the Global Environmental Facility and completed in 2012.
“By investing in exploration that can lead to the first commercial project, we can help build domestic capacity for the development of additional geothermal resources at other prospective sites. The total potential for geothermal power in Armenia is currently estimated at around 150 megawatt,” said Laura Bailey, World Bank Country Manager for Armenia. “A successful project of this type will also strengthen the investor confidence that geothermal is a viable and profitable investment opportunity in the country.”
The Armenia government will use Scaling-up Renewable Energy Program resources for Stage 1 of the Karkar geothermal project to carry out the exploratory drilling and, if the resource is confirmed, to assess the feasibility of a geothermal power plant at Karkar and support involvement of the private sector for the full development of the geothermal power project.
Stage 2 of the Karkar project would be the construction of a geothermal power plant. The early-stage analyses suggested that a 28-megawayy geothermal power plant with a total estimated cost of about US$100 million could potentially be constructed at the site. The potential geothermal power plant could be developed with a mix of public and private capital.