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GEOTHERMAL

ENERGY

Unveiling the Socioeconomic Benefits

REPORT

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PublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorizedREPORTGEOTHERMALENERGYUnveilingtheSocioeconomicBenefitsThefindings,interpretations,andconclusionsexpressedinthisworkdonotnecessarilyreflecttheviewsoftheWorldBank,itsBoardofExecutiveDirectors,orthegovernmentstheyrepresent.TheWorldBankdoesnotguaranteetheaccuracyofthedataincludedinthiswork.Theboundaries,colors,denominations,andotherinformationshownonanymapinthisworkdonotimplyanyjudgmentonthepartoftheWorldBankconcerningthelegalstatusofanyterritoryortheendorsementoracceptanceofsuchboundaries.NothinghereinshallconstituteorbeconsideredtobealimitationuponorwaiveroftheprivilegesandimmunitiesofTheWorldBank,allofwhicharespecificallyreserved.©2023InternationalBankforReconstructionandDevelopment/TheWorldBank1818HStreetNWWashingtonDC20433202-473-1000www.worldbank.orgRightsandPermissionsThisworkisavailableundertheCreativeCommonsAttribution3.0IGOlicense(CCBY3.0IGO)http://creativecommons.org/licenses/by/3.0/igo.UndertheCreativeCommonsAttributionlicense,youarefreetocopy,distribute,transmit,andadaptthiswork,includingforcommercialpurposes,underthefollowingconditions:Attribution—Pleasecitetheworkasfollows:“EnergySectorManagementAssistanceProgram(ESMAP).2023.GeothermalEnergy:UnveilingtheSocioeconomicBenefits.Washington,DC:WorldBank.”Translations—Ifyoucreateatranslationofthiswork,pleaseaddthefollowingdisclaimeralongwiththeattribution:ThistranslationwasnotcreatedbyTheWorldBankandshouldnotbeconsideredanofficialWorldBanktranslation.TheWorldBankshallnotbeliableforanycontentorerrorinthistranslation.Adaptations—Ifyoucreateanadaptationofthiswork,pleaseaddthefollowingdisclaimeralongwiththeattribution:ThisisanadaptationofanoriginalworkbyTheWorldBank.ViewsandopinionsexpressedintheadaptationarethesoleresponsibilityoftheauthororauthorsoftheadaptationandarenotendorsedbyTheWorldBank.Third-partycontent—TheWorldBankdoesnotnecessarilyowneachcomponentofthecontentcontainedwithinthework.TheWorldBankthereforedoesnotwarrantthattheuseofanythirdparty-ownedindividualcomponentorpartcontainedintheworkwillnotinfringeontherightsofthosethirdparties.Theriskofclaimsresultingfromsuchinfringementrestssolelywithyou.Ifyouwishtore-useacomponentofthework,itisyourresponsibilitytodeterminewhetherpermissionisneededforthatre-useandtoobtainpermissionfromthecopyrightowner.Examplesofcomponentscaninclude,butarenotlimitedto,tables,figures,orimages.AllqueriesonrightsandlicensesshouldbeaddressedtoWorldBankPublications,TheWorldBank,1818HStreetNW,Washington,DC20433,USA;e-mail:pubrights@worldbank.org.Design:SergioMoreno,GCS,WorldBankCoverphoto:SupremeEnergyGEOTHERMALENERGYUnveilingtheSocioeconomicBenefitsTableofContentsABBREVIATIONS.............................................................................VIIIACKNOWLEDGEMENTS........................................................................IXEXECUTIVESUMMARY.........................................................................XIONE.INTRODUCTION..........................................................................1UnderstandingtheSocioeconomicBenefitsofGeothermalProjectDevelopment.............................7TWO.THEGEOTHERMALVALUECHAIN..........................................................12DomesticParticipationInTheGeothermalValueChain...................................................13AnEnablingEnvironmentfortheGeothermalValueChain................................................21THREE.GEOTHERMALJOBSANDSKILLS........................................................30Laborrequirementsalongthegeothermalvaluechain...................................................36Assessingandrespondingtoskillneeds................................................................49Geothermaleducationandtraining...............................................................53Encouragingtheprivatesectortocreatedomesticemploymentopportunities..........................61FOUR.ENSURINGTHATGEOTHERMALPROJECTS’SOCIOECONOMICBENEFITSAREFELTBYLOCALCOMMUNITIES.........................................................................62Lessonsinbenefitsharing............................................................................68FIVE.CONCLUSION..........................................................................88REFERENCES................................................................................92ANNEXES..................................................................................99Annex1.Roleofthepublicandprivatesectorsingeothermalprojectdevelopment..........................99Annex2.Methodology...............................................................................102PHOTOCREDITS............................................................................106TABLESTable2.1Localizationpotentialforservicesalongthegeothermalvaluechain...........................19Table2.2Waystoencouragedomesticparticipationinthegeothermalvaluechain.......................26TableB2.4.1LocalcontentrequirementsforgeothermalprojectsinIndonesia.............................27Table3.1Jobcategoriescreatedthroughgeothermalprojectdevelopmentandoperation................35Table3.2Women’sshareofworkforceinselectdirectuseprojects.....................................40Table3.3Encouragingtheprivatesectortoupskillandemploythedomesticworkforce..................61Table4.1Keywaysthatdeveloperscaninformandengagelocalcommunities...........................75Table4.2Skillandcapacityenhancementefforts,byshareofdeveloperssurveyed.......................80Table4.3Specificexamplesofdevelopers’trainingandskillbuildingactivities..........................81Table4.4Examplesofrevenuesharingapproaches..................................................85FIGURESFigure1.1Examplesofdirectusesofgeothermalenergy...............................................3Figure1.2Economicandsocialbenefitstobeexpectedfromgeothermalprojects........................10Figure1.3Socioeconomiccategories...............................................................11Figure2.1Thegeothermalvaluechainanditslife-cyclecosts,bysegmentshare..........................14Figure2.1Thegeothermalvaluechainanditslife-cyclecosts,bysegmentshare..........................15Figure2.2Shareofdevelopersfindingitdifficulttoprocuredomesticgoods/services,byvaluechainsegment..........................................................................20Figure2.3StructureofthegeothermalprizeoftheUSDepartmentofEnergy............................23Figure2.4Competitivebiddingprocessandkeydocuments...........................................26Figure3.1Geothermaljobsalongthevaluechainbyskilllevel(jobcategories1–5)........................34Figure3.2Shareofjobscreatedalongthegeothermalvaluechain,bysegment(%).......................35Figure3.3Shareofsurveyeddevelopersthathavefounditdifficulttorecruithighlyskilledtalentinprojectcountries(%).............................................................42Figure4.1Developinggeothermalenergy:Amodelforthesociallicensetooperate(SLO)..................65Figure4.2Benefitsharingactivitiesalongthevaluechain.............................................68Figure4.3Percentageofdeveloperscreatingacommunitydevelopmentplan...........................75Figure4.4Percentageofdeveloperssupportinglocalinfrastructuredevelopment........................80Figure4.5Percentageofdevelopersthatsharerevenuewithcommunities...............................84BOXESBox1.1Iceland:Creatingvaluebeyondelectricitygeneration.........................................4Box1.2Global:Atransparentregulatoryframeworkcanattractinvestmentandmaximizebenefits........6Box1.3Kenya:Economicgrowthanddiversificationresultingfromageothermalpark...................8Box2.1Locatingthemanufactureofgeothermalequipment.........................................16Box2.2Iceland:Developingdomesticmaintenancecapacity.........................................17Box2.3Türkiye:Financingthegrowthofgeothermalgreenhouses....................................24Box2.4TürkiyeandIndonesia:Encouragingdomesticprocurement..................................27Box3.1Türkiye:Gettingmenonboardtoadvocateforgenderequality...............................32Box3.2EastAfrica:Skillshortagesforgeothermaldevelopment......................................41Box3.3Indonesia:Investinginhumanresourcedevelopment........................................43Box3.4ElSalvador:LaGEO—takingactiontoimprovetheshareoffemaleemployment.................46Box3.5NewZealandandIceland:Spotlightonthegenderpaygap...................................47Box3.6TheGeothermalJobsandEconomicDevelopmentImpactmodel..............................50Box3.7Skillsynergiesbetweenthegeothermalandoilandgassectors...............................52Box3.8EastAfrica:Aregionalapproachtotechnicalandvocationaleducationandtraining..............55Box3.9Iceland:TheGeothermalTrainingProgram—buildingexpertiseindevelopingcountries..........56Box3.10NewZealand:EncouragingMāoriyouthtopursuecareersingeothermalenergy................59Box3.11UnitedStatesofAmerica:Encouragingstudentstoenterthegeothermalsector.................60Box4.1NewZealand:Theneedtorespectandunderstandlocalcultures,religiousbeliefs,andpractices..64Box4.2Japan:Creatingnewrevenuestreamsforruralcommunities..................................66Box4.3Kenya:Integratinggenderequalityandsocialinclusionprovisionswithinnationalpolicies........70Box4.4Indonesia:SocialmappingonMountUngaran..............................................71Box4.5St.Lucia:Providingtransparentinformation,andbuildingtrustinplaceoflocalresistance........72Box4.6KenyaandNewZealand:Sharingbestpracticesacrossnationallines..........................74Box4.7Philippines:Fromreliancetoempowerment—theevolutionofacorporatesocialresponsibilitystrategy...................................................................78Box4.8Kenya:Championingyouthempowermentandemployment..................................83Box4.9EuropeanUnion:Spurringcommunityinvestmentingeothermalprojects......................86Box4.10PhilippinesandEthiopia:Outcomesofprogrammonitoringandevaluation.....................87AbbreviationsCAPEXcapitalexpenditureCSRcorporatesocialresponsibilityEDCEnergyDevelopmentCorporationEPCengineering,procurement,andconstructionESIAEnvironmentalandSocialImpactAssessmentESMAPEnergySectorManagementAssistanceProgramGDCGeothermalDevelopmentCompanyGDEGeoDipaEnergiGDPgrossdomesticproductGRÓGTPCentreforCapacityDevelopment,Sustainability,andSocietalChange’sGeothermalTrainingProgramILOInternationalLabourOrganizationIRENAInternationalRenewableEnergyAgencyMWmegawattNRELNationalRenewableEnergyLaboratoryO&MoperationandmaintenanceRfPrequestforproposalsSMEssmallandmediumenterprisesSTEMscience,technology,engineering,andmathematicsTVETtechnicalandvocationaleducationandtrainingUNEPUnitedNationsEnvironmentProgrammeUSDOEUnitedStatesDepartmentofEnergyWINGWomeninGeothermalAllcurrencyisinUnitedStatesdollars(US$,USD),unlessotherwiseindicated.AcknowledgementsThisreportispublishedbytheWorldBank’sEnergySectorManagementAssistanceProgram(ESMAP).ItspreparationwasoverseenbyateamofWorldBankstaffatESMAP,ledbyElinHallgrimsdottirandAndersPedersen(seniorenergyspecialists);thereportwaswrittenbyStephaniePinningtonandKavitaRai(consultants).TheWorldBankteambehindthereportwouldliketoexpressourgratitudetothewiderangeofstakeholderswhoprovidedinputsbycompletingasurveyortakingthetimetomeetwithustosharetheirexperiencesandviewsonthesocioeconomicbenefitsofgeothermal.Wewouldliketothank:AlperBaba(IzmirInstituteofTechnology);AzraSehicPálsson(IndependentConsultant);DiegoMorata,SofiaVargas-Payera,andEstebanMicco(AndeanGeothermalCentreofExcellence);AngelFernandoMonrayParada(SeniorGeothermalConsultant,WorldBank);BaseloadCapital;BryantJones(BoiseStateUniversity);Enel;Energeo;EnergyDevelopmentCorporation;AmelBarich(GEORGGeothermalResearchCluster);CarlosJorquera(GeothermalCouncilofChile);GeothermalDevelopmentCompany,GeothermalVillagesNetwork(HelenRobinson),GioiaFalcone(UniversityofGlasgow),GovernmentofSt.Lucia,GRÓGeothermalTrainingProgramme(GudniAxelsson);GudmundurHagalinGudmundsson,HélènePfeil(SocialDevelopmentConsultant,WorldBank),IndonesianGeothermalAssociation(PriyandaruEffendi),InstitutoCostarricensedeElectricidad(ICE),InstitutoNacionalDeElectrificación(INDE),Inter-AmericanDevelopmentBank(MichelleRamirez),InternationalGeothermalAssociation(MaritBrommer),InternationalRenewableEnergyAgency(JackKiruja),JacksonGrimes(UniversityofTexas),JasminRaymond(InstitutNationaldelaRecherche),JóhannJónasson,KatarzynaKurek(CzechUniversityofLifeSciencesPrague),KenyaElectricityGeneratingCompany(KenGen),LaGEO,Landsvirkjun,LucaGuglielmetti(UniversityofGeneva),MexicanCenterforInnovationinGeothermalEnergy(HéctorMiguelAviñaJiménez),MexicanGeothermalAssociation(HeberDiezLeon),NationalRenewableEnergyLaboratory(CaitySmith),Ormat,OserianDevelopmentCompanyLimited,Pertamina,PolarisEnergy,PTGeoDipaEnergi(Persero),PTSupremeEnergy,ReykjavikEnergy,SarullaOperationsLimited,ServicesIndustrielsdeGenève;AndrewPalmateer(UnitedStatesEnergyAssociation);Upflow;FikhaFininda(WomeninGeothermalIndonesia);WomeninGeothermal,(Andrea‘Andy’Blair),MeganMeyer,MuchsinChasaniAbdulQadir,LucBeraniaDiazRios,ErikaRuthFelix,MichaelFriss(WorldBank),YrsaSigurðardóttir(Verkís)and,ZorluEnerji.AninternalpeerreviewwasdiligentlycarriedoutbyJoeriDeWit(SeniorEconomist),MarianoGonzalezSerrano(SeniorEnergySpecialist),andSanjayAgarwal(SeniorSocialDevelopmentSpecialist).Inaddition,EbruDemirAykan(SocialDevelopmentSpecialist)providedfeedback.Wethankthemfortheirtimeandvaluablefeedback.TheteamextendstheirappreciationtoGabrielaElizondoAzuela(PracticeManager,ESMAP/WorldBank)forherguidanceandsupportthroughoutthedevelopmentofthereport.TheEnergySectorManagementAssistanceProgram(ESMAP)isapartnershipbetweentheWorldBankand24partnerstohelplow-andmiddle-incomecountriesreducepovertyandboostgrowththroughsustainableenergysolutions.ESMAP’sanalyticalandadvisoryservicesarefullyintegratedwithintheWorldBank’scountryfinancingandpolicydialogueintheenergysector.ThroughtheWorldBank,ESMAPworkstoacceleratetheenergytransitionrequiredtoachieveSustainableDevelopmentGoal7toensureaccesstoaffordable,reliable,sustainable,andmodernenergyforall.IthelpstoshapeWorldBankstrategiesandprogramstoachievetheWorldBankClimateChangeActionPlantargets.Learnmoreat:https://esmap.orgEditors:StevenSpencerandFayreMakeigDesign:SergioAndresMoreno/WorldBankKeyFindingsThisreporthighlightsthesocioeconomiccontributionsofthegeothermalsector,includingthepotentialopportunitiesandbenefitsthatcanbeenhancedatnationalandlocallevelsthroughoutgeothermalprojects’developmentandoperation.Keylessonsandbestpracticesareoutlinedinthereportandshowcasedacross27casestudieswiththeintentthatgovernmentsanddevelopersalikecanlearnandreplicatebestpracticestogeneratepositivesocioeconomicoutcomes.Thereportexaminessocioeconomicbenefitsacrossfourcategories,derivedfromtheWorldBank’sSustainableRenewablesRiskMitigationInitiative.Keyfindingsandrecommendationsare:1.Participationofdomesticcompaniesinthegeothermalvaluechain•Thereissubstantialroomforlocalizationeffortsparticularlyintheconstruction,andoperationandmaintenance(O&M)segmentsofthegeothermalvaluechain.Conductavaluechainanalysistoidentifypossibleareasfordomesticcompanies’participation.•Tailoredsupportprogramstoaddressspecificneedsandchallengesfacedbylocalcompaniesareneeded.Identifygapsanddesignprogramstonurturethedomesticandlocalgeothermalindustry’scapabilitiesoverthelongterm.•Governmentsareusingprojectprocurementtoencouragelocalizationalongthegeothermalvaluechain.Incentivesfordeveloperstodomesticallysourcespecificcomponentsandserviceshaveeffectivelynurturedthegrowthofdomesticcompanies.However,thereneedstobeabalancetomaintainprojects’cost-effectiveness.•Industryclustersandassociationsplayanimportantroletoboostthedomesticindustry’scapacitiesthroughfacilitationoftraining,networkingopportunities,promotionoftechnologytransfer,andcollaborativeresearchanddevelopment.•Collaborationbetweengovernmentagenciesandindustrystakeholdersareessentialtoalignpolicies,initiatives,andinvestmentswiththegoalofstrengtheningthedomesticgeothermalindustry.2.Geothermalemploymentandskilldevelopment•Employmentandskilldevelopmentarevitalcomponentsofthegeothermalsector’sgrowth.Regardingjobcreation,bothconstructionandO&Mholdsubstantialpotentialandtheseopportunitiesneedstoberecognizedandharnessed.•Thegeothermalsectorfacesskillshortageswithgapsprevalentamonghigh-skilledpositionsandtoalesserextentamongmedium-skilledroles,whereaslow-skilledrolesfacefewerrecruitmentchallenges.Mitigatingskillshortagescanbepossiblebyreskillingtalentfromdecliningindustries,collaborationwitheducationalinstitutionsforgeothermalcurriculaandspecializedtrainingprograms,andincentivizationofdeveloperstoofferon-the-jobtraining.•Often,developershireindividualswithoutpriorexperienceinthegeothermalindustryandprovidethenecessaryeducationandon-the-jobtraining,throughformalprogramsorinformalpeerlearning.Addressingskillshortagescaninvolvesendingindividualstoestablishedgeothermalmarketsfortraining.•Expansionofthegeothermalworkforcerequiresbettercommunicationabouteducationalopportunitiesthroughstudentcompetitions,mentorshipprograms,internship,andapprenticeship.•Fosteringpartnershipbetweengovernmentagencies,educationalinstitutions,andprivatecompaniesforjointinvestmentinskilldevelopmentprogramsisessential,andtoensurethatappropriatetrainingandeducationaligntheworkforcewiththeindustry’sneeds.3.Localdevelopmentandbenefitsharing•Theneedforcommunityengagementgoesbeyondamereformality—itisintegraltothedevelopmentprocess.Securingasociallicensetooperateisnonnegotiableforgeothermaldevelopers.•Itisimportanttorecognizethattheinvestmentsincommunityengagementhaslong-termbenefits,preventsdelaysandlegalissues.Transparentinformationandcomprehensiveconsultationsarekeyforeffectivebenefitsharing.•Benefitsharingisbroadlygroupedintothreekeycategories:i)Infrastructureandserviceenhancementdirectlycontributingtocommunitywell-being;ii)Communityskillandcapabilityenhancement;andiii)Revenue/ownershipsharingarrangementsandmechanisms.•Aligninglocalcommunities’needswithgovernmentprioritiestofacilitatethecreationofbenefitsharingprogramscontributetowardscommunityanddevelopmentgoals.4.Genderequalityandsocialinclusionareaddressedthroughanintersectionallens.•Tofosterdiversityandinclusion,severalgovernmentsemployprojectprocurementtoincentivizetherecruitmentofdomesticorlocallabor,whereasotherssettargetsforwomen’sworkforceparticipation.•Directuseprojectscangenerategreateremploymentopportunitiesforwomen,youth,andmarginalizedgroups,promotingsocialinclusion.•Prioritizationofgender-sensitivebenefitsharingplansthatrespectlocalculturalnormsandaddressingpotentialsensitivitiesrelatedtofemaleemploymentareneeded,includingcommitmenttoequitablebenefitdistributionamongcommunitymembers,consideringfactorssuchasage,race,andability.Whileconsideringtherecommendationsofferedinthisreport,policymakersandpractitionerswoulddowelltokeepinmindthateachcountryhasitsownuniquecircumstancesthatcallforcustomizedapproaches.ExecutivesummaryCreatingValueBeyondElectricityGenerationThisreporthighlightsthesocioeconomiccontributionsofthegeothermalsector,includingthepotentialopportunitiesandbenefitsthatcanbeenhancedatnationalandlocallevelsthroughoutgeothermalprojects’developmentandoperation.Thereportwaspreparedusingqualitativedatafromover40stakeholdersinthegeothermalindustry,includinggovernments,industryassociations,academia,publicandprivatesectordevelopers,andtechnicalexperts.Quantitativedatawerecollectedfromasurveyof15geothermaldevelopersaroundtheworld.Keylessonsandbestpracticesareoutlinedinthetextandalsoshowcasedacross27casestudies.ThisreportisintendedasacomplementtotheWorldBank(2022b)handbook“ASurePathtoSustainableRenewableEnergy:MaximizingSocioeconomicBenefitsTriggeredbyRenewables,”whichprovidesstep-by-stepguidanceforgovernmentsondesigningrenewableenergyprogramsthatgeneratewidersocietalbenefitsbeyondcleanpowergeneration.Asthehandbookwaslargelytechnologyagnostic,thisreportwasdevelopedtoprovidefurther,in-depthanalysisofthesocioeconomicbenefitsthatcanaccompanygeothermaldevelopmentandoperation.Theintentisthatgovernmentsanddevelopersalikecanlearnfromtheexamplesandcasestudiesfeatured,andreplicatebestpracticestogeneratepositivesocioeconomicoutcomes.Thereportexaminesbenefitsacrossfourcategories,derivedfromtheWorldBank’sSustainableRenewablesRiskMitigationInitiative:•Participationofdomesticcompaniesinthegeothermalvaluechain•Geothermalemploymentandskilldevelopment•Localdevelopmentandbenefitsharing•GenderequalityandsocialinclusionThefollowingsectionoutlineskeyfindingsandbestpracticesacrossthesefourcategories.Genderequalityandsocialinclusionareaddressedthroughanintersectionallens.Whenconsideringtherecommendationsofferedinthisreport,policymakersandpractitionerswoulddowelltokeepinmindthateachcountryhasitsownuniquecircumstancesthatcallforcustomizedapproaches.Itisworthclarifyingthatthisreportfocusesonbenefitsthatextendbeyondtheriskmitigationrequirementsofenvironmentalandsocialsafeguardframeworks.Thereportdoesnotexplorewidersectoraladvantages,suchasthesocietalandeconomicbenefitsofgreaterenergysecurityandreducedgreenhousegasemissions—importantbenefitsacrossallrenewableenergytechnologies.Instead,itsexaminationofsocioeconomicbenefitscentersonwhatcanbeinfluenced—and,importantly,enhanced—duringprojectdevelopmentandoperation.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITSxiiiTheGeothermalValueChain:GeneratingSocioeconomicBenefitsDomesticcompanies’participationinthegeothermalvaluechainholdssignificantpotentialforenhancingthesocioeconomicbenefitstiedtothedevelopmentandoperationofgeothermalprojects.Acomprehensiveunderstandingofthegeothermalvaluechainisessentialinidentifyingareasripeformaximizingthesebenefits.Theavailabilityofdomesticresourcesintheproject’shostcountry(specifically,ofgoods,services,andlabor)couldbeleveragedtolocalizevariousactivitiesacrossthevaluechain.Thiswillenhancevalueadditionandboostthecountry’sgrossdomesticproduct.Identifyinggapsindomesticallyaccessibleresourcesoffersopportunitiestodesignprogramsthatnurturethedomesticgeothermalindustry’scapabilitiesoverthelongterm.Thisstrategicapproachcouldhelpcapturemoreaddedvalue.Notably,thereissubstantialroomforlocalizationeffortsintheconstruction,andoperationandmaintenance(O&M)segmentsofthegeothermalvaluechain.Thisremainstrueevenwheninternationalcorporationsareinvolved,sincesegmentsofworkcanstillbeoutsourcedtolocalentitiesorlaborforces.Whilecertaincomponentssuchasturbines,condensers,coolingtowers,andgeneratorsarespecializedandunlikelytobemanufactureddomestically,arangeofothernecessaryequipment(e.g.,heatexchangers,pumps,valves,piping,andcladding)iscommerciallyavailableandcanbeprovidedbymultiplesuppliers.Governmentsareusingprojectprocurementtoencouragelocalizationalongthegeothermalvaluechain.Incentivesfordeveloperstodomesticallysourcespecificcomponentsandserviceshaveeffectivelynurturedthegrowthofdomesticcompanies.Itisimperative,however,tocarefullyweightheseprocurementstrategiessoasnottojeopardizeprojectviabilityorraiseassociatedtariffs.Clustersandindustryassociationsplayapivotalroleinboostingdomesticindustries’capacities.Theyfacilitatetraining,encourageinteractionsamongstakeholdersfromvarioussectors,andcultivateanenvironmentconducivetotechnologytransferandresearchanddevelopment.Further,domesticcompanieslookingtoadapttheirbusinessactivitiesandexpandoperationstopartakeinthegeothermalvaluechaincouldbeofferedspecializedfinancialproductstailoredtotheiruniqueneeds.Bestpracticestonurtureadomesticgeothermalindustry1.Comprehensiveunderstandingofthevaluechain.Conductavaluechainanalysistoidentifypossibleareasfordomesticcompanies’participation.2.Leveragingofdomesticresources.Capitalizeontheavailabilityofdomesticresources(specifically,goods,services,andlabor)topromotelocalizationefforts.ExplorewaystoxivEXECUTIVESUMMARYmaximizetheuseofdomesticallyaccessibleresources,increasingvalueadditionandboostinggrossdomesticproductgrowth.3.Supportprogramsfordomesticindustries.Identifygapsindomesticallyaccessibleresourcesanddesignprogramstonurturethedomesticgeothermalindustry’scapabilitiesoverthelongterm.Tailorsupportprogramstoaddressspecificneedsandchallengesfacedbylocalcompanies.4.LocalizationinconstructionandO&Msegments.RecognizethesubstantialpotentialforlocalizationeffortsintheconstructionandO&Msegmentsofthegeothermalvaluechain.Encourageinternationalcorporationsinvolvedingeothermalprojectstoengagelocalentitiesorlaborforcesinvariousaspectsofthework.5.Projectprocurementstrategies.Implementprojectprocurementstrategiesthatincentivizetheinvolvementofdomesticcompanieswithoutcompromisingprojectviabilityorraisingassociatedtariffs.Balancelocalizationeffortswiththeneedtomaintainprojects’cost-effectiveness.6.Supportfromindustryclustersandassociations.Promotetheformationofindustryclustersandassociationstoboostthedomesticindustry’scapacities.Theseorganizationscanfacilitatetraining,createnetworkingopportunities,promotetechnologytransfer,andpromotecollaborativeresearchanddevelopment.7.Specializedfinancialproducts.Developspecializedfinancialproductstailoredtotheuniqueneedsofdomesticcompaniesparticipatinginthegeothermalvaluechain.Thesefinancialinstrumentscanprovidecrucialsupportforbusinesseslookingtoadaptandexpandtheiroperations.8.Governmentandindustrycollaboration.Fostercollaborationbetweengovernmentagenciesandindustrystakeholderstoalignpolicies,initiatives,andinvestmentswiththegoalofstrengtheningthedomesticgeothermalindustry.9.Regularevaluationandadjustment.Continuouslymonitortheeffectivenessoflocalizationeffortsandsupportprograms.Bepreparedtoadjuststrategiesbasedonevolvingindustrydynamicsandeconomicconditions.ExpandingTheWorkforceWithGeothermalJobsAndSkillsEmploymentandskilldevelopmentarevitalcomponentsofthegeothermalsector’sgrowth.AccordingtotheInternationalRenewableEnergyAgency,thegeothermalindustryprovidedjobsforabout196,000individuals—anumberprojectedtoriseto296,000by2030.However,theindustrycontinuestograpplewithgenderdisparity,withwomenrepresentingonly22percentoftheoverallworkforce.Womentendtooccupymoreadministrativeandsupportpositionsthantechnicalpositions.GovernmentsandcompanieshavebeentryingtobridgeGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITSxvthesegapsthrough,forexample,progressivepolicies,supportprograms,andtargetstoincreasefemaleemployment.Regardingjobcreation,bothconstructionandO&Mholdsubstantialpotential.Constructionroles,althoughnumerous,areshortterm,lasting2–3years.Conversely,O&Mpositions,thoughfewer,arepermanent,coincidingwiththelifespanofgeothermalfacilities(30yearstoover50years).Intermsofperson-years,O&Mgeneratessignificantlymoreemploymentovertheentireprojectcycle.Directuseprojectsoffernotableemploymentopportunities,especiallyforwomen,youth,andmarginalizedgroups.Thegeothermalsectorfacesskillshortages.Skillgapsareprevalentamonghigh-skilledpositionsandtoalesserextentamongmedium-skilledroles,whereaslow-skilledrolesfacefewerrecruitmentchallenges.Skillgapsnotonlyhinderprojectadvancementbutalsoimpedetheestablishmentofgovernmentpoliciesandinstitutionsthatfosterexplorationandprivatesectorinvestment.Manyskillsnecessaryinthegeothermalindustrycanbetransferredfromthedecliningoilandgassector.Governmentsandcompaniesareactivelyexploringopportunitiestoreskillindividualsfromtheoilandgassector.Thereskillingeffortsaretargetedatnotonlyharnessingcapabilitiesbutalsosustainingemploymentandeconomicprosperity.AddressingskillshortagesinvolvesdevelopingnewgeothermalcurriculaandsendingindividualstoestablishedgeothermalmarketslikeIcelandandNewZealandfortraining.Often,developershireindividualswithoutpriorexperienceinthegeothermalindustryandprovidethenecessaryeducationandon-the-jobtraining,throughformalprogramsorinformalpeerlearning.Sincenotallcountriesmayhavetherequireddemandforgeothermal-specificeducation,manyoptforaregionalapproachtogeothermaleducationandtraining.Expansionofthegeothermalworkforcerequiresbettercommunicationabouteducationalopportunitiesthroughstudentcompetitions,mentorshipprograms,internship,andapprenticeship.Severalgovernmentsemployprojectprocurementtoincentivizetherecruitmentofdomesticorlocallabor,whereasotherssettargetsforwomen’sworkforceparticipation.Thesestrategiescollectivelystrivetofosteramoreinclusiveandskilledgeothermalindustry.Bestpracticestoexpandgeothermalskillsandpromotejobcreation1.Promotegenderdiversityandsocialinclusion.Fosterdiversitybyenactinginclusivepoliciesatbothgovernmentandcorporatelevels.Establishcleartargetsforboostingfemalerepresentation(especiallyintechnicalroles)andfacilitatementorshipandleadershipprogramstoempowerwomenandmarginalizedgroupsinthegeothermalsector.2.Harnessdomesticjobopportunities.RecognizethedomesticjobcreationpotentialoftheconstructionandO&Msegmentsofthegeothermalvaluechain.FocusonpromotingxviEXECUTIVESUMMARYlocalO&Mjobs,sincetheyarelongterm,andpromotingthemcanprovideopportunitiesforstableemploymentoverthelifespanofgeothermalfacilities.3.Prioritizedirectuseprojects.Supportdirectusegeothermalprojectssincetheycangenerategreateremploymentopportunitiesforwomen,youth,andmarginalizedgroups,promotingsocialinclusion.4.Addressskillshortages.Mitigateskillshortagesbyidentifyinggapsanddesigningspecializedtrainingprograms.Considerreskillingtalentfromdecliningindustries,collaboratewitheducationalinstitutionsforgeothermalcurricula,andincentivizedeveloperstoofferon-the-jobtraining.Raiseawarenessofeducationalopportunitiesthroughinitiativeslikecompetitions,mentorship,internships,andapprenticeships.5.Takearegionalapproachtoeducationandtraining.Adoptaregionalapproachtogeothermaleducationandtraining,fosteringcollaborationandresourcesharing.Promoteinternationalknowledgeexchangebysendingindividualstoestablishedgeothermalmarketsfortraining.6.Incentivizedomesticandlocallabor.Implementprojectprocurementproceduresthatincentivizetherecruitmentofdomesticorlocallabor,potentiallypromotingskilldevelopmentandjobcreationwithinaregion.Ensuresuchmeasuresareimplementedalongsideappropriatecapacitybuildinginitiatives.7.Public-privatepartnerships.Fosterpartnershipbetweengovernmentagencies,educationalinstitutions,andprivatecompaniesforjointinvestmentinskilldevelopmentprograms,andensurethatappropriatetrainingandeducationaligntheworkforcewiththeindustry’sneeds.8.Datacollectionandmonitoring.Establisharobustsystemfordatacollectionandmonitoringtotrackprogressingenderandsocialdiversity,jobcreation,andskilldevelopmentwithinthegeothermalsector.Regularlyassesstheimpactofpoliciesandprogramstomakedata-drivenadjustmentsandimprovements.AdvancingBenefitSharingforSustainableDevelopmentGeothermaldevelopmentundoubtedlyoffersapathwaytosustainableenergysolutions,althoughitisimportanttoacknowledgetheaccompanyingrisks(e.g.,occasionalinducedseismicityorreleaseofgases),whichmustbemeticulouslymanaged.Thisunderscorestheparamountimportanceofengaginginmeaningfulconsultationswithlocalcommunitiesandensuringtheequitablesharingofbenefits.Theneedforcommunityengagementgoesbeyondamereformality—itisintegraltothedevelopmentprocess,withanobjectiveofestablishingtrustandcredibility.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITSxviiSecuringasociallicensetooperateisnonnegotiableforgeothermaldevelopers.Thebedrockofthisendeavoristoestablishandmaintainpositive,enduringrelationshipswithcommunities.Suchrelationshipsfosterthetrustandgoodwillnecessaryforsuccessfulcoexistence.Geothermaldevelopersrecognizetheimportanceofequitablebenefitdistributionasacornerstoneofcommunitycollaboration.Transparentinformationiskeyforeffectivebenefitsharing.Comprehensiveconsultationsensurethatcommunities’opinionsarenotonlyheardbutalsointegratedintothedecision-makingprocess.Collaborativeinterventionsthataddresscommunityneedscanhelpbridgethegapbetweenaspirationsandpracticalfeasibility.Balancingcommunities’desireswithrealisticprojectoutcomesisachallengethatdevelopersmustadeptlynavigate.Benefitsharingisbroadlygroupedintothreekeycategories:•Infrastructureandserviceenhancement.Geothermalprojectscancatalyzetheimprovementorintroductionofcriticallocalinfrastructureandservices.Schools,healthcenters,andotherpublicamenitiescanbeenhanced,directlycontributingtocommunitywell-being.•Communityskillandcapabilityenhancement.Empoweringlocalcommunitiesthroughtrainingingeothermal-relatedskillscanpavethewayfortheirintegrationintothegeothermalworkforce.Thisempowermentextendsbeyondtheimmediateproject,sincenewfoundskillscanbeusedinotherindustriesaswell,strengtheningtheoveralleconomiclandscape.•Revenue/ownershipsharingarrangements.Geothermaldevelopersrecognizethevalueofsharedprosperity.Revenueandownershipsharingmechanismsfosterasenseofcollectiveownershipandresponsibility.Thesemechanismscouldincludeequitystakesforacommunityinaproject,dedicatingportionsofrevenuetocommunity-controlledentitiesliketrusts,orcollaboratingwithlocalgovernmentstoallocateapercentageofrevenueforcommunaldevelopment.Insomejurisdictions,legalframeworksmandatethelocalizeddistributionofbenefits,utilizingmechanismssuchasroyaltiesandproductionbonuses.Theinclusionofbenefitsharingconsiderationsinprocurementdocumentscouldhelpaligndevelopers’actionswithcommunities’expectationsandgovernments’developmentplans.Embracingpoliciesthatchampiongenderequalityandsocialinclusionfurtherenrichestheengagementprocess,promotingtheparticipationofwomenandmarginalizedgroupsingeothermaldevelopment.Whileinterventionstofostercommunityengagementandsharebenefitsmightinvolvefinancialimplications,thecostsaredwarfedbythevalueresultingfromavoideddelaysandlegalentanglements.Cultivatingenduringtrustandforgingstrongrelationshipswithcommunitieswillrequiregeothermaldeveloperstoformadedicatedteamthatmirrorsthecommunity’sdiversity.xviiiEXECUTIVESUMMARYBestpracticesforsharingbenefitswithlocalcommunities1.Understandingcommunityneeds,governmentpriorities,andfeasibility.Alignlocalcommunities’needswithgovernmentprioritiestofacilitatethecreationofbenefitsharingprogramscontributingtocommunityaswellasdevelopmentgoals.Recognizethatinvestingincommunityengagementhaslong-termbenefits,andpreventsdelaysandlegalissues.2.Meaningfulcommunityconsultationsthatestablishtrust.Buildtrustthroughongoing,meaningfulcommunityconsultations.Involvecommunityinputindecision-making,prioritizetransparencyinsharingproject-relatedinformation,andmaintainengagementthroughoutaproject’slifecycle.3.Baselinedatacollectionandmonitoring.Collectbaselinedatatomonitorandtrackthesuccessofbenefitsharingprograms.Continuouslyassessandadjustprogramsbasedonfindingstoensuretheyremaineffectiveandresponsivetoevolvingcommunityneeds.4.Communityinvolvementinbenefitidentification.Activelyengagelocalcommunitiesinidentifyingopportunitiestosharebenefits,ensuringthattheirinputisintegratedintoprojectplanning.Engageinscopingactivitiesthatincludeconsultationswithanarrayofstakeholders,reflectingthediversityofcommunityvoices.5.Gender-sensitiveandequitablebenefitsharing.Prioritizegender-sensitivebenefitsharingplansthatrespectlocalculturalnormsandaddresspotentialsensitivitiesrelatedtofemaleemployment.Committoequitablebenefitdistributionamongcommunitymembers,consideringfactorssuchasage,race,andability.6.Investinlocalinfrastructureandservicesforlong-termgains.Exploreopportunitiesforimprovinglocalinfrastructureandessentialservices,includingroads,watersupply,schools,andhealthcarefacilities.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITSxix7.Developtheskillbasewithinlocalcommunities,inturnbuildingeconomicresilience.Identifyandfacilitateskilldevelopmentopportunitiesforcommunitymembers,especiallyinconstructionandO&Mroles.Considerbroaderskilldevelopmentinitiativesthatempowerthelocalworkforceandcontributetoeconomicgrowth.8.Sharethefinancialrewardofgeothermalprojects.Explorerevenueandownershipsharingarrangements,includingequitystakes,communitytrusts,andotherrevenuesharingmodels.9.Learnfrombestpractices.Documentandlearnfromexperiencesinothersuccessfulgeothermalprojects.Shareknowledgeandinsightswithlocalcommunities.Improvecommunityengagementbycollaboratingwithsuccessfulexamplesfromothercountriesandreplicatesuccessfulbenefitsharingmodels.10.Enhancelegalframeworksforbenefitsharing.Examinelegalframeworksthatextendbeyondmerecompensationforadverseeffectsandincorporatecomprehensivebenefitsharingstrategies.Evaluatethefeasibilityofthemandatoryintegrationofbenefitsharingplansingeothermalprojectdevelopmentsothatcommunityinterestsarerepresentedeffectively.Further,includebenefitsharingprovisionsinprocurementdocumentstoalignprojectactionswithcommunities’expectationsandgovernments’developmentobjectives.xxEXECUTIVESUMMARYONE.HARNESSINGEARTHHEATAstheclimatecrisisandglobalenergychallengescontinue,thereisagrowingneedtoutilizerenewableenergysources.GeothermalenergyisheatgenerateddeepinsidetheEarth’score.Thisenergycanbeharnessedfromgeothermalreservoirsfoundinmanyplacesacrosstheworld.Alongwithotherrenewableenergytechnologies,geothermalpresentsanexcellentsolutiontosustainablymeetingenergyneedsforthecountriesthatcanaccessit.Consideringthatgeothermalpresentsareliableandconstantlyavailablepowersourceregardlessofseason,climate,orweatherconditions,italsoofferscertainuniqueadvantagesoverotherenergysources.Asabaseloadenergysource,geothermalwillplayacriticalroleintheenergytransitionandasacomplementtootherrenewableenergysources.Unlikefossilfuelsourcesofbaseloadpower,geothermal-basedenergyisproducedattheextractionpoint.Whetherusedforapowergenerationfacilityorfordirectapplication,geothermal-basedenergyimprovesenergysecuritysinceitisderivedfromalocalresource,meaninglessrelianceonongoingfuelimportstosupportgeneration.Thetermgeothermalmeans“earthheat.”Thisheatmaybeusedinmanyapplications,includingtheonesdescribedbelow:1.Electricitygeneration:Medium-tohigh-temperature/high-enthalpy1resourcesareusedtogenerateelectricityusingaflashorbinarytechnology.Suchprojectstendtobelargesoastoachieveeconomiesofscale.However,smaller-scaleelectricitygenerationprojectsdoexist.2.Directuse:Low-tohigh-temperature/high-enthalpyresourcesmayprovideheatdirectlyorviaheatexchangers.Geothermalenergyhasmanydirectuseapplications,forexample,intourism(e.g.,thermalbathsandtherapeuticbalneology),agriculture(e.g.,greenhouses,fooddrying,soilwarming),andspaceheating.Theapplicationscouldbeofaverysmallscale(e.g.,householdheatpumps),toverylargeapplications(e.g.,communitywidedistrictheatingsystems).Directuseprojectsmaybedevelopedindependentlyorincogenerationwithelectricitygenerationprojects.Multipleusersmaysharethesamesourceincascadingsystemsasthegeothermaleffluentisutilizeddownstream.Thisreportprovidesexamplesfordirectuseaswellaselectricitygeneration.Itdoesnot,however,addresssmall-scalehouseholdapplications.Theinstalledgeothermalcapacityremainsnominalincomparisonwithotherrenewableenergytechnologies,despitethewidescalepotentialforgeothermalenergyandthebenefitsthatitcanbring.Atotalof7,468,058gigawatt-hours(GWh)ofrenewableenergywasproducedgloballyin2020;geothermalhada1.27percentshareinthistotalproduction(IRENA2022b).Althoughtheoverallproductionappearssmall,geothermalenergyplaysacriticalroleintheenergymixofahandfulofcountries.Forexample,geothermalenergyaccountsfor66percentoftheprimaryenergyuseinIceland,wheregeothermalpower1.Enthalpyisapropertyofathermodynamicsystem.Itisdefinedasthesumofthesystem’sinternalenergyandtheproductofitspressureandvolume.Thesequalitiesdefinethequalityofageothermalresource.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS1plantsgenerate25percentofthetotalelectricity(Orkustofnunn.d.).ThecontributionofgeothermalenergyissignificantinKenyaaswell.In2021,Kenyahadaninstalledgeothermalcapacityof863megawatts(MW),andgeothermalenergyproductionaccountedfor48percentofallelectricitygeneration(Richter2022).Also,geothermalisfarmoreefficientthanotherrenewables.InTürkiye,forexample,1,608MWofgeothermalcapacitygenerated3percentofthecountry’stotalelectricitysupply,whereas9,000MWofsolarcontributedonly2percent(WorldBankmarketsounding2022).Governmentsareincreasinglyrecognizingthepotentialfordevelopinggeothermalresourcestomitigatecarbonemissionsandimproveenergysecurity.IntheUnitedStates,geothermalenergyrepresentslessthan1percentofoverallenergygeneration,althoughin2022,thegovernmentcommitted$165millionforresearchanddevelopmentinnewgeothermaldevelopment(Hampton2022).Althoughgeothermaldevelopmenthasthusfarcenteredonelectricitygeneration,thereissignificantpotentialfor—andgrowingrecognitionsurrounding—thesocioeconomicbenefitsofdirectuseapplications,forexample,inspaceheatingandcooling,agricultureandagro-industries,andindustrialuses,aswellasinrecreationandtourism.In2019,theestimatedinstalledthermalpowerfordirectutilizationwas107,727megawattsthermal(MWth)(LundandToth2020).InregionssuchasEuropeandAsia,geothermalheatinghasbecomecostcompetitivewithfossilfuelalternatives.Thisledtoa52percentgrowthingeothermalenergyforheatingapplicationsover2015–20(IRENA2022a).Geothermalheatingfindsapplicationmainlyinthreesectors—industry(4percent),agriculture(16percent),andresidentialandcommercialbuildings(80percent)(LundandToth2020;IRENA,IEAandREN212020).Thereisalsoenormouspotentialtocreatesymbioticsystemsthatintegrategeothermalelectricitygenerationanddirectuseapplications.Aftergeothermalresourceshavebeenutilizedtogenerateelectricity,thegeothermaleffluentstillcontainsheat.Thisheatcanbeutilizedforotherapplicationsthatrequirelowertemperatures(seefigure1.1).Inahighlyefficientsystem,thischaincancontinue,withtheeffluentcontinuingtopasstolower-temperatureapplications.Thiswouldreducewasteheatandcontributetomoreeconomicactivities—inwhatisknownasacascadingsystem.Suchsystemscanbedevelopedatalargescale,forexample,withinanindustrialpark,oratasmallerscale,tobringadditionalbenefitstocommunitiessurroundingsuchprojects(e.g.,ageothermalfooddryingsystemorgreenhouseagriculture).TheGeothermalResourceParkinReykjanes,Iceland,forexample,hastwogeothermalpowerplants(withtotalinstalledcapacityof174megawattselectricaland150MWth)fordistrictheating.Italsohostsmanycompaniesthatbenefitfromthesharedinfrastructurecostsandhigh-qualityelectricityandheatsupply.Thecompaniesutilizesteam,atvaryingtemperatures,andotherproducts,suchasbrine(heat),carbondioxide,silica,andhydrogensulfide,intheirproduction(IRENA2020;WorldBankmarketsounding2022).Box1.1detailsotherwaysinwhichIcelandhascreatedvaluethroughdirectuseprojects.2ONE.HarnessingEarthHeatFIGURE1.1ExamplesofdirectusesofgeothermalenergyTemperature(°C)1050100150200FlashcycleSpaceheatingandcoolingSpaceheatingSnow-melting/De-icingAbsorptioncoolingGroundsourceheatpumpsBathingandrecreationPoolsandSPASAgro-industrysectorGreenhouseheatingAquacultureFoodprocessingSoilwarmingMushroomcultureSterilizationFishmealdryingPicklingBeetsugarpulpdryingTimberdryingPasteurizationMaltbeverageBeewaxmeltingDistilledliquorsMilkevaporationSugarevaporationFruit/vegetabledryingSoftdrinksGrains/fishdryingWheycondensingAbsorptioncoolingWashingPre-heatingandheatingIndustrialusesBiogasprocessesCoaldryingCementdryingConcretecuringTextilemillLeatherPulpandpaperAcrylicAggregatedryingAbsorptioncoolingStyreneRubbervulcanizationElectricity(indirectuse)BinarycycleSource:AdaptedfromLindal1973.Source:WorldBank2022a.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS3BOX1.1ICELAND:CREATINGVALUEBEYONDELECTRICITYGENERATIONWhenhigh-enthalpyresourcesareusedforpowergeneration,thebenefitsneednotstopatcleanelectricity.Iceland,amongothercountries,hasdemonstratedtheimmensepotentialandsocioeconomicimpactofpromotingcascadingusesofgeothermalheat.Iceland’sgeothermalsectorsuccessfullyrepurposesgeothermaleffluentafterithasbeenusedtogenerateelectricity.Therepurposingenablesusingthiseffluent,whichwouldotherwisebewasted,whileitisstillhotandmakesitviableforotherapplications.ExamplesofrepurposingincludetheBlueLagoon,worldrenownedforitsbalneotherapy,andReykjavík’sextensivedistrictheatingsystems.Further,geothermallow-tomedium-enthalpyresourcesareuseddirectlyfordistrictheating(Fludir)andingeothermalheatedgreenhouses(e.g.,Friðheimar)thatallowfarmerstogrowproduceyear-roundinanorthernclimate.Often,theavailabilityoflower-costheatingmakestheseindustrialactivitiesextremelycostcompetitive.Businessgrowthisbenefitedenormouslyinturn.Thedevelopmentoftourism,agriculture,andotherindustrialapplicationssymbioticallywithgeothermalelectricitygenerationcanbesignificanttothecreationofneweconomicopportunities.ThesuccessfulcaseoftheBlueLagoonhighlightsthepotentialforsocioeconomicbenefitsextendingbeyondthosecreatedbypowerproduction.In2019,thecompanypostedgrossprofitsof€22million,employed809people,andpaid€5.8millionintaxestotheIcelandicgovernment.Source:WorldBankmarketsounding2022;Zhaoetal.2019;BlueLagoon2019a,2019b.4ONE.HarnessingEarthHeatManycountriesaredevelopingregulatoryframeworkstosupportmoredirectuseprojects,whicharedevelopedeitherinconjunctionwithgeothermalelectricitygenerationorasstandaloneprojectsthatcantapintomorewidelyavailablelower-enthalpyheatsources(asdetailedinbox1.2).Whilethisreportdoesnotdelveintothedetailsofdesigningandimplementinganenablingenvironmentforthedevelopmentofgeothermalresources,theEnergySectorManagementAssistanceProgram(ESMAP)offersaseriesofotherresourcesthatdoso.TwoimportantguidesincludetheGeothermalHandbook:PlanningandFinancingPowerGeneration(WorldBank2012)andDirectUtilizationofGeothermalResources(WorldBank2022a).Annex1ofthepresentreportprovidesausefuloverviewoftheimportantroleplayedbythepublicandprivatesectorsingeothermalresources’development,andinenhancingsocioeconomicoutcomesatthenationalandlocallevel.Photo:WorkersatafishdryingfacitlityinIcelandwhichutilizesgeothermalheat.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS5BOX1.2GLOBAL:ATRANSPARENTREGULATORYFRAMEWORKCANATTRACTINVESTMENTANDMAXIMIZEBENEFITSThenatureofgeothermalenergyrendersthedevelopmentandimplementationofregulationspotentiallycomplex.Dependinguponthecountrycontext,geothermaldevelopmentmayberegulatedbyavarietyofgovernmententities,includingthoseoverseeingmineralextraction,thosecontrollingtheuseoflandandwaterresources,orthoseoverseeingenergyproduction.Meanwhile,havingaclearandstraightforwardregulatoryframeworkhasproventofacilitateagreaterinfluxofprivateinvestmentintothesector.Geothermalcompaniesanddevelopersneedaclearviewonwhattheycanandcannotdo,andtheprocessandtimelinetoobtaintherequiredapprovals.Manycountriesarebeginningtoimplementregulationswithaspecificfocusongeothermalenergy.Theyrecognizethatthenatureofgeothermalenergymeansitneedsuniqueregulations,whichdifferfromthoseforotherrenewableenergytechnologies.Thevastmajority,however,havefocusedsolelyonelectricitygeneration.Thishaslimitedtheimmensepotentialfordirectuseapplicationsofgeothermalenergy,andthesignificantsocioeconomicbenefitspotentiallyaccompanyingtheseprojects.Indonesia,acountrywithanexistinggeothermallawforelectricitygeneration,isnowdevelopingspecificlegislationtoguidethedevelopmentofdirectuseprojects.Thegovernmenthasrecognizedanuntappedpotentialforutilizinggeothermalheat,withapplicationsrangingfromthoseintourismtoagriculture,andthewidespreadsocioeconomicbenefitsassociatedwiththeseprojects.Whilethenewlegislationisbeingcreated,thegovernmentisactivelyattemptingtofacilitatedirectuseprojectsbyprovidingtechnicalguidancesessionsontheprocessforobtainingbusinesspermitsundertheexistinglegislation.BBALegal,acorporatelawfirm,offersausefuldatabase,whichoutlinesapplicablegeothermalrulesandregulationstoexplore,exploit,orproduceelectricityin16countries,includingCanada,Chile,Ethiopia,France,Germany,Iceland,Indonesia,Italy,Japan,Kenya,Mexico,NewZealand,thePhilippines,Türkiye,theUnitedStates,andVietnam.Privateinvestorscanutilizethisdatabasetobetterunderstandtheregulatoryapprovalprocessforaproject,oritcanbeusedbycountrieslookingtodeveloptheirownuniquegeothermalregulatoryframeworks.Source:WorldBankmarketsounding2022;BBALegal(http://www.geothermal.bba.is).MoreinformationonBBALegalisavailableathttps://www.bbafjeldco.is/about.6ONE.HarnessingEarthHeatUnderstandingtheSocioeconomicBenefitsofGeothermalProjectDevelopmentGeothermalenergyprojectspresentanopportunityfornationalaswellaslocalsocioeconomicdevelopment.Onemeasurableeconomicgainisnewemploymentopportunities.Eachmegawattinstalledtranslatesintoanestimated34jobs—muchhigherthanthe19jobscreatedforwindpowerand12jobscreatedforsolarphotovoltaics(Enel2023).Thesedirectjobsarecreatedduringthedesign,construction,andoperationofageothermalelectricityproject.Geothermalprojectsalsocreateindirectjobsinupstreamindustriesprovidingsuppliesandservicestothegeothermalindustry(e.g.,thoseinequipmentmanufacturing).Inaddition,avastnumberofinducedjobsarecreatedduetospendingbythosewhoaredirectlyandindirectlyemployedinthegeothermalindustry.Forexample,duringconstruction,workerswillnecessarilyspendaportionoftheirincomewithintheprojectcommunity.Thiswillresultinmorejobsatrestaurantsandshops,intransportation,andinhospitality.Researchsuggeststhatlocaljobcreationimpactsarefurtheramplifiedamongdirectuseprojects(creatingdirect,indirect,andinducedjobs),andthattheseprojects,inparticular,couldcreateagreaternumberofqualityjobsforwomen(WorldBank2022a).Severalofthecasestudiesinchapters3and4exemplifythejobcreationpotentialofdirectuseprojects.Newemploymentopportunities,particularlyinruralandlow-incomecommunities,canhaveanimmensesocialimpact.Theseimpactsarediverseandcomplexbutcouldleadtoareductionofdomesticviolence,improvesocialprotection,andprolongeducationforchildrenastheydonotneedtoworktosupportthefamily(WorldBank2020;ILO2022a;UN2021).Therewillalsobefiscalbenefitstogovernments,notonlyduetoincometaxesonthoseemployeddirectlyorindirectlyinthegeothermalsector,butalsofromtaxesonbusinesses,taxesongoodsandservices,royaltiesforresourceuse,andlandleasingagreements.Theavailabilityofreliable,stable,andaffordableenergy(bothheatandelectricity)mayhaveamorefar-reachingeconomicimpactasitcouldhelpattractindustrialplayersinestablishinglocaloperationsandcontributetothegrowthofsmallandmediumenterprises(seebox1.3).Althoughitismorechallengingtoquantifythisonaproject-specificbasis,energyaccessmayalsoresultinmanymore“productiveuse”jobsandbetterjobquality,withimprovedworkingconditions,higherwages,andmoreformalemployment.Whilebothsocialandeconomicbenefitsaresignificant,economicbenefitstendtobemoreeasilyquantifiedthansocialbenefits.Socialbenefitsmayincludeneweducationopportunitiesandattainment,skilldevelopment,andskilldiversification.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS7BOX1.3KENYA:ECONOMICGROWTHANDDIVERSIFICATIONRESULTINGFROMAGEOTHERMALPARKOserianbeganin1969asasmallvegetablefarminNakuruCounty,Kenya,withjusteightemployees.Inthe1980s,Oserianventuredintorosecultivationandbegansellinglong-stemrosestothecommercialmarket.In2000,OserianapproachedKenGen,thegovernmententitychargedwithelectricitygeneration.KenGenhaddrilledanexploratorywellonOserianproperty.Whilethewellwassuitableforlarge-scalepowergeneration,itwasleftunutilized,eventhoughitcouldprovideheatforotheruses.Oserianrecognizedthispotentialtoprovideheating(andlaterelectricity)foritsgreenhouses.TappingintogeothermalheatenabledOseriantoexpandrapidly.Temperaturecontrolofitsgreenhouseswouldotherwisehavebeencostprohibitive,butwithgeothermalheat,Oseriancouldcreateoptimalconditionstomaximizeitsroseproduction.Byincreasingthegreenhouses’temperature,Oseriancouldlowerthehumidityand,consequently,reducefungalgrowthonroseleaves.In2004,Oserianwentontodevelopthefirstwellheadplantinthecountryanddevelopedasecondwellheadplantin2007.Thetwowellheadplantshaveacombinedcapacityof3.2megawatts(MW).In2018,thecompanyalsoadded1MWofsolartoitsminigrid.In2021,Oseriansolditsroseoperations,whichcoveredover100hectaresofgreenhousespace.Atthetimeofthesale,Oserianhad3,000peopleemployedinthegreenhousesand25employedinplantoperationandmaintenance.Thecompany’sbusinessmodelhassinceevolved,anditnowoperatesasautility,providingheat,power,andwatertoindustrialcustomers.8ONE.HarnessingEarthHeatBOX.1.3(CONTINUED)Oserianisspearheadingthedevelopmentofarenewableenergyindustrialparkandmarketingtheopportunityforindustrialplayerstotakeadvantageoftheaffordable,reliable,andcleanpowerandheatitisproducing.Oserian’scurrentcustomersincludeBohemian(thenewownersoftherosecompany),afishfarm,afactoryproducinganimalfeed,acompanyraisinginsectsforbiologicalpestcontrol,andseveralothers.Thisindustrialhubhascreatedavarietyofdirectandindirectemploymentopportunitiesandiscontributingsignificantlytotheregion’seconomicgrowthanddiversification.Attheprojectsiteandcommunitylevel,improvementsandadditionstoinfrastructurecanhavefar-reachingsocioeconomicimpacts,fromimprovedmobilitytobetterhealthcareandeducation,toimprovedincomegenerationprospectsandexpandedsmallbusinessopportunities.Infrastructureprojects,bothrelatedandunrelatedtogeothermalprojects,arecommonplacewithinprojectcommunities.Becausegeothermalprojectsareoftenlocatedinremoteareas,developerswillconstructroadsforsiteaccessandbuildwatersupplysystems.Thesecansometimesbesharedwiththelocalcommunity.Further,togaincommunityacceptanceanda“sociallicensetooperate,”developersoftendedicatefundsforinfrastructuredevelopment,whichwillbenefitcommunities(e.g.,newschoolsandclinics).Whatisperhapsuniqueaboutgeothermalenergy,comparedwithotherrenewableenergytechnologies,isthatlocalcommunitiescanutilizeheat(directuse)downstreamfrompowergeneration,orstandaloneprojectscouldsupplythisheat.Thedevelopmentofdirectuseprojectsinagriculturehasbeenshowntohavesignificantsocioeconomicbenefits,includingbetterfoodsecurity.Forexample,geothermalheatcanbeusedtocreateoptimalconditionsforgrowingcropsingreenhouses.Thisinturnmitigatestheadverseimpactsofpestsandfungalgrowthandimprovescropyield.Geothermalheatcanalsobeutilizedforpostharvestpreservationtodry,dehydrate,andstorefood,andinturnminimizespoilage(IRENA2022a).Geothermalfooddryingalonerepresentsanopportunitytoincreasetheglobalavailabilityoffoodbyanestimated20percentifthetechnologyiswidelydeployedandscaledup(IRENA2022a).Figure1.2highlightscertainsocioeconomicbenefitsthatmayberealizedthroughthedevelopmentandoperationofgeothermalprojects.Althoughlistedseparately,forthereader’sease,thesefactorsareintrinsicallylinked.Forexample,lucrativeemploymentwillresultinbetteroutcomesinhealthandeducation,amongothers.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS9Again,thisreportfocusesonsocioeconomicbenefitsthatextendbeyondtheriskmitigationrequirementsofenvironmentalandsocialsafeguardframeworks—andthatcanbeactivelyinfluenced,andnotablyimproved,duringprojectdevelopmentandoperation.Itdoesnot,however,delveintothebroadersectoraladvantages,suchasthesignificantsocietalandeconomicbenefitsduetogreaterenergysecurityandreducedgreenhousegasemissions—acommonoutcomeacrossallrenewableenergytechnologies.FIGURE1.2EconomicandsocialbenefitstobeexpectedfromgeothermalprojectsGovernment•Domesticeconomicgrowth•Privatesectorinvestmentsingeothermalmarkets•Revenuegenerationfromtaxes•Costsavingsonfossilfuels•Improvedlegislation•InfrastructureexpansionDevelopers•DecreasedrisksCommunities•Investmentsincentives•Skilldevelopmentanddiversiﬁcation•Communityacceptance/sociallicensetooperate•Stabilizationofelectricitysupply,resultinginbusinessgrowthandincreasedindustrialactivity•Localemploymentopportunities;skilldevelopmentanddiversiﬁcation•Infrastructureimprovements(e.g.roads,schools,healthclinics,andwatersupply)•Improvedeconomicoutcomesinagriculturethroughreducedspoilageandimprovedcropyield•Incomegenderequality•Securityincommunities,socialcohesion•GreaterawarenessandunderstandingaroundgeothermalenergySource:DerivedfromWorldBankmarketsounding(2022).Forthepurposeofthisreport,thesocioeconomicbenefitsexploredhavebeengroupedintofourcategories,asillustratedinfigure1.3.ThesecategoriesarederivedfromtheWorldBank’sSustainableRenewablesRiskMitigationInitiative:1.Participationofdomesticcompaniesinthegeothermalvaluechain.Thedevelopmentandoperationofgeothermalprojects(fordirectuseandelectricitygeneration)willcreateahostofnewopportunitiesfordomesticcompaniestoprovidegoodsandservices.Contractscanvarygreatlyinsize,forexample,fromalarge-scalecontractforcivilworkstoasmall-scalecontracttoprovideemployees’uniforms.10ONE.HarnessingEarthHeatRegardlessofsize,contractswillhaveapositiveeconomicimpactonthecountrieswheregeothermalprojectsarebeingdeveloped.Theprojectswillcontributetogovernments’fiscalrevenues,thegrossdomesticproduct,andjobgrowth.2.Geothermalemploymentandskilldevelopment.Thedevelopmentandoperationofgeothermalprojectswillcreatenewdirect,indirect,andinducedjobs.On-the-joblearningandformaleducationopportunitieswillresultinnewskillsandgreaterskilldiversityinthenationalworkforce.Theywillalsogeneratemoredomesticemployment.3.Localdevelopment/benefitsharing.Developerswillworkwithlocalcommunitiestoassesshowtheycanbringlastingbenefitsandgaincommunitymembers’acceptanceofnearbyprojects.Approachesvarygreatlydependingondevelopers’andcommunities’needsbutmayincludetheadditionofnew(orupgraded)infrastructure,skilldevelopmentprograms,ormechanismstoshareprojectrevenue.Localcommunitiescanbenefitfromgainingaccesstoelectricityaswellasheat.4.Genderequalityandsocialinclusion.Whendesignedcarefully,geothermalprojectscanimprovegenderequalityandthesocialinclusionofthosedisadvantagedbasedontheirsocialidentity(ethnicity,age,class,disability,andgender).Thebenefitsandoutcomesinthisregardincludeaccesstojobopportunities,educationandtraining,businessopportunities,andlocaldevelopmentinitiatives.Thisreportcoversthefirstthreecategoriesinthesequenceshowninfigure1.3.Thefourthcategory,genderequalityandsocialinclusion,isaddressedthroughanintersectionallensacrossthereport,recognizingtheinterconnectednessofsocialidentityandthewayidentitiesinteracttoreinforceinequalitiesorcanbeleveragedtoachieveequity.Theinformationforthefoursocioeconomiccategorieswasderivedfromextensiveliteraturereviews,consultations,anddatareceivedfromstakeholders(seeannex2formethodology).FIGURE1.3SocioeconomiccategoriesDomesticparticipationinthe3geothermalvaluechainLocal1Maximizingthe2developmentparticipationofImprovingdomesticdomesticﬁrmsintheskillsandemploymentgeothermalvaluechainingeothermal4GenderequalityandsocialinclusionSource:AdaptedfromWorldBank(2022b).Note:RE=renewableenergy.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS11TWO.THEGEOTHERMALVALUECHAINThegeothermalvaluechainisthesequenceofbusinessactivitiesandprocessesinvolvedinharnessinggeothermalpowertogenerateelectricityorgeothermalheat.Inthisreport,thevaluechainofthegeothermalindustryisbrokendownintoitssegments.Inadetailedvaluechainanalysis,alltheinputsrequiredtoprogressfromonesegmenttothenext,includingthenecessarygoods(rawmaterials,equipment,etc.),services,andlaboraredocumented.Mappingandutilizingthegeothermalvaluechaincanhelpto:•Identifyopportunitiestomaximizethesocioeconomicbenefitsofdevelopingandoperatinggeothermalprojects,andimproveoutcomes;•Understandtheinputsrequiredtoachievetheendproductofgeothermalpowerand/orheat;•Assessthegoods,services,andlaborthatcanbeprovideddomestically,creatingaddedvalueandcontributingtothegrossdomesticproductofthecountrywhereaprojectisbeingdeveloped;•Identifygapsindomesticskills,materials,andsoon,andassesswhatlabor,goods,andserviceswillneedtobebroughtinasimportsintheshorttolongterm;•Assesswhatsupportprogramsmayberequiredtoaddressgapsandsteadilyincreasetheprovisionofdomesticgoods,services,andlabortothegeothermalvaluechain.Figure2.1depictsthegeothermalvaluechainforbothelectricitygenerationanddirectuse,fromtheearlyplanningphasetothepointofheatorelectricityproduction.Itshouldbenotedthatfordirectuseprojects,theactivitiesalongthevaluechainincludetheplanning,construction,andoperationandmaintenance(O&M)ofonlythegeothermal-specificcomponentsofaproject.Forexample,forageothermal-heatedgreenhouse,theactivitiescapturedinthevaluechainwouldincludethegeothermalwell,heatcentrals,andpipingnetwork.Itwouldnotconsiderthegreenhouseinfrastructureitself.DomesticParticipationInTheGeothermalValueChainEachsegmentandsubsegmentofthegeothermalvaluechainhasauniquemarketstructure,rangingfromhighlyconcentrated,asinthecaseofthemanufactureandsupplyofgeothermalturbinesandgenerators,tohighlycompetitive,asinthecaseofpowerplantconstructionandinstallation,includingsteam-gatheringsystems.Contributionstogrossdomesticproductwillcomefromthegoods,services,andlaborineachsegmentthatcanbeprovideddomestically,or“localized.”Relevantministries,utilities,andgovernmentagenciescanchoosetoaidinlocalizingvaluechainsegmentsthroughsupportiveprogramsandenablingpolicies.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS13FIGURE2.1Thegeothermalvaluechainanditslife-cyclecosts,bysegmentshare•ResourcemappingLegislationandplanning<5%•Geothermalenergyplanning•Stakeholderconsultation•PolicyandregulationdevelopmentEnablinginfrastructure<5%•Preliminaryenvironmentalandsocialimpactassessmentinvestments•Infrastructuredevelopment•Powercontracting•ExplorationdrillingFeasibility,ﬁnancing,10–20%•SocialandenvironmentalImpactassessmentandprojecttendering•Permitting•Infrastructuredevelopment(e.g.,Roads,logisticscamps)•Testdrilling•FinancialmodelingProjectdesignand20–40%•Plantandsteamﬁelddesignprocurementofinputs•Powercontracting•ProductiondrillingManufacturingofequipmentandcomponents•Procurementofmaterial•SocialandenvironmentalImpactassessment•CommunityengagementConstruction,transport,30–50%•Powerplantconstructionandcommissioning•Steamﬁelddevelopment•Installationofdistribution/transmissionlines•Testing•Commissioning•CommunityengagementOperationand15–25%•Testingofwellsmaintenance•Environmentalmonitoring•Drillingofmakeupproductionwellsandinjectionwells•Maintenanceandupgradingofplant•Maintenanceofequipment•MonitoringperformanceofgeothermalreservoirDecommissioning<5%•Managementofsolidwasteandrecycling•RepurposingofpowerplantfacilitiesandmaterialsSource:WorldBank2022bandWorldBankmarketsounding2022.Note:Figureassumesa25-yearprojectlifecycle.Manufacturingsitsoutsidethevaluechain,sincemanycomponentswillbemanufacturedoutsideprojectcountries.Geothermalturbines,condensers,coolingtowers,andgeneratorsarehighlyspecializedpiecesofequipment,whicharemanufacturedinonlyahandfulofcountries.Somecomponentssuchasheatexchangers,pumps,valves,piping,andcladdingmaybemanufactureddomestically.14TWO.ThegeothermalvaluechainPartsofthevaluechainthataremorecompetitive,withmoreplayersprovidingthesamegoods/services,tendtobeeasiertolocalizeastheyarelessspecialized.Forexample,itmayberelativelyeasytolocalizetheconstructionoftheinfrastructurerequiredtoaccessandutilizegeothermalsites(suchasroads,laborhousing,andwatersupplynetworks).Someactivitiesthatrequirehighlyspecializedexpertiseandlargeinvestments(suchasthecaseforthemanufacturingofsteamturbines)areveryunlikelytobelocalized(seebox2.1).Thepotentialforlocalizationwillalsobegreatlyinfluencedbyacountry’sexistingresources,theavailabilityofcompaniesthatcanprovidegoodsandservices,andtheexistingskillbaseofthedomesticworkforce(WorldBank2022b).Otheractivitiesmaybecomefeasibleovertimeasamarketdevelopsorasskillsarebuilt.Iceland,forexample,hasbeenabletodevelopthecapacitynecessarytomaintainmostofthegeothermalequipmentwithinthecountry(seebox2.2).GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS15BOX2.1LOCATINGTHEMANUFACTUREOFGEOTHERMALEQUIPMENTThemanufacturingofgeothermalturbines,condensers,coolingtowers,andgeneratorshasbeenillustratedasaninputtothegeothermalvaluechainratherthanapartofthevaluechain.Manufacturingisconsideredupstreambecauseitisusuallyconductedinadifferentlocationthantheinvestment.Inaddition,themarketishighlyconcentrated,withonlyalimitednumberofcompaniessupplyinggeothermalturbines,condensers,coolingtowers,andgeneratorunits(WorldBank2012;NREL2018).Binary-cycleturboexpandersaremanufacturedinIsrael,theUnitedStates,Italy,andGermany,withIsraelaccountingfor74percentofthemarket(NREL2018).FlashcyclegeothermalsteamturbinesaremanufacturedinJapan,Italy,theUnitedStates,France,Mexico,theRussianFederation,India,andChina,withJapanaccountingfor82percentofthemarket(NREL2018).Allturbines,condensers,coolingtowers,andgeneratorsareproducedinfactoriesthatrequirehighcapitalexpenditure,significantresearchanddevelopment,andprotectedintellectualpropertyandpatents.Giventhehighcapitalexpenditurerequiredforfactoriesandthemarketconcentration,generallyitisnotadvisablethatcountriesspendtheirresourcesinlocalizingthemanufactureofthesetypesofequipment.Muchoftheotherequipmentrequiredforageothermalpowerplantordirectusefacility,however,areoff-the-shelfproducts,providedbymultiplesuppliers(e.g.,heatexchangers,pumps,valves,piping,cladding).Themanufacturingofthesecomponentscanbemoreeasilylocalized.Source:NREL2018;WorldBankmarketsounding2022.16TWO.ThegeothermalvaluechainBOX2.2ICELAND:DEVELOPINGDOMESTICMAINTENANCECAPACITYInmostcountries,themaintenanceofgeothermalturbines,gensets,andotherspecializedequipmentisoutsourcedtoequipmentmanufacturers.Thisisconsiderablyexpensive,notonlybecauseofthecostofshippingtheequipment,butbecauseoftheperiodsofdowntimeincurred.Thereisalsoagreatdealofriskassociatedwithshippingbulkyandheavyitemsoverseas.Icelandisonecountrythathassucceededinlocalizingthemajorityofitsequipmentmaintenance.Theinitialimpetustodosowasnecessity.The2008financialcollapseinIcelandleftgeothermalpowerproducersindirestraits.TheIcelandiccurrencydepreciatedrapidly,makingloanrepaymentextremelychallenging.Thisrequiredanewapproachtobusinessandanextremetighteningoffiscalexpenditures,includingonoperationandmaintenance.Onepowerproducer,OrkaNátturunnar(asubsidiaryofReykjavikEnergy),respondedbyinvestinginthecapacitynecessarytoserviceequipmentlocally.Itestablishedapartnershipwithaforward-thinkinglocalbusinessthatwaspreparedtoprovidethemaintenanceservices,aswellasaUS-basedfirmthatwouldsupportcapacitybuilding.OrkaNátturunnarknewtherewereeducatedpeoplewhocoulddothejobinthecountry—theysimplyneededtobetaughthow.Jointlywithaprivatecompany,calledDeilirTechnicalServices,theproducerinvestedinhumancapacity,andinthenecessarymachineryandtoolstomakerepairsandproducesparepartsinadomesticworkshop.Whilethiswasasubstantialinitialinvestment,itpaidforitselfalmostimmediately.Thefirstrepaircompletedonaturbinerotorcostonlyone-thirdofwhatittypicallywouldtosendthepartabroad.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS17BOX.2.2(CONTINUED)Beyondtheimmensecostsavings,effortstolocalizeequipmentmaintenanceproducedmanyotherunforeseenbenefits:•Withstafftrainedtobetterunderstandtheequipmentandidentifyissuesinatimelymanner,theequipment’slifespanshavebeenextended.•Replacementpartshavebeencustomizedtotheuniquelocationandtypeofsteam,meaningtheycanreducefuturemaintenanceneeds.•Siteshave100percentmaintenancecoverage,andtheoperationaldowntimeofprojectshasbeendrasticallyreduced.Source:WorldBankmarketsounding2022.Photo:GeothermalequipmentmaintenanceworkshopinIceland.Table2.1providesabroadoverviewofexperiencescapturedthroughinterviewsandasurvey(seeannex2foralistofstakeholderssupplyinginformation).However,itshouldbenotedthateachcountrywillhaveauniquelevelofdomesticcapacityinthegeothermalvaluechain,whichstronglydependsontheirmarketmaturity,availabilityofskilledlabor,policiesandregulations,andexperienceinotheradjacentindustries.Eachcountryshouldthereforeconductitsownvaluechainanalysis,whichwillinvolvedocumentingallrawmaterial,equipment,companies,andavailablelaborthatcanbefedintothegeothermalvaluechain.Throughthisanalysis,itmaybecomeapparentthatcomparativeadvantagesexistinspecificsegmentsofthevaluechain.Inotherwords,itmaybeeasierforsomecountriestolocalizegeothermalvaluechainactivitiesinamannerthatisquality-andcost-competitivewiththeglobalmarket.Indonesia,forexample,hasacomparativeadvantageingeothermaldrillingbecauseofitswell-developedoilandgassector.18TWO.ThegeothermalvaluechainTABLE2.1LocalizationpotentialforservicesalongthegeothermalvaluechainVALUECHAINSEGMENTSUBSEGMENTPlanningandlegislationResourcemappingGeothermalplanningStakeholderconsultationPolicyandregulationdevelopmentEnablinginfrastructurePreliminaryEnvironmentalandSocialImpactinvestmentsAssessment(ESIA)forexplorationandpermittingInfrastructuredevelopmentPowercontractingExplorationdrillingFeasibilityandfinancingEnvironmentalandSocialImpactAssessmentfortheprojectCommunityengagementTestdrillingFinancialmodelingandfeasibilityProjectdesignandPlantandsteamfielddesignprocurementWelldrillingProcurementofmaterialandequipmentinputsConstructionandPowerplantconstructioncommissioningSteamfielddevelopmentTransmissionlineinstallationOperationandmaintenanceEquipmentrepair,minorandmajoroverhauls,makeupwellsandtrainingDecommissioningDisassemblyofequipmentandfacilities,reconstructiononlandNote:Localizedpotential:green=high,yellow=medium,andred=low.Routinemaintenanceandmonitoringcanbelocalizedwithease,althoughdrillingofmakeupwellsandmaintenanceofspecializedequipment(e.g.,rotors)isoftenoutsourcedtointernationalcompanies.Opendialogueamonggovernments,developers,andsuppliers,aswellascarefullydesignedincentivizingpolicies,canleadtoopportunitiestolocalizesegmentsofthegeothermalvaluechain.Box2.4(attheendofthischapter)sharessomerelevantexamplesinthiscontext.Awell-designedpolicywillconsiderthesuppliers’anddevelopers’perspectives.Fromthesuppliers’perspective,itisimportanttounderstandtheinterestofcompaniesinsupplyingGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS19goodsandservices,theirabilitytodoso,andanybarriersthattheymayface.Fromthedevelopers’perspective,itisimportanttounderstandthechallengesorimplicationsthatmightbefacedasaresultofprocuringgoodsandservicesdomestically.Figure2.2capturestheexperiencesof15developersworldwideinprocuringgoodsandservicesfromthecountrieswheretheyhavedevelopedandareoperatinggeothermalprojects.Aswithallnewpolicyintroductions,clearcommunicationandtransparencyareessential,asisallowingsufficientleadtimefordevelopersandsupplierstorespondadequately.Forgovernments,thebreakdownofinvestmentingeothermaldevelopmentandthejobcreationpotentialmaybedecidingfactorsinwheretofocussupportfortheindustry’sdevelopment.Figure2.1breaksdownthepercentagesofcapitalexpenditurerequiredtodevelopageothermalproject,forbothelectricalgenerationanddirectuseapplications.Thetotalcostofageothermalprojectincludesexplorationandresourceassessment,drillingworks,fieldfacilities,apowerplant,gatheringsystemsandothersuperficialinstallations,powerlines,anddisposalsystems,amongothers.FIGURE2.2Shareofdevelopersfindingitdifficulttoprocuredomesticgoods/services,byvaluechainsegment60535047474040333020100FeasibilityandProjectConstructionandOperationDecommissioningﬁnancingdesignandcommissioningandprocurementmaintenanceSource:Basedontheresultsofa2022/23WorldBanksurveyof15developersacrosstheworld.Note:Challengesincludeincreasedleadtime,increasedpricecomparedwiththeinternationalmarket,orlowerqualitythanwhatcanbesourcedfromtheinternationalmarket.20TWO.ThegeothermalvaluechainFigure2.1showsthatconstructionandcommissioningconstitutethelargestshareofthetotalcost,followedbyprojectdesign,procurement,andoperationandmaintenance.Theseareasofthevaluechainrepresentasubstantialopportunityfordomesticvaluecreationifsomeactivitiescanbelocalizedinacost-competitivemanner.Thistrendappliestoprojectsmanagedbythepublicandprivatesectors,forbothdirectuseandelectricitygeneration.However,itisimportanttoclarifythatthepotentialforlocalizationcanvarysignificantlyfromoneprojecttoanother,dependingonthegeothermalresource,location,countrypoliciesandregulations,andtheplanneduse.Tomitigateuncertaintiesandrisks,especiallyduringtheinitialstagesofprojectdevelopment,planningandrelevantlegislationrequiresignificantattentionandsupportfromthegovernment.Suchmeasuresarealsopivotalindeterminingthefeasibilityofresourceutilizationoptions,andencouragingprivatesectorinvestment,thusenablingindustriestointegrategeothermalresourcesintotheiroperations.Bydoingso,theseindustriescanreduceCO2emissions,whilealsoreapingeconomicbenefitsfordomesticcompaniesandthelocalcommunitiesincloseproximitytogeothermalprojects.Wherethepublicsectorshoulderstheearlyburdenofriskmitigationbeforeengagingwithprivateentities,itcanalsoexpecttoincurhighcostsduringtheinitialphasesofthedevelopmentprocess.AnEnablingEnvironmentfortheGeothermalValueChainCreatinganenablingenvironmentforthegeothermalvaluechainistheresponsibilityofthegovernmentandwillhelpadvancedomesticparticipationinprovidingservicesandgoods.First,itisnecessarytoidentifythedifferentkindsofservices,skills,equipment,andtechnologiestobefostered,andinwhatgeographiclocations.Thenextstepistohelpensurethatlocalfirmsandlaborhavetheresourcestheyneedtocompete(technology,equipment,andskills).Governmentscanhelpestablishchannelsofcommunicationandtradegroupssoopportunitiesareknown,andbusinessrelationshipscanbebuilt,andsetupfinancialtoolssocompaniescanbecomeoperational.Whiledomesticcompaniesmaybeeagertoengageinthegeothermalvaluechain,barrierstotheirfullparticipationarecommon.Onehurdleisasimplelackofawarenessaboutopportunities.Thismaybeduetotheabsenceofaconveningbodyhighlightingtheopportunitiesforcompaniestoengageinthegeothermalvaluechainorthelackofacentrallocationtoviewrequestsforproposals(RfPs)fromtheindustry.Insomecountries,alackofaccesstotherelevanttechnologiescanbeachallenge,particularlyamongsmallandmediumenterprises(SMEs).InEthiopia,forexample,onedevelopernotedthatsomedomesticcompanieswerenotusingemail—themethodtypicallyGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS21usedbythedevelopertocirculateRfPs(WorldBank2022b).InIndonesia,anotherdeveloperreportedthatsmallenterprisesstruggledtorespondtoRfPspublishedinEnglish(WorldBankmarketsounding2022).Suchchallengescanbeaddressedbyusingalternatemodesofcommunication,forexample,bypublishingopportunitiesinalocallanguageinlocalandregionalnewspapers.Commondemand-andsupply-sidechallengesandbarriersforbothdevelopersandlocalbusinessesaresummarizedasfollows:•Lackofknowledgeabout,andaccessto,thedomesticgeothermalvaluechain•Lackofclarityregarding,orconfidencein,thecountry’sprojectpipeline•Lackofrelationshipbetweendomesticfirmsandgeothermaldevelopers•Gapbetweendomesticfirms’capabilitiesandindustryexpectations•Thespeedwithwhichdevelopersseektosecurenewsuppliers•CulturalandsocialbarriersfacedbybusinessesownedorledbywomenanddisadvantagedindividualsSupportprogramstargetingdomesticindustryplayerscanhelptoaddressthesechallengesandmaximizetheaddedvaluethatgeothermaldevelopmentcanbringtoacountry—particularlyinvaluechainsegmentswithhighlocalizationpotential(e.g.,constructionandO&M).Procuringgoodsandservicesfromdomesticcompanieswhilemaintainingalowcostofelectricitygenerationwillincreasegeothermaldevelopment’scontributiontogrossdomesticproduct.RenewableenergyassociationsandclustersRenewableenergyassociationsandindustryclusterscanplayacrucialroleinthedevelopmentofadomesticgeothermalindustrybybringingtogetherindustryplayers,facilitatingsynergies,andspurringinnovationandknowledgesharing.Eventhoughtheymaycurrentlyfocusonothertypesofrenewableenergy,theycanexpandtoincludegeothermalenergy.Clustersandindustryassociationshelptobuildawarenessaboutthedomesticindustryamongcompaniesseekingopportunities.Theyalsooftenplayaroleinfacilitatingconnectionsbetweendevelopersanddomesticplayersthatcanprovidetherequiredgoodsandservices.Forexample,anindustryassociationorclustermaymaintainanonlinedirectoryofdomesticcompaniesinvolvedinthegeothermalvaluechain.Theyalsoplayanimportantroleinbuildingthecapacityofdomesticcompanies.Theymayoffertrainingprograms,forexample,tohelpimprovecompanies’abilitytorespondtoRfPsandmayfacilitatepeer-to-peerlearningexperiences.Organizationsthatconnectinstitutions,researchers,andenterprisesmaysupportindustrialdevelopmentandhelpcompaniesbecomemorecompetitivebystimulatingtechnology22TWO.Thegeothermalvaluechaintransfer.Forexample,Iceland’sRenewableEnergyCluster(https://energycluster.is/)isanonprofitorganizationthathasbroughttogether34membersfromacrossthecountry,includingeducationalandresearchorganizations,energycompanies,engineeringandconsultancycompanies,andstart-ups,tocreateaplatformsupportingentrepreneurshipandtheexportofgeothermalknowledgeandtechnology.Facilitatingfundingandfinancingtosupportstart-upsandscaleupdomesticcapacityFundingtosupportstart-upsandresearchandinnovationmaybeparticularlyimpactful.Fundingmaybeadministeredthroughgovernmentprogramsormaybedirectedviaindustryassociationsandclusters.Forexample,intheUnitedStates,theAmerican-MadeprogramandtheUSDepartmentofEnergyrunacompetitioncalledtheGeothermalPrize,whichawardsfundingforinnovationinaddressingchallengesfundamentaltooperatinginharshgeothermalenvironments.Theprizehasafour-stageprocess(illustratedinfigure2.3),wherebyinnovatorsandentrepreneursbringaproposedmanufacturingsolutionfromconceptualdesigntoanadvancedprototypeoverthecourseof18months(USDOE2022a).FIGURE2.3StructureofthegeothermalprizeoftheUSDepartmentofEnergySource:USDOE2022a.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS23Financingisalsocriticalforcompanieslookingtoscaletheiroperationsinthegeothermalsector.Companiesneedaccesstofinancingtowincontractsbutalsotodeliverpromisedgoods/services.Forexample,theymayneedtoaccesscapitaltoexpandtheirlaborforce;rampupproduction;orsecurematerial,equipment,andproductstock.Supporttodomesticbanks,eitherfromthegovernmentordevelopmentfinanceinstitutions,canfacilitatethecreationoftailoredfinancingtoolsforcompaniestoparticipateinthegeothermalsector.Box2.3describeshowfinancingschemeshavesupportedgeothermal-heatedgreenhousesandcascadingsocioeconomicbenefits,suchasruraljobcreation,inTürkiye.BOX2.3TÜRKIYE:FINANCINGTHEGROWTHOFGEOTHERMALGREENHOUSESTürkiye’sgeothermalelectricitygenerationranksfourthintheworld,with1.64gigawatts(GW)ofinstalledcapacity.Thecountryhasalsoemergedasagloballeaderinthedirectuseofgeothermalresources.Whenexcludingheatpumps,Türkiyerankssecondgloballyinitsuseofgeothermalheat.Installeddirectuseapplicationshaveathermalcapacityof5.1gigawattsthermal(GWt),equaling8.5percentofthecountry’s60GWttheoreticalgeothermalpotential.Approximately25percentofdirectuseapplicationsareinheatedgreenhouses.Theirgrowthhasbeenremarkableoverthepasttwodecades,withtotalsurfaceareaexpanding400percentsince2002.Therehavebeenmultipledriversofthisgrowth:24TWO.ThegeothermalvaluechainBOX.2.3(CONTINUED)•Thereisastrongcorrelationbetweentemperature-controlledgreenhousesandcropyield.•Greenhouseheatingisasimpleapplicationofgeothermal’sdirectuse,requiringonlyalow-enthalpysource.•Geothermalismoreeconomicalthanothersourcesofheat;thisgreatlyreducestheoperatingexpensesofagreenhouse.•TheTurkishgovernmenthasimplementedprogramstoattractprivateinvestmentingeothermalgreenhousedevelopment.TheTurkishMinistryofAgricultureandForestry’sguidelinesforpotentialinvestorsintheagriculturalindustryrecommend(andincentivize)agreaterfocusongeothermalgreenhouses.Meanwhile,ZiraatBankandtheAgriculturalCreditCooperativeofferlow-interestinvestmentandworkingcapitalloansthatprovidegreaterflexibilitythantraditionalfinancing;suchflexibilityincludes,forinstance,aprincipalgraceperiodofuptotwoyears.InvestorsarealsoeligibletoaccessgrantsfromtheMinistryofAgricultureandForestryandanationalprogramsupportingruraldevelopment.Suchgovernmentsupportisyieldingsignificantsocioeconomicbenefits.Forexample,a71.7-hectareprojectinAydinisproducing20,000tonsoftomatoesannuallyandemploying750people.AnothergreenhouseinKütahyaisproducing35,000tonsoftomatoesandemploying1,100people.Sources:IRENA2022a;WorldBankmarketsounding2022.Photo:GeothermalgreenhousesintheDikiligeothermalfield,Türkiye.EncouragingprocurementfromcompaniesinprojectcountriesSomegovernmentshaveencouragedgeothermaldeveloperstoworkwithdomesticcompaniesbyutilizingtheirprojectprocurementprocess.Inacompetitivebiddingprocess,agovernmentmaycreateincentivesforprivatedevelopers(andtheirsubcontractors)topurchasegoodsandservicesfromdomesticcompanies.Thesewouldtypicallybecommunicatedwithpotentialbiddersearlyon(prebidding)toseektheirfeedbackontheprocurementdesignandallowthecompaniestimetodeveloppartnershipswithdomesticfirms.Theywouldthenbefeaturedintheprocurementdocuments,includingtherequestforGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS25qualificationandtheRfP(illustratedinfigure2.4),possiblyaddingpreferentialpointstothestrengthoftheproposal.Whereacompetitivebiddingprocessisnotpursued,itispossibletodiscussanddecideupontheseelementsinprojectnegotiations.Onceadeveloperisselected,thecommitmentsmadetopurchasegoodsandservicesfromdomesticcompanieswouldthenbecomeelementsofcontractualdocumentsbetweenthegovernmentandthedeveloper,suchasthepowerpurchaseagreement.Table2.2outlinesseveralapproachesthatgovernmentshavetakentoencouragedomesticplayersingeothermaldevelopment.Beforeimplementingrelatedpolicies,governmentsshouldbemindfulofthemarket’sreadinesstoprovidetherequiredgoodsandservices,sinceprematureimplementationmayleadtounwantedmarketdistortions(e.g.,increasedtariffs),orstalledprogressifcertainrequirementscannotbemet.Box2.4sharestheexperiencesofTürkiyeandIndonesiainleveraginggeothermalprocurementtobolstertheirdomesticindustry.FIGURE2.4CompetitivebiddingprocessandkeydocumentsPRE-BIDDINGPREQUALIFICATIONBIDDINGANDPROJECTWINNERSELECTIONIMPLEMENTATIONRequestforRequestforExpressionofQualiﬁcationRequestforPowerPurchaseInterest(REoI)(RfQ)Proposals(RfP)Agreement(PPA)Source:AdaptedfromWorldBank(2022).TABLE2.2WaystoencouragedomesticparticipationinthegeothermalvaluechainGOVERNMENTDESCRIPTIONSTRATEGYRequestingsuchaplancanensurethatdevelopershaveinvestigatedareasalongRequestdevelopersthegeothermalvaluechainwheredomesticcompaniescanparticipate.Itwilltoproduceaplanforincreasethelikelihoodthatadeveloperhasidentifiedpotentialfirmsthatcanhowtheywillworkwithprovidetherequiredgoodsandservicesandissettoengagethesecompanies.domesticcompaniesRequiringinternationaldevelopersand/orengineering,procurement,andRequirethatoneconstructioncompaniestopartnerwithdomesticdeveloperscanhelptobuildupprojectpartnermustbedomesticknowledgeinprojectdevelopment.Itcanalsohelpdomesticdevelopersadomesticcompanyandcontractorsestablishatrackrecord.Thedomesticpartnercanbeasleepingpartner,orafinancialortechnicalpartner.IncentivizedeveloperstodirectapercentageGovernmentsmaysetincentivesfordevelopersthatcancommittoprocuringaoftotalprocurementcertainpercentageofgoodsandservicesfromaprojectcountry(seebox2.4).spendingtodomesticThesetargetsmaythenbecomecontractualobligations,forexample,inthepowercompaniespurchaseagreement.Suchincentivesmaybesettoencourageprocurementfromcompaniesowned/ledbywomenandsociallydisadvantagedgroups.Source:BasedonWorldBank(2022).26TWO.ThegeothermalvaluechainBOX2.4TÜRKIYEANDINDONESIA:ENCOURAGINGDOMESTICPROCUREMENTRenewableelectricitygenerationinTürkiyeissupportedthroughafeed-intariffprogram.TheTurkishRenewableEnergyLawsetsthetarifftobepaidouttogenerators,whichvariesbytechnology.Thelawalsostipulatesthatpowerproducerscanbenefitfromasupportscheme,calledtheRenewableEnergyResourcesSupportMechanism,ifdomesticmechanicaland/orelectromechanicalcomponentsareusedforgeneration.Thesupportschemeactsasatop-uptotheestablishedtariff,providingpowerproducerswithanincentivetoprocuredomesticcomponentswherepossible.Indonesiahasalsoseensuccessinincubatinglocalmanufacturingcapacity,butthroughalessflexibleapproach.Geothermaldevelopersarerequiredtoprocureasetpercentageofcomponentsandservicesdomestically,asdetailedintableB2.4.1.Thispercentagedependsonthesizeoftheproject.Whilethismeasurehasbeensuccessful,developershavenotedthatitlimitsflexibilityandmotivationtogoaboveandbeyondtheestablishedrequirement.TABLEB2.4.1LocalcontentrequirementsforgeothermalprojectsinIndonesiaGEOTHERMALPROJECTLOCALCONTENTREQUIREMENTCAPACITYUpto5megawatts(MW)3percentforgoods,89percentforservices,42percentforgoodsandservicescombined>5MW–10MW2percentforgoods,82percentforservices,40percentforgoodsand>10MW–60MWservicescombined>60MW–110MW16percentforgoods,74percentforservices,33percentforgoodsandservicescombinedAbove110MW16percentforgoods,60percentforservices,29percentforgoodsandservicescombined15percentforgoods,58percentforservices,29percentforgoodsandservicescombinedSource:IRENA2022c;WorldBankmarketsounding2022.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS27Somegovernmentshavetailoredsuchrequirementstofavorwomenanddisadvantagedgroups.TheGovernmentofKenyaprovidesanexcellentexample.In2005,thegovernmentimplementedanewregulationrequiringallgovernmententitiestoprocureatleast25percentofgoodsandservicesfromSMEs,seenasacriticalsteptowardaddressingunemploymentinthecountry.However,theysoonrealizedthatsomegroupsofpeoplewerebeingleftbehind.In2013,thegovernmentintroducednewlegislationrequiringallgovernmentandpubliclyownedentitiestoprocure30percentofallgoodsandservicesfromSMEsownedbyyouth,women,anddisabledindividuals(Mohammed2019).ThisregulationappliestothegeothermalentitiesownedbytheGovernmentofKenya,includingtheGeothermalDevelopmentCompany,aswellasthemajoritystate-ownedpowerutilityKenGen.Suchpoliciesarenotwithoutchallengesandmustbecarefullydesignedandimplemented.InKenya,procuringfrommanysmallSMEs,ratherthanevaluatingjustafewbidsfromlarge,formalcompanies,meansadditionalexpensesareincurred.Ontheotherhand,SMEshavereportedchallengesrelatedtotheup-frontcostsrequiredtoprovidegoodsandservicesandslowpaymentsdisruptingcashflowneeds(Omariba2020).Suchchallengescanbeaddressedwithforethoughtandtheimplementationofclearanduser-friendlysystems.SimplifyingtheprocessbycompilingadirectoryofqualifiedSMEsavailabletoprovideneededgoodsandservicesmayalsohelp.28TWO.ThegeothermalvaluechainTHREE.GEOTHERMALJOBSANDSKILLSGeothermalenergybringsamultitudeofsocioeconomicbenefits—andfarmorethanconventionalenergytechnologies.Inparticular,itcreatesmorejobsthannaturalgasandotherutility-scaleelectricitygenerationtechnologiesonapermegawattbasisatacomparablecostofelectricity.Notonlyaregeothermaljobsmorenumerousbuttheyarealsoofbetterqualityandlongerduration(USDOE2019;IRENAandILO2022).TheInternationalRenewableEnergyAgency’sAnnualJobsReview(IRENAANDILO2022)reported196,000jobsinthegeothermalsectorworldwidein2021.Thisisanincreaseofover100percentfrom2020(IRENAandILO2021).Chinarepresentsthelargestshare,with78,000jobs.TheEuropeanUnionrankssecond,with60,000geothermaljobs,followedbytheUnitedStateswithanestimated8,000directjobs(IRENAandILO2022).Intermsofgenderequality,thereisprogresstobemade.Whilewomen’sparticipationintherenewableenergysectorishigherthanintheminingandfossilfuelsectors(at32percentversus25percent,onaverage,respectively),womenremainunderrepresented(ESMAP2019).Menstillcomposealargemajorityofthegeothermalworkforce;womenheldonly22percentofgeothermaljobsin2020.Evengreaterdiscrepanciesexistinthetypesofrolesheldbymenandwomeninthesector.AstudyongenderequalityinthegeothermalindustryinNewZealandandIcelandshowedthatalthoughwomenheld14percentand23percentofjobsoverall,respectively,theseshareddroppedprecipitously—to8and10percent—whenlookingatonlyjobsinoperations.Meanwhile,womenfilled28percentand62percentofsupportroles(Calibuganetal.2021).Overthepastfourdecades,thepercentageofwomeninthegeothermalworkforcehasindeedrisen.In1980,itwasonly10percent.However,thisfigurealsosuggeststhatwithoutintervention,thegeothermalsectorwillnotachievegenderequalityuntil2100.OrganizationssuchasWomeninGeothermal(WING)andforward-thinkinggovernmentsandcompaniesaretryingtochangethesetrends.ProactiveprogramsandpoliciestobringmorewomenintoSTEM(science,technology,engineering,andmathematics)education,recruitandretainfemaletalent,narrowthegenderpaygap,andshowcasefemaleleadersaremakingconcretedifferences.Box3.1introducesaWING-initiatedprogramtogivementheknowledgeandtoolstobettersupportandempowertheirfemalecolleagues.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS31BOX3.1TÜRKIYE:GETTINGMENONBOARDTOADVOCATEFORGENDEREQUALITYWomeninGeothermal(WING)isaglobalnetworkempowering,connecting,andliftingupwomeninthefieldofgeothermalenergy.Thenetworkaimstoleverageprofessionaldevelopmentandeducationtobreakdowngenderbarriersandadvancegenderequalityinallroleswithintheindustry.WhileWINGprogrammingfocusesprimarilyonwomen,theorganizationacknowledgesthatgenderinequalityisnota“women’sproblem”butasocietalproblemthateveryoneneedstoworktowardresolving.WINGrecognizestheneedtoeducateandprovidetherequiredtoolsformentoadvocateforgenderequality.Menhold78percentofjobsandthevastmajorityofleadershiprolesinthegeothermalindustry.Formeaningfulchangetooccur,menneedtobeengagedintheconversationondiversityandinclusion.Over30percentofWINGmembersaremen.TheWINGmanSpecialTaskforce,aplatformcreatedforWINGbytheNewZealandfirmUpflow(www.upflow.nz),endeavorstoeliminategenderstereotypesandencouragementoberolemodels,champions,andadvocatesofgenderequality.Thisplatformengagesmenintheconversationongenderequalityandgivesthemthetoolstoacttomakemeaningfulchange.Offeringsincludeinformationontheeffectsofunconsciousbias,insightsintocurrentthinkingarounddiversity,andtoolsandadviceonhowtobettersupportfemalecolleagues.Theultimateaimistoachieveanindustrywidecultureandenvironmentoffairnesswherewomencanrealizetheirfullpotential.Afterseveralsuccessfulpilotsbetween2017and2019,theprogramwaslaunchedforthebroadergeothermalcommunity.Afour-dayintensive“TraintheTrainers”programnowprovidesamaleandfemalerepresentativefromanorganizationwiththematerial,support,32THREE.GeothermaljobsandskillsBOX.3.1(CONTINUED)andguidancetodeliverWINGmenSpecialTaskforcetrainingtomenwithintheirhomeorganizations.Thetrainerscommittodeliveringa1.5-hourworkshopeverymonthfor8–10monthsstartingwithin3monthsofthe“TraintheTrainers”program.Thismodelhashadwidespreadimpact;realculturalchangehasbeendemonstratedpost-training.Witheachorganizationhavingdedicatedstaffchampioninggenderempowerment,andprovidingtherequirededucationandguidancetogainsupportforgenderequality,meaningfulchangeishappeningwithinthegeothermalindustry.Source:Blairetal.2021;Blair2021;WINGn.d.Photo:GeothermalfacilitytourconvenedbyTurkishchapterofWING.IRENA’sWorldEnergyTransitionsOutlookprovidesaroadmaptolimitglobaltemperatureincreaseto1.5°Celsius.Thereportsuggeststhattoachievethispathway,theshareofgeothermalcapacitywillincreaseto8percentin2030,pushingthenumberofglobalgeothermaljobsupto296,000thesameyear(IRENA2021).Thesejobswillbespreadacrossthegeothermalvaluechainandwillrequirevaryinglevelsofexpertise,fromhigh-skilledrolestounskilledlabor.Figure3.1highlightsimportantgeothermalprofessionsbyskilllevel.Ahigh-skilledrolecanbedefinedasonethatwouldrequireahighereducationdegree(bachelor’sorabove).Amedium-skilledrolewouldrequireavocationaldegree,apprenticeship,orsignificanton-the-jobtrainingandexperience.Alow-skilledrolewouldrequireonlybasiceducation,andattimesnoformalschooling.Figure3.2illustratestheshareofemploymentopportunitiesacrossthegeothermalvaluechain.ConstructionandO&Mrepresentthegreatestopportunitiesforjobcreation.A50MWgeothermalprojectwouldcreateanestimated155person-years2ofjobsduringtheconstructionphase(ESMAP2019).AlthoughconstructioncreatesmorejobsthanO&M,thesejobswilllastonlyduringtheconstructionphase,whichtypicallyspansthreeyears(WorldBank2022b).Inawell-developedmarketwithastrongpipelineofprojectsandamobileworkforce,thelaborinvolvedmaytransitiontofuturegeothermaldevelopments,ormayreturntoconstructionworkinother,adjacentindustries.2Theexactdefinitionofaperson-yearmayvarydependingoncircumstances.Person-yearsarecomputedbydividingthesumofthehoursallemployeesworkonaprojectbythenumberofhourstypicallyworkedinayear.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS33FIGURE3.1GeothermaljobsalongthevaluechainbyskilllevelSkillLevelHIGHMEDIUMLOWLegislationand•Policymakersplanning•Energysectorplanners•Energymodelers•Energyregulationexperts•Environment,social,andgenderexperts•LegalexpertsEnabling•Environmentalscientists•Derrikoperators•Driversinfrastructure•Reservoirmodelers,andreservoiranddrillingengineers•Rotarydrillinvestments•Geologists,geophysicists,andgeochemists•Hydrologistsoperators•Wildlifebiologists•Roustabouts•Environmentalengineers•Communityengagementspecialists•GenderandsocialspecialistsFeasibility,•Environmentalscientists•Derrikoperators•Driversﬁnancing,and•Reservoirmodelers,andreservoiranddrillingengineers•Rotarydrilloperatorsproject•Geologists,geophysicistsandgeochemists•Roustabouts•Constructiontendering•Hydrologists•Constructionlaborers•Wildlifebiologists•Civil,mechanicalandenvironmentalengineersequipmentoperators•Communityengagementspecialists•Construction•GenderandsocialspecialistsmanagersProject•Reservoirmodelers,andreservoiranddrillingengineers•Derrikoperators•Driversdesignand•Geologists,geophysicistsandgeochemists•Rotarydrilloperatorsprocurement•Hydrologists•Roustaboutsofinputs•Wildlifebiologists•Drillingmanagers•Civil,mechanical,electricalandenvironmentalengineersConstruction,•Financialadvisorstransport,and•Transactionadvisorscommissioning•Logisticsexperts•Communityengagementspecialists•Genderandsocialspecialists•Civil,mechanical,electricalandenvironmentalengineers•Carpenters•Drivers•Communityengagementspecialists•Construction•Constructionlaborers•Genderandsocialspecialists•Securityguards•Reservoirmodelers,andreservoiranddrillingengineersequipmentoperators•Geologists,geophysicistsandgeochemists•Constructionmanagers•Electricians•Plumbers•Pipeﬁtters•Steamﬁtters•HealthandsafetyexpertsOperationand•Electronics,electrical,andenvironmentalengineers•Electricians•Securityguardsmaintenance•Reservoirmodelers,andreservoiranddrillingengineers•Plumbers•Cleaners•Geologists,geophysicistsandgeochemists•PipeﬁttersDecommissioning•Communityengagementspecialists•Steamﬁttersandrecycling•Genderandsocialspecialists•Plantoperators•Steamﬁeldandplantmanagers•Environmental,civil,mechanical,andelectrical•Construction•Driversengineersequipmentoperators•Constructionlaborers•Securityguards•Communityengagementspecialists•Construction•GenderandsocialspecialistsmanagersSource:Originalcompilation.34THREE.GeothermaljobsandskillsFIGURE3.2Shareofjobscreatedalongthegeothermalvaluechain,bysegment(%)LegislationandEnablingFeasibility,ProjectdesignConstruction,OperationandDecommissioningplanninginfrastructureﬁnancing,andandprocure-transport,andmaintenanceandrecyclinginvestmentsprojecttenderingmentofinputscommissioning0–1%0–1%0–1%0–5%50–60%20–30%10–20%PercentageofjobscreatedSource:Basedona2022/23WorldBanksurveyofgeothermaldevelopers.Incontrast,O&Mcreateslong-termjobopportunities,whichwillcontinueforaplant’slife.Duringoperation,a50MWgeothermalprojectwouldsupportabout35–60permanentjobsoveraperiodof30–50years,theequivalentofupto3,000person-years(ESMAP2019).Inadditiontothedirectjobsoutlinedabove(thosecreatedinprojectdesign,construction,andO&M),geothermalprojectswillalsocreateindirectandinducedjobs.Table3.1detailsjobcategoriesandexamplesforbothelectricitygenerationprojectsanddirectuse.Fordirectuse,directjobsareonlythoserelatedtoaproject’sgeothermal-specificequipment,suchastheheatexchangerandthepipingnetwork.Forexample,inageothermalgreenhouseproject,amaintenancetechnicianfortheheatingsystemwouldbeinadirectjob,butatomatoharvesterworkingwithinthegreenhousewouldbeinaninduced(productiveuse)job.TABLE3.1JobcategoriescreatedthroughgeothermalprojectdevelopmentandoperationJOBDESCRIPTIONEXAMPLESCATEGORYJobscreatedasaresultofthedesign,development,Electricitygeneration:ADirectjobsmanagement,construction,andoperationandreservoirengineerrequiredformaintenanceofageothermalproject.Fordirectuseprojectdesign,construction,projects,directjobsareonlythoserelatedtothedesign,andoperationisadirectjob.construction,andoperationandmaintenanceofthegeothermalheatdeliveryofaproject.Directuse:AmaintenancetechnicianforadistrictheatingIndirectjobsJobscreatedasaresultofthedemandformaterialinputssystemisadirectjob.Inducedjobsinprojectdevelopment,includingbuildingmaterialandequipment.AfactoryworkerinaplantproducingsteamturbinesisanJobsthatresultfromthespendingofthosedirectlyandindirectjob.indirectlyemployedingeothermalprojects.Arestaurantserverinaproject“Productiveuse”jobsareconsideredatypeofinducedcommunityoralifeguardatajobandresultfromtheincreaseduseofenergyamidgeothermalspafacilityisanimprovedqualityandquantityofsupply.inducedjob.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS35LaborrequirementsalongthegeothermalvaluechainThesectionsbelowoutlinethetypesofrolesthatwillberequiredwithineachsegmentofthegeothermalvaluechain.LegislationandplanningTheplanningandlegislationphaseisprimarilyledbygovernments,anditrequirespredominantlyhigh-skilledindividualswithahighereducationdegree.Thesejobsarenotprojectspecificandarethereforetypicallylongterminnature.Someindividualsmayhavebroaderrolesextendingbeyondthegeothermalindustry,forexample,coveringseveralrenewableenergytechnologies.Geoscientists,engineers,andmathematicianswillplayanimportantroleinassessingacountry’sgeothermalresourcesandestimatingtheviabilityofdevelopingsuchresources.Energysectorplannerswillassessthecapacityofgridinfrastructuretosupportnewgeothermaldevelopments.Theywillalsomodelandassessthedemandforenergy.Thisworkwillinformtargetsforgeothermalcapacity.Expertswillberequiredtodesignsupportivepoliciesthatbolsterthegeothermalsectoranddomesticindustrytoachievesuchtargets,andintegratethemintheregulatoryandlegislativeframework.Procurementspecialists,alongwithlawyers,willsupporttheprojectprocurementprocessanddeviseanyrequirementstobesetfordeveloperswithincontractualagreements.Communicationspersonnelwillhelptoraiseawarenessaboutprojecttenderopportunitiesandgovernmentprogramsthataresupportingthegrowthofthegeothermalindustry.Socialandgenderexpertswillplayacriticalroleinengagingstakeholdersfromanearlystage,ensuringthereissupportforgeothermaldevelopmentandthatprojectswillhavepositiveimpactsonthecommunitieswheretheyarelocated.Theymayalsoadviseonthedevelopmentofpoliciesthatcontributetoequalityandeconomicdevelopmentinproject-affectedcommunities,andprovideinsightsintohowtheprocurementprocessmightachievethedesiredoutcomesofthegovernmentandcommunitystakeholders.EnablinginfrastructureinvestmentsThepermittingprocessforgeothermaldevelopmentwillrequireprofessionalsfromboththegovernmentanddevelopersides.Wildlifebiologists,socioeconomicspecialists,hydrologists,andarcheologistsareneededtosupporttheenvironmentalandsocialimpactassessmentandhelpobtaintherequiredpermits.Oncepermitsareobtained,constructionworkersandmanagersneedtobuildthenecessaryinfrastructuretoaccessandutilizesitesduringprojectdevelopment,includingroadsandwatersupplynetworks.36THREE.GeothermaljobsandskillsPowermarketersandlawyerswillplayacentralroleinnegotiatingandfinalizingpowerpurchaseagreements—animportantprecursortofeasibilityandfinancing.Explorationdrillingwillalsobeginatthisstage,requiringavarietyofskilledprofessionals,includingengineers,geologists,welders,toolpushers,cementingpersonnel,drillingfluidspersonnel,safetymanagers,andsitemanagers.Someroleswillbeperformedbythein-houseteamofthedrillingcompany,whileotherswillbesubcontractedout.Feasibility,financing,andprojecttenderingTheprofessionalsrequiredfortheproject-specificenvironmentalandsocialimpactassessmentwillbesimilartothoserequiredforthepreparationofsuchanassessmentforexplorationandforsupportinginfrastructure.Morein-depthcommunityengagementwillbeginatthisstage.Thiswillrequireindividualswithexpertiseincommunityconsultation,aswellasknowledgeofthelocalcultureandcustoms.Likewise,testdrillingmayberequired,demandingsimilarskillsonsitetothoseneededforexplorationdrilling.Financialexpertswillbeneededtomodelprojectsanddeterminewhethertheyarebankablegiventheexpectedexpendituresandrevenueforecasts.ProjectdesignandprocurementofinputsOnceadeveloperhasconfirmedthatasiteisfeasibleforgeothermaldevelopment,itwilltypicallyenteranengineering,procurement,andconstructioncontract.Thecontractorwillutilizeitsownteamofworkersbutwillalsosubcontractoutelementsofwork.Duringthedesignphaseofa50MWpowerplant,40–50peopleareusuallyemployed(GEA2010).Engineersfromdifferentdisciplinesandwithdifferentskillsandexpertisewillberequired(civil,mechanical,electrical,electronic,environmental,reservoir,etc.)tomodelandmonitorthereservoir,designtheplantfacility,mitigateriskstothenaturalenvironment,specifyplants’electricalcomponents,developelectronicsystemstooperatetheplants,anddesignmechanicalsystemsandfoundations,amongotherimportanttasks.Procurementspecialistswillbeneededtoprocureallrequiredbuildingmaterialsandequipment,andlogisticsexpertsanddriverswillbeneededtoarrangedeliverytosites.Drillingpersonnel,suchasdrilloperators,derrickoperators,androustabouts,areneededtodrillproductionwells.Geologicalexpertswillalsoberequiredtostudythetopographyandgeologicalmakeupofageothermalsiteandusetheirknowledgeofrocktypestomakerecommendationsonthemostcost-effectiveareastodrill.Construction,transport,andcommissioningThenumberofjobsincreasesduringtheconstructionphase.Plantconstructionwilltypicallylastfortwotothreeyears,andthenumberofemployeesrequiredoverthisperiodwillvary.Fora50MWpowerplant,theremaybeupto40projectoverheadstaff,aswellasupto400subcontractorsandcraftspeopleattheprojectpeak(GEA2010).ThenumberofpeoplerequireddecreasesinthecaseofconstructingasmallergeothermalplantordirectuseGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS37geothermalfacility,althoughnotproportionally.Forexample,thenumberofpeoplerequiredfora25MWplantdecreasesonly25percentwhencomparedwiththatfora50MWplant(GEA2010).Again,avarietyofskilledengineerswillberequiredduringthisphase,includingcivil,electrical,electronic,andmechanicalengineers.Theywillsuperviseandensurethatconstructionadherestodesignplans,overseetheinstallationofcriticalcomponents,andconducttestsandinspectionstocommissionplants.Constructionlaborers,equipmentoperators,andconstructionmanagerswillcarryouttheconstructionoftheplantfacility.Specializedtradespeople,suchaselectricians,plumbers,andcarpenters,willinstallcomponents,pipesystems,andbuildfixturesaccordingtoplantdesignplans.OperationandmaintenanceOnceageothermalpowerplantisoperationalandproducingpower,theownerandoperatorwillemployarangeofprofessionalsforthefacility’sO&M.Typically,10–25O&Mpersonnel,includingplantmanagers,engineers,maintenancetechnicians,andsiteoperators,wouldberequiredfora50MWplant(GEA2010).InadditiontoO&Mpersonnel,supportandrepairserviceswillalsoberequiredtoensureaplantoperatesefficiently.Thesupplieroftheturbineusedinaplant,forexample,mayneedtoproviderepairservices.Photo:WeldersworkingonageothermalprojectinKenya38THREE.GeothermaljobsandskillsThesteamgatheringsystemandgeothermalreservoirswillalsorequiremaintenance.Wellsmayneedtobereworkedovertimetoensureadequatefluidandsteamflowandinjection.Thepipingofthesteamgatheringsystemmustbemaintained,andpartswillneedtobereplacedperiodicallyduetonormalwearandtear.LocalemploymentcreatedbygeothermaldirectuseprojectsDirectuseofgeothermalheatholdsimmensepotentialforlocaljobcreation(WorldBank2022a).Directuseprojectsmaybedevelopedasstand-aloneprojects,ortoaccompanypowergenerationprojects,utilizingtheexcessheatinthegeothermaleffluent.Thetypesofjobscreatedwilldependontheenduseofthegeothermalheat,andmayincludedirect,indirect,andinducedjobsinagriculture,services,tourism,andindustry.InPoland,astudydocumentedtheimpactsofgeothermalexploitationonemploymentstructuresacross10municipalitiesbetween2005and2018(Kureketal.2021).Theresultsfromacomparisonofthestudy’sfindingswithacontrolgroupofmunicipalitiesillustrateastrongshifttothetradeandservicesectors,withoverallemploymentinmunicipalitieswithgeothermalprojectsoutperformingthereferencegroup.Theresultsshowastrongcorrelationbetweenemploymentcreationandthedevelopmentofgeothermalspasandrecreationalcentersinthestudiedmunicipalities.Theindustrialuseofgeothermalresources,forexample,fordistrictheating,resultedinonlyminorchangestothemunicipalities’economicandemploymentstructure;however,suchprojectsmaysignificantlyimproveresidents’qualityofliferesidentsandreduceenergyexpenses.Inthisstudy,particularlystrongimpactswereobservedinsmallermunicipalitiesversuslargermunicipalities,illustratingthepotentialforgeothermalspastoserveasacatalystforruraltourismandfuelruraleconomicgrowth.Inanotherexample(capturedinbox1.3,chapter1),Kenya’sOseriangeothermalparkischangingtheeconomicandemploymentstructureinNakuruCounty.Enormouspotentialexistsforgeothermalapplicationsinagriculture(e.g.,ingeothermal-heatedgreenhousesandforfooddrying),althoughsuchapplicationshavethusfarbeenunderexploited.Theagriculturalsectoristhelargestemployerindevelopingcountriesandsupportsthelargestportionofrurallivelihoodsintheworldtoday(IRENA2022a).Notonlycangeothermalapplicationsinagriculturehelptoboostproductionandreducefoodwastage,butcanalsocreateavarietyofnewskilledandunskilledjobs.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS39Photo:DriedfruitprocessingcenterinMexico.Especiallyindevelopingcountries,geothermaldirectuseprojectsinagriculturehaveanopportunitytocontributetoequityandequalityforwomen,youth,anddisadvantagedgroups.Womenplayacentralroleinthefoodsystemsofdevelopingcountries—producinganestimatedthree-quartersofthetotalproduction(IRENA2022a).Improvingproductionthroughgeothermaldirectuseapplicationswillthereforeimpactwomenpositively.Overall,opportunitiesforwomeningeothermaldirectuseprojectsareconsideredtobegreaterthanthoseinpowerproductionduetothevastvarietyofjobsthatcanbecreated(WorldBank2022a).Table3.2considerswomen’semploymentinthreedirectuseprojects.TABLE3.2Women’sshareofworkforceinselectdirectuseprojectsDIRECTUSEEXAMPLEDIRECTJOBSPERCENTAGEOFJOBSAPPLICATIONBlueLagoon,IcelandCREATED—FTEHELDBYWOMEN(%)Spa/tourism/beautyproductsDeshidratadorGeotermicode80958FooddryingAlimentosdeNayarit,MexicoCaldiranGeothermal,Türkiye6080Greenhouse4075Source:IRENA2022a;WorldBank2022a.Note:FTE=full-timeequivalent.40THREE.GeothermaljobsandskillsSkillgapsinthegeothermalsectorAlthoughgeothermalresourceshavebeenusedforelectricityproductionformorethanacentury,manycountriesstilllackthenecessaryhumanresourcecapacitytosupporttheindustry’sgrowth.Thisisespeciallytrueincountriesthatdonotyethaveanestablishedgeothermalindustry,ordonothaveanoilandgasindustryfromwhichtodrawtalent(WorldBankmarketsounding2022).Box3.2shedslightonthecurrentsituationinEastAfrica.BOX3.2EASTAFRICA:SKILLSHORTAGESFORGEOTHERMALDEVELOPMENTAccordingtoa2015analysisundertakenbytheUnitedNationsEnvironmentProgramme,EastAfricancountrieswouldneedtotrainandrecruitanadditional12,000skilledpeopleinthescientificandengineeringdisciplinesby2030tofulfilltheirgeothermalenergyambitions.Thestudy,whichfocusedonthe13countriesoftheEastAfricanRiftSystem(Burundi,Comoros,theDemocraticRepublicofCongo,Djibouti,Eritrea,Ethiopia,Kenya,Malawi,Mozambique,Rwanda,Tanzania,Uganda,andZambia),highlightedatroublingshortageofskilledpersonneltofillrolesacrosstheentirevaluechain.Inparticular,thereisadireshortageofgeoscientists,reservoirengineers,drillingengineers,andplantengineers,withonly41percent,3percent,3percent,and6percent,respectively,oftherequiredmanpowercurrentlyavailableforplanneddevelopmentto2030(UNEP2015).AnotherstudyongeothermalenergyinEastAfrica,conductedbytheInternationalRenewableEnergyAgency,documentedthatallcountriesinthisregion,exceptKenya,faceashortageoftrainedandqualifiedlabor.Thisnotonlyimpactsdomestichiringbythecompaniesengagedinthegeothermalvaluechain,butalsohasgovernment-levelimpactsinthedesignandimplementationofasustainablegeothermalprogram.Withoutadequatecapacityinthepublicdomain,alackofsupportivepoliciesandinstitutionswilleventuallylimitexplorationactivity.Thestudydocumentedashortageoftechnicalexpertisetocompletegeoscientificstudies;executenegotiationsregardingpowerpurchaseagreementswithprivatedevelopers;developadedicatedregulatoryframework;supervisedrilling,prevention,andcontrolofwellscaling;andmanageandimplementprojects(IRENA2020).Source:UNEP2015;IRENA2020.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS41Forthisreport,15developersoperatinginNicaragua,Panama,Peru,theDominicanRepublic,Canada,Sweden,Israel,Pakistan,Kenya,Mexico,thePhilippines,Türkiye,ElSalvador,Switzerland,CostaRica,andIndonesiaweresurveyed.Thedeveloperswereaskedtoprovidetheirinputonthechallengestorecruitingdomestictalentforhigh-,medium-,andlow-skilledroles.Thesurveyfindingssuggestthatthegreatestchallengesarefacedinrecruitinghighlyskilledindividuals.Seventy-twopercentofthedevelopersreportedchallengestorecruitinghigh-skilledlabordomestically(29percentreportthischallengeoftenand43percentreportthischallengeoccasionally,asshowninfigure3.3).Thechallengesincludedlongerleadtimestofillroles,reducedtalentpoolfromwhichtoselectindividuals,orresortingtohiringfromtheinternationalmarket.Therolesthatwerecontinuouslyhighlightedasthemostchallengingtofillincludegeoscientists(suchasgeologists,geophysicists,andgeochemists),geothermalmodelers,productionandreservoirengineers,drillingspecialists,andplantengineers.Whenhigh-skilledrolescanbefilledbyhiringfromwithinthedomesticmarket,theseindividualstendtocomefromlargerurbancentersratherthanfromprojectcommunities.Medium-skilledrolesappeartoposelessofachallenge,with43percentofthedevelopersfacingonlyoccasionalchallengestosourcingskillsdomestically.Low-skilledrolesaretheeasiesttofill,with93percentofrespondentsfindingnodifficultyhiringmembersofneighboringcommunitieswhocouldbeupskilledonthejob.Forexample,Indonesia-basedSupremeEnergyoffersageothermaldevelopmentprogramforcommunitymemberstotrainandbecomeplantoperators,mechanicalandelectricaltechnicians,fieldchemists,andwelltestingofficers(box3.3).FIGURE3.3Shareofsurveyeddevelopersthathavefounditdifficulttorecruithighlyskilledtalentinprojectcountries(%)28.6%No42.9%Ocassionally28.6%YesSource:Originalcompilationfromsurveyresults.42THREE.GeothermaljobsandskillsBOX3.3INDONESIA:INVESTINGINHUMANRESOURCEDEVELOPMENTSupremeEnergy,foundedin2007,isanIndonesia-basedindependentpowerproducer.Thecompanyhastwooperationalplants,withatotalof170megawattsofinstalledcapacity,andanothersiteindevelopment.Itemploys187staff;ofthese,117workatthetwooperationalgeothermalplants.TheteamatSupremeEnergyhashadastrongfocusonacquiringandretainingqualitytalent,andthecompanyhasgrownquicklyoverthepast15years.AlthoughIndonesia’sgeothermalindustrybenefitsgreatlyfromthewealthofexpertiseinthecountry’swell-developeddomesticoilandgasindustry,therearestillskillsuniquetothegeothermalindustrythatrequiretimeandefforttodevelop.Earlyintheiroperations,companiesworkingingeothermalenergystruggledtoretainexpertsinthegeosciencesfield,suchasgeologists,geoscientists,andgeophysicists.Giventhelimitednumberofqualifiedsubsurfacespecialists,andthehighdemandfortheirskills,employeeswereoftenrecruitedbyothercompanies.Highturnoverratespresentedabusinesschallenge.Ratherthanrecruittalentfromabroad,asmanycompaniesdowhentalentisnoteasilyavailabledomestically,SupremeEnergy’shumanresourcesteamdevisedastrategytogrowtalentinhouse.Theydecidedtohireacohortof10newgraduateswithgeosciencebackgroundsandputintoactionaplantoprovideon-the-joblearningandanarrayofprofessionaldevelopmentopportunities.Mostofthenewrecruitsweregiventheopportunitytostudyabroad,eitherinNewZealandorIceland,tofurtherdeveloptheirspecializedknowledge.Thestrategyprovedsuccessful,andthecompanynowhasacompetentgeoscienceteam.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS43BOX.3.3(CONTINUED)Thecompanyhasalsorecognizedtheopportunitytorecruitexperiencedstafffromtheoilandgassector—includingelectricalandmechanicalengineers,environmentalengineers,biodiversityspecialists,healthandsafetyexperts—whocanthenreceivespecializedgeothermalknowledgeoncetheystepintotheirnewroles.Thecompany’sinductiontrainingprogramcomplementsclassroomlearningandon-the-jobtrainingwithjobshadowing,wherebyanewhireconductsday-to-dayworkwithanexperiencedpeerinasimilarrole.Atthepowerplantlevel,ithasalsobeenatoppriorityforSupremeEnergytohiremembersofthelocalcommunity.Sincethespecificskillsrequiredarenotalwayseasilyavailablewithinthecommunitiessurroundingprojectsites,thecompanylaunchedageothermaldevelopmentprogramforoutstandingassociate’sandbachelor’sdegreeholdersfromsurroundingcommunities.Thoseselectedenterayearlongprogram,whichincludesfourmonthsofin-classlearning,conductedincooperationwithalocaluniversity.Theythentransitiontoeightmonthsofon-the-jobtraining,afterwhichthetraineesareassignedtovariousroles,includingpowerplantoperator,mechanicalandelectricaltechnician,fieldchemist,andwelltestingofficer.Source:WorldBankmarketsounding2022.Photo:NewpersonneltrainingatSupremeEnergyfacilityinCepu,IndonesiaSimilarly,PTGeoDipaEnergyinIndonesiahasdeliveredwelding-relatedtraining,inresponsetoarequestfromtheheadsofsurroundingvillages.Fortytraineesfromfourdifferentvillagesreceivedtheoryandworksafetyclasses,followedbyweldingpracticeoverafive-daytrainingperiod.Certificationforweldingcompetencywasalsoprovidedtotheparticipants.Thesupplyofskilledlaborcanhindergeothermalprojectdevelopment—anditsassociatedsocioeconomicbenefits—ifnotaddressedinatimelymanner.Growingasustainablegeothermalindustrywillincreasethedemandforsector-specificskills,anditwillbeuptobothgovernmentsandprivatesectorplayerstorespondthrougheducationprogramstofillgapsthatmayexistingeothermalskillsandprofessions.FemaleparticipationinthegeothermalworkforceFemaleemploymentremainslowdespite84percentofthesurveyedcompaniesreportingapolicyinplacetoimproveworkforcediversity.Apartfromoneoutliernearinggenderequality,14developersreportedhavingbetween4percentand30percentfemaleemployees.Thegenderdisparityisevenmorepronouncedwhenlookingaton-site44THREE.Geothermaljobsandskillsroles(includingthoseinconstructionandO&M),withfemaleparticipationrangingfromzeroto20percentatthehighend.TheseroleshavetraditionallybeenmaledominatedbecausetheyeitherrequiretechnicalSTEMeducation,inwhichwomenhavehistoricallybeenunderrepresented,orbecauseofculturalnormsandstereotypesaboutwhatareappropriaterolesforwomen.Evenwherefemaleemploymentpercentagesareimproving,otherchallengespersist.Womencontinuetobeunderpaidwhencomparedwiththeirmalecounterparts,despitehavingthesamelevelofskillsandresponsibility.Companiesandgovernmentsaremakingheadwayinaddressingthesegaps(seeboxes3.4and3.5).Forexample,in2019,theKenyanDepartmentofEnergyimplementedagenderpolicy,whichprovidesaframeworkformainstreaminggenderbalanceinseniorpositions.Thiswasdonetopromotewomenandgirls’participationinSTEMeducation,andgender-responsiveplanninginbudgetingandpolicydesign.ThiswasalandmarkandafirstontheAfricancontinent.Othercountrieshaverespondedatanevenhigherlevel,creatingnationalmandatesforgenderequalitythathaveledtogreatergenderequalityinthegeothermalindustry,andbeyond.InIceland,forexample,theActonEqualStatusandEqualRightsofWomenandMenmandatesanypublicandprivatecompanyboardorgovernmentcouncilorcommitteetohaveaminimumof40percentrepresentationofeithersex.Theactalsostipulatesthatanyprivatecompanywithmorethan25employeesmusthaveaformalgenderequalityprograminplace.Beyondthis,Icelandhasoneofthebestmaternityandpaternitypoliciesintheworld,makingiteasierfornewmothers(andfathers)tocontinuetopursuetheircareers.Photo:WINGgatheringinElSalvador.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS45BOX3.4ELSALVADOR:LAGEO—TAKINGACTIONTOIMPROVETHESHAREOFFEMALEEMPLOYMENTLaGEOisagovernment-ownedentitychargedwiththedevelopmentofgeothermalresourcesinElSalvador.LaGEOhastwogeothermalplants:thefirstwascommissionedin1975inAhuachapánandhasaninstalledcapacityof95megawatts(MW)andthesecondwasinauguratedin1992inBerlinandhasaninstalledcapacityof109.4MW.Twenty-fivepercentofthestaffatLaGEO,acrossbothadministrativeandtechnicalroles,arefemale.LaGEOistakingconcertedeffortstoimprovethisratiobyadaptingitspoliciesandfacilitiesasneeded,andhascommittedtoachievingthegoalofgenderequality.TableB3.4.1NumberofstaffbyemployeelevelandgenderatLaGEO,2022GENDERDIRECTORMANAGERMIDDLETECHNICALOPERATIONALTOTALWomen5023MANAGERSTAFFSTAFF132Men5077368133610876490Source:WorldBankmarketsounding2022.SomeoftheactionstakenbyLaGEOincludeimplementingflexibleworkinghoursandremoteworkingoptions,creatingfemale-friendlyspaces(e.g.,adedicatednursingroomfornewmothers),andcollaboratingcloselywithWomeninGeothermal(WING)andpartakingintheWINGmenSpecialTaskforce.46THREE.GeothermaljobsandskillsBOX.3.4(CONTINUED)Akeyfocushasbeenonimprovingfemaleparticipationintechnicalrolesthathavetraditionallybeenmaledominated.Everyyear,majormaintenanceiscarriedoutonthegeothermalgenerationunitsattheBerlinandAhuachapánpowerplants.Fortheseshort-termroles,menwerepredominantlyhiredforelectricalandmechanicalworks,andforcleaningpartsandequipment.Byprioritizingwomenfortheseroles,LaGEOhasachieveda30percentincreaseinfemaleparticipationinmaintenanceroles,from22womenin2016to83in2022.Photo:LaGEOfemaleemployeescarryingoutmaintenancework.Source:WorldBankmarketsounding2022.BOX3.5NEWZEALANDANDICELAND:SPOTLIGHTONTHEGENDERPAYGAPWhilewomenareunderrepresentedinthegeothermalsectorintermsofworkforceparticipation,theyalsofaceinequalityintermsofpay.Severalgeothermalcompaniesworldwidehavemadesignificantstridesinreducing,andeveneliminating,thisgap.ContactEnergy,aNewZealand–basedcompany,hastakenactionbydisclosingitspayequitystatisticsonaplatformcalledMindtheGap.Thecompanyhascommittedtomonitoringandreportingpaybygenderforrolesthatrequireasimilarlevelofskills,knowledge,andaccountability.AsofJune2021,ContactEnergy’sstatisticsindicatedthatwomenmake97.6percentofwhattheirmalecounterpartsearn.ContactEnergyalsoreportsonthemedianpaybygenderacrossthecompany;thishelpstoillustratethecompositionoftheworkforce.AsofJune2021,thepaygapacrossthecompanywas49percent.Thecompanyattributesthistothefactthatwomenareoverrepresentedincustomercontactrolesandmanymoremenworkingatthepowerstationsites.Monitoringandacknowledgingthegenderpaygapisthefirstandmostcriticalsteptoaddressthisinequality.ContactEnergyhascommittedtoeliminatingtheirgenderpaygapandattractingandcultivatingfemaletalentintechnicalroles.Iceland-basedReykjavikEnergydocumentedagenderpaygapof8.4percentin2008,meaningthatwomenwereearningonly91.6percentofwhattheirmalecounterpartswereearning.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS47BOX.3.5(CONTINUED)Unexplainedgender-basedpaygapatReykjavikEnergy(percentbyyear)9876543210-1YEARIn2017,ReykjavikEnergyworkedwithresearcherstodesignamodelthatallowspaytobecalculatedwithoutgenderbias.Usingthemodel,thecompanytookswiftactiontoadjustthecurrentemployees’paytoachievegenderpayequalityandimplementedthetooltobeusedbyhumanresourcesforeverynewhire.Thecompanyhasstatisticallyeliminateditsgenderpaygapeversinceitadoptedthemodelforuse.Source:MindtheGapn.d.;ContactEnergy2022;ReykjavíkEnergy2021.PAYGAP(%)20062008201020132014201520162017201820192020202148THREE.GeothermaljobsandskillsAssessingandrespondingtoskillneedsModelingthepotentialemploymentcreationfromgeothermaldevelopmentcanhelptoplanthenumberofjobsthatwillbeneededinthegeothermalsectorandtheirtype.Itwillalsoimprovethewayeducationandtrainingareprovidedtoaddressgaps.Itispossibletoestimatethedirect,indirect,andinducedjobimpactsofanestablishedgeothermalcapacitytargetusingdifferenteconomicmodelingtools.TheWorldBank(2022b)handbookASurePathtoSustainableRenewableEnergy:MaximizingSocioeconomicBenefitsTriggeredbyRenewablesoffersanoverviewofsucheconomicmodelingtools,andunderwhatcircumstancestheyarebestappliedtomodeljobcreation.TheInternationalLabourOrganization(ILO)alsooffersseveralguidebooksontheprocesstoestimategreenjobs,suchasAssessingGreenJobPotentialinDevelopingCountries:APractitioner’sGuide(ILO2011).Thefollowingthreemethodsarecommonlyusedtomeasurerenewableenergyjobs,andcanbeappliedwithinthecontextofthegeothermalsector:•Businesssurveysseekreal-life,on-the-groundemploymentnumbersfromspecificcompaniesandtheirprojectsindevelopment/operation.•Employmentfactorsestimatejobsbymultiplyingthenumberofjobscreatedforaspecificunit(e.g.,MW)bytheexpectedunitsizeofageothermalprojectorprogram.Jobsareexpressedasfull-timeequivalents,whichequatetoapersonworkingfulltimeforoneyear.Employmentfactorscanbefoundinexistingliteratureandareestimatedbasedondatacollectedfromcompaniesandgovernments.•Input/outputtablesutilizeastatisticalmethodtoquantifyemployment,whiletakingintoaccounttheinterdependenciesofeconomicsectors.Box3.6presentsaninput-outputmodelproducedbytheUS-basedNationalRenewableEnergyLaboratorytoestimatetheemploymentimpactsofgeothermalcapacityexpansion.Formacroeconomicparametersbeyondemployment(includingGDP,fiscalrevenues,andtradebalance),input-outputtablesandcomputablegeneralequilibriummodelscanbeused.Resultswilldependuponthequalityofinputdataandthemodel’slevelofdetail(WorldBank2022b).Inadditiontoquantifyingjobs,itcanbeimportanttoconsiderotherdimensions,suchasformalvs.informalemployment,andgrossemploymentvs.netemployment.Formalemployeesareemployedundercontract,earnasalary,andcontributetothenationalsocialsecuritysystem(ILO2011).Informalemployeesearnincomeworkinginaspecificjob,butdonothaveacontractualagreementwiththeemployerincharge.Itisoftendifficulttoquantifyinformalemploymentbecausemanycompanieschoosenottoreportit,andhence,theirdatawillnotbeaccountedforingovernmentemploymentstatistics.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS49Grossemploymentisthenumberofjobscreatedbyaproject.Netemploymentisthenumberofjobscreatedminusthosedisplacedasaresultofatechnology’sexpansionorintroduction.Whenforecastingtheeffectsofaplannedgeothermalprogram,netemploymentmaybeimportanttoestimate;theintroductionofnewgeothermalcapacitycreatesjobsyetalsoresultsinjoblossesinotherindustries(suchasinfossilfuels)(ILO2011).BOX3.6THEGEOTHERMALJOBSANDECONOMICDEVELOPMENTIMPACTMODELTheGeothermalJobsandEconomicDevelopmentImpact(JEDI)modelisauser-friendlytoolthatcanestimatetheeconomicimpactsofconstructingandoperatingageothermalpowergenerationplant.TheExcel-basedmodelisavailableforfreeandcanbedownloadedfromtheNationalRenewableEnergyLaboratory’swebsite.Thedatausedforthemodelweregatheredfromgeothermalprojects,aliteraturereview,conversationswithindustryprofessionals,andanexistingmodelcalledtheGeothermalElectricityTechnologyEvaluationModel.Themodelusesdefaultvaluesintendedtoberepresentativeofatypicalgeothermalproject,andtofacilitateagenericimpactanalysis.ThedefaultvaluesarebasedonreasonableexpenditurepatternsforconstructingandoperatinggeothermalprojectsintheUnitedStates.Modelusersareencouragedtoinputasmuchproject-specificdataaspossible,sinceresourcecharacteristics,location,financingarrangements,andotherfactorswillinfluencetheactualconstructionandoperatingcosts.WhiletheJEDImodeliscustomizedtoestimatetheimpactsofelectricitycapacityexpansion,theNationalRenewableEnergyLaboratoryhasdevelopedanothermodel,calledtheEconomicImpactAnalysisforPlanningmodel,toestimateimpactsfromdirectusedevelopment.Source:NREL2019.50THREE.Geothermaljobsandskills“Strategichumanresourcesplanningmustbeintegratedwiththeassessmentofgeothermalresourcepotential,harmonizingthecollectivevisionofgovernmententities,developers,industry,researchinstitutes,universities,andotherstakeholdersineachcountry.”HeberDidierDiezLeon,President,MexicanGeothermalAssociationIncertaincountriesforwhichdataexist,acomparisonofjobprojectionswithlaborstatisticsanddataonexistingeducationandtrainingprograms(andtheirgraduationrates)canhelpassesswhethertheavailablelaborwillmeetcurrentandfuturedemandfromthegeothermalsector(WorldBank2022b).Skillsetsthatcanbetransferredfromotherindustriescanalsobeconsidered.Forexample,therearemanyskillsynergiesbetweenthefossilfuelandgeothermalsectors(seebox3.7).Again,theWorldBankandILOofferseveralusefulguidebooksandtoolkitsthatoutlinethisprocess.Theseinclude:•ASurePathtoSustainableRenewableEnergy:MaximizingtheSocioeconomicBenefitsTriggeredbyRenewables(WorldBank2022b)•AnticipatingSkillNeedsforGreenJobs:APracticalGuide(ILO2015)•GreeningTVETandSkillsDevelopment:APracticalGuidanceTool(ILO2022b)AnILOsurveyof32countries,conductedin2011andagainin2019,indicatesthatmostcountrieslackcomprehensiveinformationonskillgapsandskillsshortageswithrespecttogreenjobs(ILO2019).Whileskillneedshavebeenidentifiedandanticipatedbettersince2011,institutionalizedmechanismsforskillanticipation,withprivatesectorinvolvement,remainexceedinglyrare;onlyahandfulofcountriesactivelymonitorandevaluatelaborandsupplyanddemandinrenewables.Thismakesitdifficulttodevelopspecificskillpoliciesanddesignresponsiveandeffectiveeducationandtrainingtomeetthecurrentandfuturedemand.Thischallengeiscompoundedbytheweaklinksthatpersistbetweenrenewableenergypoliciesandskillandtraininglevels.Ministriesdealingwitheducationandtrainingandemploymentarepoorlyrepresentedinpolicymakingonclimatechangeandrenewableenergy.Wherecoordinationdoesexist,ittendstobeadhoc,withalackofmonitoringandevaluation.TheILOhighlightstheimportanceofimprovedinterministerialcoordinationtoactivelyassessandrespondtolaborandskillneeds(2019).GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS51BOX3.7SKILLSYNERGIESBETWEENTHEGEOTHERMALANDOILANDGASSECTORSThegeothermalandoilandgassectorshavemanyskilloverlapsbetweenskilledandunskilledroles.Whiledrillingjobsarecertainlyapriorityforthegeothermalsector,otherskills,fromdesign,manufacturing,andinstallation,tooperation,arealsovaluable.Countriescanleveragethisskilloverlapinlaborbetweenthegeothermalandtheoilandgassector(and,toalesserextent,thecoalsector).Projectplanning.Bothgeothermalandoilandgasrequiresurfacestudies,testwelldrilling,andreservoirmodelsduringprojectplanningtoevaluateundergroundresources.Geothermalreliesonawiderangeofskills,includingdifferentgeosciencedisciplines(e.g.,geophysics,geochemistry,andgeology),aswellasexpertiseinenvironmentalandsocialevaluation.Eventhoughmanyaspectsoftheseenergysectorsarethesame,anunderstandingoftheuniqueconditionsisessential(Umametal.2018).Reskillingoflaborfromtheoilandgassectortowardgeothermalwillthusfocusonspecificconditionsinthegeothermalsectorsuchasrocktype,chemistry,pressure,andtemperature,andinterpretationofinformation.Designandmanufacturing.Themostimportantdifferencebetweengeothermalpowergenerationandconventionalpowerplantsisthegatheringsystem(steamandbrine).Specificknowledgeisrequiredtooptimizethegeothermalenergyproducedandtopreventscalinganderosionbyidentifyingmaterial(thechemicalcompositioningeothermalfluid)andoperationalpractices.Anotherspecificdesignconditioningeothermalisthenoncondensablegascontentinthesteamthathastobereleased.Becausethesteamissaturated,itcandegradeturbines,pipes,andotherequipment.Mechanicalsystemsforgeothermalenergymustthereforebemanufacturedanddesignedfollowingspecificprotocolstocombatscalinganderosion.Reskillingwillberequiredespeciallyfordesignteams.Installationandoperationandmaintenancerequiresimilarsharesofskilledandunskilledworkers,regardlessofthetechnology.Sector-specificknowledgeisrequiredintheenvironmental,health,andsafetyaspectsuniquetoaresource.Alsoessentialisspecificknow-howforoperatinggeothermalfluid-gatheringsystemsandgeothermalflashturbines.However,engineers,mechanics,andelectriciansneednotundergoextensivereskilling.Source:ExtractedfromWorldBank(2022).52THREE.GeothermaljobsandskillsGeothermaleducationandtrainingTodate,thepublicandprivatesectorshavebothplayedanimportantroleinprovidinggeothermaleducationandtraining—thepublicsectorthroughformaleducationalinstitutionssuchasuniversitiesandTVETinstitutesandtheprivatesectorthroughscholarshipprogramsforstaff,in-housetrainingprograms,andon-the-joblearning.Theprivatesector’sinvolvementhasbeennecessitatedbytheimmaturityofthegeothermalmarket,butalsoduetotheneedforgeothermalworkerstoobtainhands-on,field-based,learningexperience.Nevertheless,relativelyfewformaleducationalinstitutionsofferspecializedgeothermalinstruction,andtheytendtobeconcentratedinafewdevelopedgeothermalmarkets,forexample,IcelandandNewZealand.TheInternationalGeothermalAssociation(IGA)maintainsausefuldatabase,whichlistsacollectionoftheseprogramsacrossallcontinents.Manyprogramsworldwide,however,coverthebaseskillsrequiredtoenterthegeothermalindustry(e.g.,typicaldegreesinelectrical,mechanical,civil,andenvironmentalengineering).Thesameistrueofvocationaltrainingprograms,suchasthosedesignedforweldersandelectricians.Programsthatwereoncetargetedattheoilandgassector—forexample,degreesinreservoirmanagement—arealsoincreasinglyexpandingtheirscopetooffergeothermal-specificinstruction.Manygovernmentsarealsoconsideringthepotentialtoreskillindividualsfromdecliningindustriessuchasoilandgastoleveragecapabilitiesbutalsopreservejobsandeconomicprosperity.Manyskills,especiallyforlow-andmedium-skilledroles,couldbetaughtonthejob—asevidencedbyanIndonesiandeveloperthatoffersstructuredon-the-jobtraining(seebox3.3).Ofthe15developerssurveyedforthisreport,86percentreportedhavinganestablishedgeothermaltrainingprogramfornewlyrecruitedstaff.“Geothermalusesmanyofthesameservices,technologiesandpersonnelastheoilandgassector.ThereisauniqueopportunitytoquicklyleverageoilandgascapabilitiesandtechnologiesintothegeothermalsectorwhilepreservingjobsandregionaleconomicviabilityandensuringUSenergysectorvitality.”DouglasHollett,FormerPrincipalDeputyAssistantSecretary,UnitedStatesOfficeofFossilEnergySource:ThinkGeoEnergy.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS53Inmanycountries,therewilllikelynotbesufficientdemandtojustifythecreationofdedicatedandspecializedgeothermalprogramsuntilmultipleprojectshavebeenestablished.Toavoidthepitfallsoftrainingwithoutemploymentprospects,somecountriesdevelopingtheirrenewableenergyskillbasehavechosentofocusonmedium-skilledroles,particularlyinthetrades,forexample,weldersandelectricians.Theserolestendtobeeasilytransferrablebetweensectorsandcanhelptoensurethatindividualsaretrainedtobeemployableinthelongrun,notforunsustainablelaborniches.Incountrieswheregeothermaldevelopmentisinitsinitialstages,interestedstudentsoftenpursueeducationalopportunitiesabroad(oftenwiththefinancialsupportofageothermaldeveloper).Somecountriesarechoosingtodeveloptrainingprogramsataregionallevel,toachieveeconomiesofscale(WorldBank2022b).Box3.8outlinesaWorldBankinitiativetoscaleupregionalvocationaleducationandtrainingforthegeothermalindustry.Whendevelopersprovidefinancialsupportfortheiremployeestostudyabroad,theyoftendosowiththeconditionofanemploymentbond.Forexample,anemployeereceivingacompany’sfinancialsupporttostudyabroadforfouryearsmustreturntothatcompanyasanemployeeforatleastfouryears.Otherwise,theyarerequiredtocompensatethecompanyfortheireducationalexpenses.Measuressuchastheselimit“braindrain”andpoachingbyothercompanies.Formanyyears,theGeothermalTrainingProgram(GTP)programoftheCentreforCapacityDevelopment,Sustainability,andSocietalChange(GRÓ)hasfilledacriticalgapingeothermaleducationfordevelopingcountries.However,countriessuchasKenyaandElSalvadorareincreasinglybeingviewedasregionalhubsforgeothermaleducationandtraining(seebox3.9).“Trainingisabiginvestment,butitpreventsbigandexpensivemistakes.CyrusKaringithi,AssetManager,KenGen,Kenya54THREE.GeothermaljobsandskillsBOX3.8EASTAFRICA:AREGIONALAPPROACHTOTECHNICALANDVOCATIONALEDUCATIONANDTRAININGTechnicalandvocationaleducationandtraining(TVET)programshavetraditionallybeenaimedatlocalandnationalmarketsandhavebeenchallengingtoscaleup.ButasthedemandfortechnicalskillsgrowsacrossAfrica,andemployersfacechallengestorecruitingindividualswithspecializedtechnicalskills,thereisanurgentneedtostrengthenandintegratetheprovisionofTVETprogramsintheregion.Whileitmaybechallengingforindividualcountriestoproduceallthenecessaryskillsdomestically,aregionalapproachcouldachieveeconomiesofscale,whilealsofacilitatingtheregionalmobilityofqualifiedworkers.TheEastAfricanSkillsforTransformationandRegionalIntegrationProject(EASTRIP)isaWorldBank–financedfive-yearprojecttoimproveaccesstoTVETprogramsandtheirquality.ItisaWorldBankinitiativeinpartnershipwiththegovernmentsofEthiopia,Kenya,andTanzania.Theprojecthascreatedacommonframework,whichwillallowthetransferofqualificationsbetweencountries.EASTRIPiscurrentlysupporting16TVETinstitutes,includingtheKenGenGeothermalTrainingCentre,whichwillfocusondevelopingspecializedtechnicalskillsrequiredbytherapidlygrowingEastAfricangeothermalindustry.TheregionalTVETinstituteshavebeensupportedtocreateindustryadvisorycommittees,conductmarketsurveysonskillneeds,andpursueindustrycertificationinadditiontoregulatoryapproval.Theinstituteshavebenefitedfrompeerlearningamongcountries;WorldBanktrainingonmanagement,financialmanagement,competitivebidding,andestablishingriskmitigationmeasures,andtechnicalassistanceprovidedbybilateralpartnersinChinaandtheRepublicofKoreatoupskillfaculty.Attractingfemalestudentsandtrackinggraduates’andemployers’satisfactionhavebeencentralcomponentsoftheproject.Theinitialthreeroundsofverificationshowthattheprojectcouldsubstantiallyexpandaccessandimprovetheprograms’quality,andboostgraduates’employmentrates.Themostrecentresultsshowthat:•Enrollmenthasincreasedfromthebaselineof6,971studentsto30,776;•Enrollmentoffemalestudentshasincreasedfromthebaselineof741studentsto5,230students;and•Thenumberofgraduatesemployedwithinsixmonthshasincreasedfrom47percentto69percent.Source:EASTRIP2022a,2022b,2022c.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS55BOX3.9ICELAND:THEGEOTHERMALTRAININGPROGRAM—BUILDINGEXPERTISEINDEVELOPINGCOUNTRIESTheGeothermalTrainingProgram(GTP)currentlyundertheCentreforCapacityDevelopment,Sustainability,andSocietalChange(GRÓ)waslaunchedinIcelandin1979withthecentralpurposeto:•Strengthengeothermalexpertiseindevelopingcountries,•Provideintensivehands-ontrainingtouniversitygraduatesengagedingeothermalwork,•EnhanceskillsbyallowingfellowstoworkalongsidegeothermalprofessionalsinIceland,and•Providetailor-madetrainingbasedonspecificinstitutions’andspecificcountries’needs.Formanydecades,theGRÓGTPhasfilledacriticalgapforcountrieswithnoorlimitedgeothermal-specificeducationprograms.Whilethesecountriesrequireskilledpersonnel,theymaynotnecessarilyhavethedemandtowarrantthecreationofgeothermal-specificprograms.TheGRÓGTPisalsouniqueinitsfocusondevelopingexpertisethroughhands-onlearningexperiences.Theprogramtakesfellowsoutoftheclassroom,tolearnfromsitevisits,practitioners,andfieldexperts,andbuildconnectionswithadiversecohortfromdifferentpartsoftheworld.ThecoreactivityoftheGRÓGTPhasbeenasix-monthtrainingprogram,whichisdeliveredinIceland.Asof2022,766fellowsfrom65countrieshadgraduatedfromthisprogram.TheGRÓGTPalsoallowsfellowswithoutstandingperformanceinthesix-monthprogramtoadvancetheirstudiesandcompleteamaster’sordoctoratedegree.Since1998,81studentsinthesix-monthprogramhavecompletedtheirMasterofSciencestudiesandfivehavecompletedtheirPhDstudies.TheGRÓGTPalsooffersshortcoursesonlocationandrecentlybeganofferingonlinecourses.Thesehavingjointlybenefitedabout3,000participants.56THREE.GeothermaljobsandskillsBOX.3.9(CONTINUED)Throughfourdecadesinoperation,about25percentoffellowshavebeenfemale.Thisratiocontinuestoimproveyearonyear,andthenumberofmaleandfemaleparticipantswasnearlyequalin2021.TheGRÓGTPnowactivelypromotesfemaleparticipationthroughgender-balancedcandidateselectionandtargetsgenderequalityacrossallitsprograms.TheGRÓGTPhasplayedanimportantadvisoryroleinthedesignandimplementationofgeothermaldiplomaprogramsinemerginggeothermalmarkets.ApartnershipamongtheGRÓGTP,LaGeo,andtheUniversityofElSalvadorhasresultedinthecreationofanewfive-monthgeothermaldiplomaprograminElSalvador,whichin2022attracted29studentsfromColombia,Mexico,Nicaragua,theDominicanRepublic,Honduras,PlurinationalStateofBolivia,Argentina,andElSalvador.Theprogramhasakeyfocusongenderequality;44percentofthestudentsinthemostrecentcohortwerefemale.ThisprogramisincreasingopportunitiesinLatinAmericaforindividualstoreceivegeothermaltrainingintheirnativelanguageandhaspositionedElSalvadorasagrowinghubforgeothermaleducation.Source:WorldBankmarketsounding2022;Axelssonetal.2022.Photo:AgroupofGRÓGTPsix-monthtraineesonafieldactivityGovernmentsoftenseekfundingfrominternationalinstitutionsandothergovernments(e.g.,Iceland,Japan,NewZealand)tosupportgeothermaldevelopmentbybuildingthecapacityoftheirentitiesengagedinthesector.GrantsavailablethroughtheWorldBank,theUnitedNationsDevelopmentProgramme,andtheUnitedNationsEnvironmentProgrammehavelongbeenamajorsourceoftechnicalassistanceforgeothermalenergy.Thistechnicalassistancecanvaryinscope,whichincludes,forexample,specificprojectpreparationworktohigh-levelpolicyadvicetogovernments,regulators,andutilities.Developinggovernmentsrequiretechnicalassistanceespeciallytosupport:•Thedesignofpolicyinstrumentstosupportgeothermalenergy;•Pricingandcostrecoverymechanismsforcountrieswheregeothermalenergyisnottheleast-costoption;•Theapplicationofavailableclimatefinanceinstrumentstomonetizegreenhousegasreductions;•Thedesignandimplementationofrisk-mitigationinstruments;•Thedesignorimprovementofthetenderingprocessandtenderdocuments;•Privatesectorparticipationandpublic-privatepartnershipmodelsforgeothermalinvestment;and•Thescopingofopportunitiestodeveloplocalmanufacturing.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS57Photo:AnESMAPdirectusestudytourofanIceland-basedgeothermalfishdryingfacility,2022“Governmentcommitmenttogeothermaltargetsiskeytospurringeducation.”ProfessorGioiaFalcone,UniversityofGlasgow,UnitedKingdomCommunicatingtheopportunitiesinthegeothermalsectorwillbecrucialincreatingdemandforgeothermaleducationandtraining.Individualswillinvestingeothermaleducationwhenaviablecareerpathiscleartothem;thiswillrequiregovernmentstocommitthemselvestogeothermaldevelopment.Encouragingthedevelopmentofaskilledgeothermalworkforcemustbeginwithstudents.Givingbothhighschoolanduniversitystudentsawindowintothegeothermalsectorcouldhelptoincreaseawarenessandenthusiasmaboutthecareeropportunitieswithinthisfield.Boxes3.10and3.11describetwoinitiatives,inNewZealandandtheUnitedStates,respectively,whichseektointroducestudentstothegeothermalindustry.Programsandinitiativessuchasthesepresentauniqueopportunitytoengagewomenanddisadvantagedgroupsinthegeothermalindustryfromanearlyage,creatinggreateropportunitiesformentorshipandcareerprogression.58THREE.GeothermaljobsandskillsBOX3.10NEWZEALAND:ENCOURAGINGMĀORIYOUTHTOPURSUECAREERSINGEOTHERMALENERGYTheToiKaiRawaTrustisaNew-Zealand-basedMāorieconomicdevelopmentagencythatservestoimproveMāoriprosperity,includingwealthandwell-being,andcultivateyoungleaders.AkeygoaloftheToiKaiRawaistosupporttheMāoriintheregiontoexceedthenationalaverageincomelevelsby2030.Forthis,ToiKaiRawahasdevelopedarangeofpartnershipstopositionMāoriforhigh-valuejobs.Onekeyfocushasbeenondevelopingthegeothermalworkforceofthefuture.TheMāoriSTEAMStrategyseekstoimproveMāori’sparticipationinscience,technology,engineering,andmathematicsbyencouragingmorestudentstopursueeducationandcareersinthesefields.Thestrategyincludesworkshops,discoverytours,youthsummits,amentorshipprogram,andinternshipswithagoaltoeducatemoreMāoriyouthinthefieldandexposethemtodifferentcareerpaths.Source:ToiKaiRawa2020.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS59BOX3.11UNITEDSTATESOFAMERICA:ENCOURAGINGSTUDENTSTOENTERTHEGEOTHERMALSECTORTheUSDepartmentofEnergy’sGeothermalTechnologiesOfficerunsanannualstudentcompetition,calledtheGeothermalCollegiateCompetition(USDOE2022b),whichengagesstudentsfromacrossthecountryinsolvingreal-worldproblems.Thecompetitionservesadualpurpose:•Toinspireanewgenerationofgeothermalscientistsandstakeholdersandgivethemanopportunitytoengagewithindustryexpertsaswellastheircommunities,and•Tocontributetoresearchandinnovationfortheexpansionofgeothermalenergy.Thecompetitionrunsforanentireacademicyear,withthethemeshiftingfromyeartoyear.In2022,thecompetitionfocusedonplanningadirectuseproject,whichwouldrequireteamstofollowtheprocessesofsiteidentification,resourceassessment,demandassessment,conceptualdesign,andstakeholderengagement.Thewinningteamofthe2022competition,fromtheUniversityofOklahoma,wasawarded$10,000fordesigningasystemtorepurposesixabandonedoilandgaswellstoprovidegeothermalenergyformorethan730,000squarefeetofeducationalandmunicipalbuildings,includingbuildingsownedandoperatedbythearea’sindigenouscommunities,theAbsenteeShawneeTribe,andCitizenPotawatomiNation.AllthestudentsofthisteamwereenrolledintheoilandgasprogramoftheUniversityofOklahoma,butseveralofthemchosetopursuetheirmaster’sanddoctoratestudieswithafocusongeothermal,havinghadsuchanin-depthexposuretothegeothermalindustry.Theteamisalsohopefultoturntheirprojectintoareality.Source:NREL2022;USDOEwebsite.Photo:GeothermalCollegiateCompetitionAward.60THREE.GeothermaljobsandskillsEncouragingtheprivatesectortocreatedomesticemploymentopportunitiesJobscreatedatthelocallevel,withinthecommunitiessurroundinggeothermalprojectsites,canhavefar-reachingsocioeconomicbenefitsandcancontributesignificantlytoprojectsgainingsocialacceptance(asdetailedinchapter4).Rolesthatcaneasilybefilledbylocalcommunitymembersincludeconstructionlaborers,drivers,securitypersonnel,cooks,cleaners,communityengagementliaisons,andadministrativestaff.Withsometraining,itisalsopossibletohireindividualsforfieldandpipelinemaintenance,andforplanttechnicianandoperatorroles.Table3.3presentsseveralapproachestakenbygovernmentstoencouragedevelopers,andtheirsubcontractors,tohirefromprojectcountriesandcontributetoworkforcedevelopment.TABLE3.3EncouragingtheprivatesectortoupskillandemploythedomesticworkforceSTRATEGYDESCRIPTIONRequestdevelopersRequestingsuchaplanwillensurethatdevelopershavedesignedtoproduceaplanastrategyforrecruitingdomesticstaff.Itwillalsoencouragetheirforhowtheywillsubcontractorstohiredomesticstaff.Suchaplanwouldalsooutlineemploydomesticthetypesofrolesthatcouldbefulfilledbythelocalpopulationand(andlocal)workersmaypotentiallyincludeplansfortrainingthelocalworkforcetoupskillindividualstoalevelthattheyareemployable.IncentivestohaveapercentageofDeveloperscanbeincentivizedtocommittoprespecifiedtargetsforlocal/employeesthatdomesticemployment(e.g.,additionalpointsawardedintheproposalarecitizensoftheevaluationstage).Theserequirementsmaythenbecomecontractualprojectcountryobligations,forexample,inthepowerpurchaseagreement.RequirementSuchincentivesmaybebrokendownfurthertoencouragethehiringoftoimplement/womenand/orsociallydisadvantagedgroups.fundeducation,apprenticeships,andDevelopersmayberequiredorincentivizedtoprovideeducationandtrainingprogramstrainingtothedomesticworkforce,orincorporateapprenticeshipsintotheconstructionphase.Developersmaycontributetotheestablishmentofhighereducationprograms;supportexisting,ordevelopnew,vocationaltrainingprogramsinwelding,electricalwork,plumbing,andmasonry;offerapprenticeshipsoron-the-jobtraining;oracombinationofall.Havingdevelopersprovidetrainingcanhelptoensurethosebeingtrainedreceivepracticalandhands-ontrainingspecifictothegeothermalindustryandthattheyreceiveemploymentposttraining.Suchincentivesandrequirementsmaybebrokendownfurthertoencouragetrainingandeducationprogramstargetingwomenand/orsociallydisadvantagedgroups.Source:BasedonfindingsfromWorldBankmarketsounding(2022).GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS61FOUR.ENSURINGTHATGEOTHERMALPROJECTS’SOCIOECONOMICBENEFITSAREFELTBYLOCALCOMMUNITIESEachphaseofgeothermaldevelopment—fromtheinitialscientificassessment(s)andexplorationdrillingtooperations—hasanimpactonthecommunitieswhereprojectsarelocated.Impactscouldrangefromincreasednoiseandtraffic,tothepossibilityofinducedseismicity.Allgeothermaldevelopersmustthereforehavecommunitybuy-in—a“sociallicensetooperate,”whichisan“impliedconsent,independentfromlegalorstatutoryrequirements”(CROWDTHERMALn.d.).Inthiscontext,developersengageintimelyconversationswiththecommunitiesnearprojectsites.Theseinteractionshelpdeveloperstounderstandandmitigatetherisksinvolved,besidesaddressingcommunitymembers’expectationsbyadoptingrelevantprojectdesign,creatinglocalemploymentopportunities,andestablishingcommunity-basedprojectsandprograms,whichtypicallybecomepartofacorporatesocialresponsibilitystrategy.Utility-scalegeothermalprojectshavealengthyleadtimeof5–10years(WorldBank2012;Gudmundsson2016).Often,communitiesaredispleasedifnotangiblebenefitsmaterializewithinthistimeframe.However,investorsmaynotbereadytoinvestheavilyincommunitieswithoutguaranteesthataprojectisviableanduntiloperationsgeneratecashflow(WorldBankmarketsounding2022).Theseissuesrequireattention,especiallyinremote,impoverished,andmarginalizedcommunities,whichhavelittleinfrastructure,lowliteracyrates,andlittleunderstandingofgeothermalenergy.Developers,therefore,mustfindacarefulbalancebetweencommunities’wantsandneedsandwhattheycanrealisticallydeliverbeforeandafteraprojectbecomesoperational.Fromdevelopers’perspective,theycannotbesubstitutesforgovernments,whichareexpectedtoprovidecommunitieswiththeinfrastructureandprogramstheyneed.Yetdevelopersalsorequirecommunityconsentandbuy-in.Togainthissociallicensetooperate,itiscriticalthatatrustingrelationshipbeestablished—onethatbenefitsallparties,minimizesdrasticchangestoexistingconditions,andleaveslastingbenefitswithincommunities(Karytsas“Youcanhaveaveryetal.2019).Itisworthrememberingthatagoodproject,butsociallicensetooperateisnotgrantedjustonce;itisanongoingprocessofacceptancewithoutasociallicense,andapprovalthroughtheentirelifecycleofayoucannotdevelop.Thegeothermalplantanditsoperation.communitywilleithercelebratewithyouorbeupinarmswithyou—it’sachoice.”CyrusKaringithi,AssetManager,KenGen,KenyaGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS63Closecommunicationandtransparentmessagingallowdeveloperstobuildtrustandrelationshipsattheearlystagesofprojectfeasibility,exploration,anddrilling(moredetailsinsection4.1.3).Thisisespeciallycriticalwhenageothermalprojectmaybesitedonornearareasofhistoricaland/orculturalimportance(seebox4.1).TheCROWDTHERMALproject,fundedbytheEuropeanCommission,developedaconceptualframeworkforthesociallicensetooperate.Theframeworkaimstoreducetherisksassociatedwithsocialconflictandimprovetransparencyingeothermaldevelopment(seefigure4.1andbox4.8).Theframeworkprovidesmeasurableindicatorsatfourlevels,fromlowtohigh,dependingontherelationshipsbetweencommunitiesanddevelopers.BOX4.1NEWZEALAND:THENEEDTORESPECTANDUNDERSTANDLOCALCULTURES,RELIGIOUSBELIEFS,ANDPRACTICESGeothermalresourceshavebeenusedbycivilizationsformillennia,forrecreation,bathing,andhealing.Insomecontexts,theseresourceswerealsoregardedasmorethannaturalfeatures.TheEarth’sheatwasoftenviewedasadivinegiftortoevenpossessdivinepowersitself.Inmanyculturestoday,acrossallcontinents,geothermalenergycontinuestoplayanimportantroleinspiritualandreligiousbeliefandrituals.Somelocationswithlargegeothermalenergydevelopmentpotentialare,therefore,alsosacredsites.Understandingthespiritualimportanceofgeothermalresourcescanbeanessentialfirststepingainingsocialacceptanceforaproposedproject.IncountriessuchasIndonesia,Kenya,theUnitedStates,andChile,oppositiontiedtospiritualandreligiousbeliefshasdelayedorevenhaltedprojects.NewZealandhasservedasaninterestingexampleofacountrythathaspositivelymanagedbothsocietalprioritiesandprojectdevelopment.NewZealand’sMāoritribesconsidergeothermalresourcessacred,andtheseresourcesholdacriticalimportanceintheMāoritribes’religiousceremonies.NewZealand’senergyutilities,independentpowerproducers,andMāoritribeshaveworkedtogethercollaborativelytoensurethattherightsandcustomsofMāoricommunitiesareprotected,whilethecountryalsomeetsitsenergyneeds.Source:WorldBankmarketsounding2022;Jackson,Addison,andArbury2021;LuketinaandParson2019.64FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesFIGURE4.1Developinggeothermalenergy:Amodelforthesociallicensetooperate(SLO)SLOINDICATORSHighSocialCo-ownership•PoliticalsupportAcceptance&•UnitedfrontagainstMutualBeneﬁtsSLOApprovalcriticsCo-productionSocialCapital•Identiﬁcation,AdvocacyCommunityEngagementSLO•Co-managementofDialogueMediumAcceptanceSocialCoreStakeholdersprojectsGovernanceandBroadStakeholdersSLOAcceptanceWithheld–TRUST&MutualWithdrawnBeneﬁtsINDICATORS•CompanyseenasgoodNegotiationLowSocialandPoliticsAcceptance&neighbour•PrideincollaborativeMutualBeneﬁtsachievementsCREDIBILITYINDICATORS•Lingering/recurringissuesandthreats•WatchfulMonitoring•PresenceofoutsideNGOsLEGITIMACYINDICATORS•FundamentalConﬂictsinvalues•Shutdowns,blockages•Legalchallenges•Boycotts•Violence/sabotageSLOLevelsBarriers,IndicatorsandSolutionsValuesLevelsStakeholdersSource:CROWDTHERMALn.d.Note:NGO=nongovernmentalorganization;SLO=sociallicensetooperate.Besidesthesociallicensetooperate,thereareothermotivationsfordeveloperstosharebenefitswithcommunities.Insomecontexts,theymayneedtocommittoprovidingcertaincommunitybenefitstodemonstratecompliancewithgovernmentregulationsandobtainoperationalpermits.Inotherinstances,theireffortsmaybetocomplywithlenders’requirements,forexample,thoseoutlinedbydevelopmentfinanceinstitutions.Forpubliclylistedcompanies,aCSRstrategymaybecriticaltoenvironmental,social,andgovernance(ESG)ratingsandtheabilitytoattractinvestmentsfromretailandinstitutionalinvestors.Othersmaybedrivenbytheirpublicimagemorebroadly,wantingtobeviewedassustainablecompaniesinallrespects,beyondthegreenenergybeingproduced.Onalloccasions,thereismutualgaintobefound.Box4.2pointstooneexampleinJapan,whereadeveloperworkedcloselywithcommunitymemberstohelpreviveonsens,traditionalJapanesethermalbaths.Thedeveloperwasabletocapitalizeonanewsourceofgeothermalheattobeharnessedforpowerproduction,andsmallbusinessownersbecamemorefinanciallysustainablebyaccessinganewstreamofrevenue.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS65BOX4.2JAPAN:CREATINGNEWREVENUESTREAMSFORRURALCOMMUNITIESBaseloadCapitalsawanopportunitytopartnerwithruralcommunitiesinJapantonotonlyoperateitsbusinessbutalsocontributetothesecommunities’economicresilience.Japanhasalonghistoryandtraditionofonsens,whicharenaturalhotsprings,oftenaccompaniedbyaninncalledaryokan.Smallruralbusinessescontinuingthistraditionhavestruggledfinanciallyinrecentyears,withmanyhavingtoclosetheirdoorstotourists.BaseloadCapitalcreateditsfirstsmall-scalepilotprojectbyworkingwithlocalbusinessownerseagertocontinuetheirtraditionfromonegenerationtothenext.Thepilotprojectisdesignedtoutilizeheatfromthehotspringstoproducepower.Thehotwaterisfirstusedtogenerateelectricity.Thenthehotwaterissuppliedtotheonsensviapipesatatemperaturesuitableforbathing.Theplantnotonlyprovidesastablesupplyofcleanelectricityandhotwater,ithasalsocreatedanewsourceoflong-termrevenuefortheonsenowners.BaseloadCapitalandcommunitymembershopethatthismodelofpairingruraltourismandelectricitygenerationcanbereplicatedelsewhere.Photo:OneofBaseload’spowerplantsinJapan.Source:WorldBankmarketsounding2022;BaseloadPowern.d.;Richter2020.Inthecontextofthisreport,benefitsharinggoesbeyondcompensationforadverseenvironmentalandsocialimpacts(suchascompensationwhenrelocationisarequirementforprojectdevelopment).Whereascompensationisquitecommonplaceinthegeothermalsectorandmandatedbylawthroughcountries’socialandenvironmentalsafeguardframeworks,benefitsharingremainsprimarilyvoluntary.Someexampleswherebenefitsharinghasbecomemandatoryduetoregulationareoutlinedinsection4.2.66FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesVariousmechanismsandmodelsforbenefitsharingexist.Benefitsharingcanbeintheformofdirectmonetaryprovisionsornonmonetaryprovisions,wherebysupportisprovidedindirectlythroughdifferentlocaldevelopmentprojectsandprograms(WorldBank2022b).Examplesofdirectmonetarybenefitsharingincluderevenueorequitysharing,orthecreationofcommunity-leddevelopmentfunds.Examplesofnonmonetarybenefitsharingincludeimprovementstoinfrastructure,supportforhealthandeducationprograms,betterenvironmentalremediationandprotectionprograms,andlocalemploymentopportunities.Section4.3expandsonthesemechanisms,ascategorizedbelow:1.Improvementofornewadditionstoservicesandlocalinfrastructuresuchasroadsandwells;2.Community-levelskillandcapabilityenhancement(includingskillsrelatedtothegeothermalproject);and3.Revenue-/ownership-sharingarrangements.Photo:EnvironmentalconservationprogramfundedbyLaGeoinElSalvadorGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS67LessonsinbenefitsharingGeothermalprojectsaroundtheworldoffermanylessonsthatshowcasehowbothgovernmentsanddevelopershaveworkedalongsidecommunitiestoplanandimplementbenefitsharingmechanisms.Intheinterviewsconductedforthisreport,itwasquiteacommonobservationthatdevelopersinvestedincommunities,aboveandbeyondwhatisrequiredbylawforcompensation.Anotherobservationwasthatdevelopersshareacommonapproachtoidentifying,prioritizing,andimplementingprojectsthatbenefitcommunities.Figure4.2summarizestheengagementprocess,andthefollowingsubsectionsoutlineitingreaterdetail,fromgeneratingsocioeconomicevidenceandconductingearlyengagement,tothedesignofacommunityengagementplanandtheimplementationofbenefitsharingprojectsandprograms.PolicyandregulatorydesigntoboostbenefitsharingPoliciesandregulationscanbecrucialinensuringlocalcommunitiesreceivesocioeconomicbenefits,especiallyincaseswherecommunityinvolvementinenergydevelopmentprojectshasbeenlacking.Unfortunately,thevastmajorityofcountriesdonothavespecificgeothermal-relatedsocioeconomicpoliciesandregulations.Belowareseveralexamplesofwheretheyexist:•Indonesia3hasaregulationmandatingallinvestorstoimplementcorporatesocialresponsibility(CSR)arrangements.Forthegeothermalsector,regulationsmandateCSRforelectricitygeneration,requiringallgeothermalbusinesspermitholderstoarrangelocalcommunitydevelopmentandempowermentprogramsthroughtheregionalgovernment,withcostsallocatedinthepermitholders’annualworkprogramandbudget(Purwantoetal.2021).•Kenya4hasproposedtwoclausesforsharingbenefitsfromtheexploitationofenergyresources.Thefirstclausestatesthatthe“revenueraisednationallyshallbesharedequitablyamongvariouslevelsofgovernment.”Thesecondclauserequiresthatinvestmentsinpropertyshallbenefitlocalcommunitiesandtheireconomies.Thesebenefitsincludeprofits,training,employment,technologytransfer,andCSRprograms.However,aclearframeworkforbenefitsharingmechanismsremainsachallenge(MinistryofEnergy2018).BothKenGenandtheGeothermalDevelopmentCompany(seebox4.3andalsobox4.7),bothactiveingeothermalgeneration,havemultipleprogramsbenefitingcommunities.3Article15ofInvestmentLawNo.25of2007mandatesallinvestorstoimplementcorporatesocialresponsibility(CSR).Forthegeothermalsector,CSRismandatedbyGeothermalLawNo.21of2014andArticle97ofGovernmentRegulationNo.7of2017.4UnderKenya’sNationalEnergyPolicy,2018,tofulfillConstitutionalrights,twoclausesareproposedforsharingbenefits.ThefirstclauseistofulfillArticle202(1)oftheConstitution,whichstatesthat“revenueraisednationallyshallbesharedequitablyamongvariouslevelsofgovernment.”ThesecondclauseistofulfillArticle66(2),whichrequiresthatinvestmentsinpropertyshallbenefitlocalcommunitiesandtheireconomies.68FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesFIGURE4.2BENEFITSHARINGACTIVITIESALONGTHEVALUECHAINLegislationEnablingFeasibility,ProjectdesignConstruction,OperationandDecommissioningandplanninginfrastructureﬁnancing,andandprocurementtransport,andmaintenanceandrecyclinginvestmentsprojecttenderingcommissioningofinputsGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS•Evidencegeneration•Evidencegeneration•Designbeneﬁt•Implementbeneﬁtsharingactivities(infrastructureprovision,•Informationcreationandprovisionsharing(CSR)capacitybuilding,revenuesharing)•Initialengagementanddialogue/swith•Informationcreationstrategies/plan(inandprovisioncoordinationand/or•Continuouscommunityengagementandwithlocalgovernmentsstakeholdersincludinglocalcommunitiesdiscussionwithlocal(e.g.,toursonsite,one-on-ones,events)•Identiﬁcationofbeneﬁtsharingmechanisms•Detailedengage-government,andmentanddialogue/sotherstakeholders)•Continuousprovisionofupdatedinformation(e.g.,directlywith•Policyand•Assessmentsforwithstakeholders,communities,boardsinlocalgovernmentoﬃces/projectsites)regulationspotentialinvestmentsincludinglocal•Informationprovisioninsocioeconomiccommunities•Increasepartnershipswithotherstakeholderstomaximizeactivities•Procurementforsocioeconomicbeneﬁts(e.g.,marketreachforenterprise•Detaileddesignofbeneﬁtsharingdevelopmentproducts,educationalinstitutesforlong-termtrainingsbeneﬁtsharingprogrammaticandeducationopportunitiestolocalcommunitymembersincludingmechanismsactivitiesyouth,womenandgirls)•Procurementand•Continuous•Monitorcontinuouslyand(re)evaluate.Readjuststrategiesandpilotbeneﬁtsharingcommunityplans,budgets.activitiesengagementSource:Originalcompilation,2023.Note:CSR=corporatesocialresponsibility.69•Türkiyerequiresalllicenseestopaythestateayearlyfeecorrespondingto1percentoftheirincome.Twentypercentofthisfeeisthenallocatedtothebudgetofthelocalmunicipalitywhereaprojectsiteislocated(BBA2018).Althoughnotcommon,opportunitiesexistforgovernmentstobringaboutthedesiredsocioeconomicimpactswithinlocalcommunitiesthroughtheirprojectprocurementprocessorprojectnegotiations.Governmentscouldeithermandatespecificbenefitsharingactionsorrewardpotentialdevelopersthatcommittocertaindesiredoutcomeswithadditionalpointsintheprojectselectionprocess.TheWorldBankhandbookASurePathtoSustainableRenewableEnergy:MaximizingtheSocioeconomicBenefitsTriggeredbyRenewables(WorldBank2022b)outlinestheseapproachesandsuccessfulcasesfromotherindustries,includingwindandsolarPV.Someexamplesmightincludesettingarequirementforapercentageofrevenuetobedirectedtocommunitydevelopmentactivities,orsettingatargetforlocalemploymentopportunities.UnderstandingcommunityneedsAttheinitialstageofageothermalprogramorproject’sdevelopment,evidenceisgatheredthroughsocioeconomicstudiesandsocialmapping(seebox4.4).Diverseparticipationofcommunitystakeholdersisessentialatthisstage,includingofwomenanddisadvantagedgroups,community-basedorganizations,localgovernments,internationalandnationalnot-for-profitorganizations,powerindustries,anddevelopmentpartners.Thesestudiesofteninclude,forexample,examiningadministrativeboundaries,landusesandownership,population,employmentdata,infrastructureandservices,culturalandhistoricalsitesandcustoms,energyuse,knowledgeaboutandviewsongeothermal,potentialforentrepreneurship,andgenderandsocialequity(Karytsasetal.2019;WorldBankmarketsounding2022).Thesestudieshelpgovernmentsanddevelopersunderstandexactlyhowaprojectwillaffectlivelihoods,culture,andtheenvironment.Theyalsopresentanopportunitytoidentifysynergiesthatmaybeleveragedfortheimplementationoftheprioritiesidentifiedinregionalandlocaldevelopmentplans.70FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesBOX4.3KENYA:INTEGRATINGGENDEREQUALITYANDSOCIALINCLUSIONPROVISIONSWITHINNATIONALPOLICIESGeothermalpoliciesandregulationsoftenlackgenderequalityandsocialinclusionprovisions,althoughattimes,countries’constitutionalormacrolegalframeworksmakeitpossibletoprovidebenefitsattheprojectlevel.Forexample,Kenya’sConstitutionaspirestoimproveinclusioninallpubliccommitteesanddecision-makingbodies,andmandatesthat30percentofthegovernment’sprocurementbudgetbededicatedtowomen,youth,andpeoplewithdisabilities(Lieuetal.2020).TheKenyaElectricityGeneratingCompanyisfulfillingtheseconstitutionalprovisionsthroughhumanresourceequitypolicies.Tenpercentofjobsareprovidedtolocalcommunities,and30percentofboardsandhighermanagementpositionsareheldbywomen.Thecompany’s“PinkEnergyInitiative”alsoaimstocreatechangewithintheorganizationandwithintheenergysector,encouragingwomenbybuildingcapacityandnurturingthemtobebrandambassadorsofgenderequality.Equityconsiderationsarealsoincludedinprojectswithlocalcommunities.Forexample,anequalnumberofboysandgirls(50:50ratio)receivestudentscholarships.Source:WorldBankmarketsounding2022;KenGen2022.BOX4.4INDONESIA:SOCIALMAPPINGONMOUNTUNGARANAspartofthepreparationforaprojectinthegeothermaldevelopmentareaofMountUngaran,whosepotentialwasestimatedat40–50megawatts,asocialmappingprojectcovering26villageswasconducted.Thestudyfoundthat17percentofcommunitymembersandnongovernmentalorganizationsopposedthedevelopmentbecausetheybelieveditposedathreattoculturalheritageandthelocalenvironment.Meanwhile,thestudyhighlightedthattheruralcommunitieswerereligiousandthatreligiousinstitutionshadastronginfluenceinthesurroundingcommunities.Italsoshowedthatvillageheads,women,andyouthleadershadastronginfluenceoverdevelopmentplansintheregion.Basedonthesefindings,thesurveyconcludedthatknowledgeandacceptanceofprojectbenefitscouldbeincreasedifinformationcouldbechanneledthroughtheseinfluentialcommunitymembers.Source:SetiyonoB.etal.2019GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS71Inaddition,dialoguecanhelpestablishtrustandaddressemergingissues,enablingprojectstobenefitfrommutualagreementandacceptance.Criticaltothisprocessistransparencyofinformationandactions(Karytsasetal.2019;WorldBankmarketsounding2022).InSt.Lucia,forexample,one-on-oneengagementsandongoingcommunityconsultationsareprovingtobeextremelyimportantinbuildingtrust(seebox4.5).BOX4.5ST.LUCIA:PROVIDINGTRANSPARENTINFORMATION,ANDBUILDINGTRUSTINPLACEOFLOCALRESISTANCESt.Luciahasalonghistoryofutilizinggeothermalresourcesfortourism,anditisintheexplorationphasetoexamineitselectricitygenerationpotential.Thegovernmentsecuredfundingin2021todrilluptofourtestwellsbasedonascopingstudyfinalizedunderthe2017/18GeothermalResourceDevelopmentProject.Theprojectwasinitiatedwithgoodintentions,anditsoughttoconsultandengagelandownerswhowouldbedirectlyimpactedbytheproject.Unfortunately,someofthelandownerswereinformedtoolate,andonlybecameawareoftheprojectplanswhentheysawtheirpropertiesoutlinedonamapdrawnforconsultationpurposes.Theselandownerswerecaughtoffguard.Theteamofanewproject(theRenewableEnergySectorDevelopmentProject),whichbecameeffectivein2022,hassincetakenovertheprojectandreportedthattheyarestillseeingresidualeffectsofthiscommunicationerror.Toregainthecommunity’strust,theprojectteamhasoptedtoproceedwithone-on-oneconsultationsratherthanlargegroupmeetings.Theyreportthatthoseaffectedfeelagreatersenseofbeingvaluedandappreciatedwhendiscussionsareheldintheirownhomes.Centraltoresolvingtheissueswastosimplylistentothecommunityanddocumenttheirconcerns.Ithasalsoprovedcriticaltobuildknowledgeaboutgeothermalenergyandbetransparentwithallfindingsandinformation.Theteamisintheprocessofcontractinganexperiencedpublicrelationsfirmtosupportcommunityengagementandimproveperceptionsaroundgeothermalprojectdevelopmentandoperation.Theteamhascommittedtosharingallfindingsfromconsultationsanddrillingintheformofpublicdocumentsandhasalsobeguntopublishaquarterlystakeholderbulletintoensurethatthecommunityfeelsheardandrepresented.Duringconsultations,theteamalsobegantodiscussthetypesofbenefitsthatthecommunitymightdesire,fromashareofroyaltiestoemploymentopportunities,tocascadingthedirectusesofthegeothermalenergyforlocalbusinessopportunities.Source:WorldBankmarketsounding2022.72FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesDevelopersgatherinformationandengagecommunitiesviaconsultations.Theconsultationsmaybeinagroupformatormaybeone-on-onedependinguponthelocalculture,thecontext,andtheuniqueneedsofthosebeingconsulted.Theliteraturereviewandinterviewsconductedforthisreporthighlightseveralcommonapproachestocommunityengagementandconsultation:•Baselinestudiesareconductedattheonsetofprojectdevelopmenttoaidintrackingtheimpactsofbenefitsharingmechanisms.Afterimplementation,baselinedatahelptofocusexpenditureonsuccessfulactivities,andamendthosethatdidnotgoasplanned.•Opportunitiesforbenefitsharingareidentifiedwiththeinputoflocalcommunities.Ascopingactivitynecessarilyincludesconsultationswithawiderangeofstakeholders.•Localinputiscriticaltothedesignofagender-sensitivebenefitsharingplanthatiswithintheboundariesoflocalcultureandnorms.Forexample,willlocalcommunitiesaccepttheideaofwomenemployedincertainroles?InEthiopia,forexample,ageothermaldeveloperfacedchallengeswhenitdidnotarrangeforwomenemployeestotravelseparatefrommen.•Effortsaremadetoensurethatbenefitsarespreadequitablyacrosscommunities,andthatprojectswiththegreatestpotentialtocreatelong-termandsustainedbenefitsareselected.Forexample,somedevelopersprioritizeactivitiesthatdirectlybenefitwomenanddisadvantagedpopulations.•Experiencesfromothergeothermalprojectsareutilizedtohelpavoidmisstepsandimplementbestpractices.Localcommunitiescanbenefitfromknowledgeandinformationsharingwithothercommunitiesthathavealreadyseenthedevelopmentofgeothermalpower.Asuccessfulexampleisoutlinedinbox4.6.Dialoguebetweendevelopersandstakeholdersmustbesustainedacrossprojectstages,evenafteracommunityhasgivenconsentforaproject(Barichetal.2022;WorldBankmarketsounding2022).Long,concerted,andrepeateddialoguebetweendevelopersandlocalactors(communities,localgovernments)leadstoincreasedconsensualsupportofprojectsandensuresthattheyare“locallyanchored”—asopposedto“unbound,”anddevelopedduetofavorableeconomicandnationalpoliticalcontexts(Chavotetal.2018).Forexample,somegeothermalprojectsinitiatedinearly2010intheAlsaceregionofFrancedidnotfeaturelocaldialogue,andfacedstrongopposition(Chavotetal.2018).“Youcanmakeahugeinvestmentindrilling,butwithoutcommunitysupport,itisworthnothing.”PascalManan,GeothermalDevelopmentCompany,KenyaGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS73BOX4.6KENYAANDNEWZEALAND:SHARINGBESTPRACTICESACROSSNATIONALLINESCountrieswithdifferinglevelsofexperienceingeothermaldevelopmentcanbenefitfromoneanother’sexperiencesinprojectmanagement.Arecent,successfulexampleofthiscentersonthelessonsincommunityengagementsharedbetweenKenyaandNewZealand.RecognizingtheopportunityforothercountriestolearnfromNewZealand’ssuccessesincommunityengagementandrespectforsacredgeothermalsites,PowerAfrica,theUnitedStatesEnergyAssociation,andtheGeothermalEnergyAssociationinitiatedapartnershipbetweenKenGen(Kenya’sstate-ownedutility),aNewZealand–basedcompany(ContactEnergy),andtwotrusts(theTauharaNorthNo.2TrustandtheNgatiTahuTribalLandsTrust).Fourexchangemissionstookplace,includingvisitsbyrepresentativesfromNewZealandandKenyatogeothermalsitesinbothcountriestolearnandexchangeideas.Bestpracticesincommunityengagementandpartnershipmodelswerediscussed.DrawingonthelessonslearnedfromNewZealand,KenGendevelopedanewstate-of-the-artcommunityengagementprogram.Further,theNewZealandcounterpartssupportedMaasaicommunityleadersindevelopingstrategicvisioning,includingcommercialventuresandsocialdevelopmentgoals.Sources:WorldBankmarketsounding2022:USEA2022.74FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesInsuccessfulprojects,developersbothinformandengagecommunities,asdetailedintable4.1.TABLE4.1KeywaysthatdeveloperscaninformandengagelocalcommunitiesINFORMENGAGEPerformsocialmappingtoidentifysocialandEngagecommunityleadersandlocalgovernmenteconomicconditionspriortosharinginformation.officialswhomaybelong-termengagementpartnersintheproject.SetupateamforworkingwithProvideinformationontheproject,forexample,municipalitiesandcommunitiesonallaspectsofnotifyingcommunitiesthattheymayexperienceprojectdevelopmentandoperation.vibrationsandinducedseismicity.GaininsightsaboutlocalcommunityneedsandinviteSetupboothsanddisplaypostersatlocalfestivals,communitymemberstobringtheirconcernsandprovideprojectinformationandexplanationsonquestionsforward.howmoneywouldbespentontheproject;discussemergingissueswiththecommunity.FormaStrategicStakeholderCoordinationCommitteetoeffectivelydesigntheconsultationandengagementprocessandavoidduplicationofefforts.Postadvertisementsinvillagesatvisiblelocations,Afemalecommunityliaisonofficer,whocanenterparticularlywherewomenmayhavelittleexposuretohouseholdsandtalktowomenthere,mayconductnewsthroughotherchannels.door-to-doorconsultationsbeforegeneralmeetingsareconvened.Conductinformationcampaignsinthelocalcommunitieswheretheprojectmaybeimplemented.Conductfocusgroupdiscussionsandmulti-stakeholderconsultations.Source:WorldBankmarketsoundings2021and2022.DesigningabenefitsharingstrategyFIGURE4.3Percentageofdeveloperscreatingacommunitydevelopmentplan13%No87%YesSource:WorldBanksurvey2023.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS75Followingcommunityconsultations,andevidencegeneration,developersoftendesignamultiyearstrategytoengagewithlocalcommunities.Thisbecomesacriticalcomponentofadeveloper’sCSRoperations.Suchaplancanbegivendifferentnames:abenefitsharingplan(ashighlightedinthisreport),communitydevelopmentplan,oraCSRplan,amongothers.Ofthe15developerssurveyedforthisreport,13hadsuchaplaninplace(figure4.3).Theprocessofdesigningabenefitsharingplanorstrategybeginswithdetailedassessmentsandinteractionswithawiderangeofstakeholders.Communitymembersmaybesurveyedasafollow-uptotheseinitialconsultations,tofurtherunderstandingoftheneedsandwantsofcommunities.Suchassessmentsallowdeveloperstoidentifyprioritiesthatmatchthebudgetssetforbenefitsharingactivities.Forexample,inEthiopia,onecompanydevelopedalocalinvestmentguideline,includingathree-yearstrategicimplementationplan,asanoutputofsocioeconomicbaselineassessmentsandlocalconsultations.Theguidelineincludednationalandregionaldevelopmenttargetsforinvestmentsineducation,health(includingwater),agriculture,andenterprisedevelopment.Businessopportunitieswereidentified,andgapshighlighted(WorldBankmarketsounding2022).Developershavedifferentapproachestodesigningstrategies,ascanbeseenintheexamplesgivenbelow:•InKenya,theGeothermalDevelopmentCompanyidentifiesandcollatesallpriorities,projects,materials,andresourcestocomeupwithacommunityactionplan,whichisthenusedtodesignafive-yearstrategicplan.•InIndonesia,SarulladevelopedanIntegratedSocialPrograminthreephases:—Shortterm(twoyears),coveringtheconstructionphase,whenthefocuswasonphysicalassistance,andbudgetwaslimited.Theactivitiesincludededucationassistanceforstudents,improvementofschoolfacilities,traininginagriculturalintensification,andsponsorshipofculturalevents,amongothers.—Mediumterm(fiveyears),coveringtheearlyoperationphase,whichwouldseeagradualincreaseofbudget,andanincreasedfocusoncapacitydevelopmentandaselectionprocessforbeneficiarieswithcommitment-relatedrequirementsfromprogramparticipants.—Longterm(beyondfiveyears)tocoverawiderareaandcreatemoreindependentandself-helpprogramsforcommunities.Plansincludedintensivetraininginagricultureandproductiveactivities,suchasfishfarmingandanimalhusbandry(SarullaOperationsLtd.2022;aninternaldocumentsharedforthepurposeofthestudy).76FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunities•InIndonesia,PTGeoDipaEnergi(GDE)conductedsocialmappingandfieldanalysistodevelopthecompany’sCommunityDevelopmentProgram,whichfeaturesfourstrategicareasoffocus:—GDECares,forcommunicationwithrelevantpartiesaboutdifferentactivitiesandprograms(e.g.,scholarshipsandcounselinginschools),withafocusonwomenandvulnerablegroups;—GDEGreen,forenvironment-relatedprograms;—GDECommunityEmpowerment,whichfocusesonbusinesssupport,includinginthemanagementofcoffeeandpalmtreesandgeotourism,amongothers;and—GDECommunityServices,whichfocusesonlocalinfrastructureandsponsorships.Designingastrategyisaniterativeprocessoflearning,ascanbeseenfromtheexampleoftheEnergyDevelopmentCorporation(EDC)inthePhilippines(seebox4.7).Photo:PolarisParticipantinagriculturaleducationprogram.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS77BOX4.7PHILIPPINES:FROMRELIANCETOEMPOWERMENT—THEEVOLUTIONOFACORPORATESOCIALRESPONSIBILITYSTRATEGY“Ourphilosophyforcommunityengagementhasshifteddramatically,fromatransactionalonebasedonphilanthropytoatransformativeonebasedonempowerment.Wearenolongeractinginresponse,wearestrategic.”—CSRLead,EnergyDevelopmentCorporationTheEnergyDevelopmentCorporation(EDC)isthelargestgeothermalproducerinthePhilippines,andthethirdlargestintheworld.Thecompanyhasdecadesofexperienceinprojectdevelopmentandoperation.Sinceitsfoundingin1976,EDChasdevelopedandinstalled1,189.3megawattsofgeothermalpower.Whilecorporatesocialresponsibility(CSR)hasalwaysbeenacentralcomponentofEDC’soperations,thecompany’sapproachhasevolvedovertime.Initially,thecompanysupportedabroadmandateofactivities,includinginhealth,infrastructure,andeducation.CSRactivitiesfocusedonwhatcouldbegiventocommunities,ultimatelyfosteringagrowingrelianceonthecompany.TheCSRteamsawacriticalneedtoshiftfrombuildingreliancethroughtransactionalhandoutstocapacitybuilding,whichwouldleadtogreaterindependenceandempowerment.Thisentailedanoverhaulofthecompany’sCSRphilosophy,andashiftinapproach,fromonethatwasphilanthropictoonethatistransformational.78FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesBOX.4.7(CONTINUED)Insteadofbeingresponsiveonlytotheshort-termrequestsofcommunities,thecompanybegancreatinglong-termstrategiesthatprioritizedamissiontoprotectnaturalresources,whilesimultaneouslycontributingtocommunities’livelihoodsandenablingthemtobreakoutofintergenerationalpoverty.ThefocusofCSRactivitieswasnarrowedto:(1)theenvironment;(2)education;and(3)socialenterprisedevelopment.Insteadofprovidinghandouts,thecompanynowprovidescommunitieswiththetoolsandcapacitytobetterthemselves.Thecompany’shugelysuccessfulenvironmentalconservationprogramcanbetakenasanexample.Todate,ithasplantedover6milliontreesandrestoredover10,000hectaresofland.However,theprogram’simpactextendsbeyondenvironmentalimprovement.Communitymembershavebeenatthecenterofthiswork;manyhavebecomesocialentrepreneurswhoraiseandselltreeseedlings,produceforest-friendlycoffee,andleadecotourismadventures.EDChassupportedcommunitiestoorganizeinto121peoples’organizations,threeofwhichhavebeenformalizedascooperatives.Eachorganizationisprovidedwithbusinesstraining,forexample,infinancialmanagementandmarketing,supportedtosecuretherequiredoperatingpermits,andalsogiventheinitialcapitalrequiredtocoverstart-upexpenses.Source:EDCwebsite(accessedDecember2022);EDC2022.Photo:BaslayHighlandBrewCoffee,thePhilippines.ImplementingappropriatebenefitsharingmechanismsAbenefitsharingstrategymayentailavarietyofmechanismsandimplementationsteps.Asmentionedearlier,benefitsharingisofthreemaintypes:improvementsoradditionstoservicesandinfrastructure,skillandcapabilityenhancement,andrevenue/ownershipsharingarrangements.Examplesofeachtypearegivenbelow.ImprovementsoradditionstoservicesandinfrastructureThistypeofbenefitiscommonlyprovidedbydevelopers.Forexample,almostalldeveloperswillcontributetocommunityinfrastructurebybuildingroads,whichareoftenalsorequiredforsiteaccess.Asurveyforthisstudyshowedthatof15developers,13(87percent)developedlocalinfrastructure(figure4.4).Examplesincludeschools,plantsforprocessinglocalagriculturalproducts,wellsandwaterdistributionsystems,sportsareas,roadsandbridges,traditionalmarkets,renovationstoplacesofworship,andhealthclinics.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS79FIGURE4.4Percentageofdeveloperssupportinglocalinfrastructuredevelopment13%No87%YesSource:WorldBanksurvey2023.Theprovisionoflocalinfrastructuremayattimesmakecommunitiesdependentondevelopers.AscanbeseenfromtheexampleofEDCinthePhilippines(box4.6),theirfocusshiftedfromshort-termmultipleprovisionofinfrastructureservicestolonger-termskilldevelopmentandrevenuegenerationprograms.Whileprojectdevelopersoftenconstructcommunityinfrastructurethatistobeoperationalinthelongterm(e.g.,healthclinics,schoolbuildings),fundingforfutureoperationsormaintenancemaybelacking.Ifsuchinfrastructureistooffersustainedbenefitstothelocalpopulation,fundsmayneedtobesetasideinescrowaccounts,infinancingagreements,orotherwiseguaranteed,possiblythroughpublicandprivatecooperation(HoltzandHeitzig2021).SkillandcapabilityenhancementEducationandavarietyoftrainingprogramsarekeytoensuringthatlocalcommunitymemberscaneasilyaccessthenewjobopportunitiesbroughtbyageothermalproject.Trainingmayfocusonskillsrelevanttogeothermal,oranothersector(e.g.,trainingfarmerstoimprovecropyield).Table4.2outlinesthetrainingpracticesofthedeveloperssurveyedforthisreport.TABLE4.2Skillandcapacityenhancementefforts,byshareofdeveloperssurveyedAIMOFEFFORTSHAREOFDEVELOPERS(%)73(11of15developerssurveyed)Toprepareforgeothermalemploymentopportunities53(8of15developerssurveyed)Toimproveperformanceinotherareas(e.g.,literacy,computeruse,agriculturalpractices)80(12of15developerssurveyed)EnterprisedevelopmentSource:WorldBanksurvey2023.80FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesDetailedexamplesofdevelopers’skillbuildingactivitiesareprovidedintable4.3.TABLE4.3Specificexamplesofdevelopers’trainingandskillbuildingactivitiesAIMOFACTIVITYEXAMPLESFROMDEVELOPERSToprepareforgeothermalemployment•Philippines:TheEnergyDevelopmentCorporation(EDC)throughtheopportunitiesKeitechEducationalFoundationInc.offerstechnicalandvocationaltraininginconstruction,metalworking,engineering,andotherskillstoout-of-schoolToimproveperformanceyouth.Thistrainingmeetstherequirementsforpossibleemploymentinainotherareas(e.g.,varietyofgeothermaloperations.literacy,computeruse,agriculturalpractices)•CostaRica:TheInstitutoCostarricensedeElectricidadcoordinatestrainingwithstateagenciesprimarilyforconstruction-relatedwork.Enterprisedevelopment•EnerchangeTürkiyeisworkingwithoneoftheleadinggeothermalcompaniesinTürkiyetoruntrainingprogramsforlocalcommunitiesintheAegeanregion,withtheaimofscalingthemtobenationwide.•Indonesia:PTGeoDipaEnergiconductedafoodprocessingandmarketingtrainingprogramin2021.TheprogramtrainedsixgroupsfromsixvillagesandassistedinthevaluechainofthefruitCaricapapaya.•Indonesia:SupremeEnergyGroupofCompaniesconductsvarioustrainingprogramsthatsuitlocalcommunities’needsandimprovetheirlivelihoods,knowledge,andskills.ExamplesubjectsincludeconversationalEnglish,coffeefarmingandmarketing,chiliandriceplanting,andembroidery.•Indonesia:PTPertaminaGeothermalEnergyenhancesthequalityoftheeducationofferedinprojectsareasthroughitsSmartTogetherprogram,GreenSchool,TraininginManagementofWasteBanks,GeothermalZones,ManagementGoestoSchool,andGeothermalEducationproject.•Philippines:EDCsupports120hostcommunitiesinorganizationalstrengtheningandmanagement,financialliteracy,andsocialenterprisedevelopment;andofferstechnicaltraininginforestrestoration,biodiversityconservation,andforestprotection.Italsolinkscommunitieswithdevelopmentpartners.•Nicaragua:PolarisRenewableEnergysupportseducationalopportunitiesforchildren,youth,andadults,includingwomen.Itprovidescomputertrainingforteachers,andprovidingtabletsandcomputerstoschools.Thecompanyalsosupportsfarmers’technicalcapacity,includinginproductcommercialization.•Indonesia:Aspartofacommunitydevelopmentprogram,PTGeoDipaEnergisupportedvillage-ownedenterprises(BUMDes),includingthroughlessonsharing.•Indonesia:PTPertaminaGeothermalEnergysupportslocalcommunitiesinintegratedfarmingandcoffeebusinessdevelopment,innovationinpotatofarming,theformationofpalmsugargroups,brandstrengthening,tourguidetraining,andtheestablishmentofcommunityeconomiczones,amongothers.•Philippines:EDCissupportingfinanciallyviableandenvironmentallyfriendlyenterprisestogenerateshort-andlong-termrevenuestreamsforpartnercommunities.Examplesincludemangroveecotourismandconservation,coffeeandcacaoproduction,handicraftdevelopment,andagriculturalproductionandtrade.•Nicaragua:PolarisRenewableEnergysupportsentrepreneurshipinserviceareassuchasfood,andsuccessfullysupportedcommunitiestomanagea$1millionwaterprojectontheirown.Source:WorldBanksurvey2023.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS81InKenya,entrepreneurshipandself-employmentskillsarethefociofayouthempowermentprogram.Theprogram’srationaleisthatlong-termjobprospectsaredwarfedbygrowingdemand.Asbox4.8explains,supportingyoungpeopletocreatenewbusinesseswillbringabroadrangeofbenefits.Photo:ComputerliteracyprograminNicaraguafundedbyPolarisRenewableEnergy82FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesBOX4.8KENYA:CHAMPIONINGYOUTHEMPOWERMENTANDEMPLOYMENTTheGeothermalDevelopmentCompany(GDC)isagovernment-ownedentitytaskedwithdevelopingKenya’sgeothermalresources.GDChasanoperationalcapacityof320megawatts(MW)andisplanninganadditional1,065MWby2030.GDCworkscloselywithcommunitiestoensurethattheybenefitfromgeothermalprojectsandthattheirsituationisbetterthanwhatitwasbeforedevelopment.WhileGDCprioritizeslocalemployment,realistically,thereareneverenoughjobstomeetdemand.Tosupportlocalcommunitymembersinbuildingtheirownbusinessesanddevelopingtheirskills,GDChasestablishedacollaborationwithvariousstateentities,includingtheDepartmentofCooperativesandtheStateDepartmentofYouthAffairs.Throughtheinitiative,communitymemberscanaccessfundstopurchaseequipment,rangingfromvendingmachinestopowertools,aswellastocoverthecostsofentrepreneurshiptraining.Skillstrainingfocusesonmechanizedequipment,suchasaconcretemixeroraconcretepump.PaticipantsintheinitiativesetuptheirownOrganizedYouthInvestmentGroups,whichtheGDClinkswithcontractorsrequiringunskilledandsemiskilledlabor.Inessence,thisstructurehasfunctionedasanemploymentbureauforshort-term,casuallabor.Throughthisprogram,300youthhavebeentrained.SixoftheOrganizedYouthInvestmentGroupsarewomen-onlyorganizations.Whencasualemploymentopportunitiesceaseorareinlowdemand,thehopeisthatcommunitymemberscanbecomeself-reliantthroughentrepreneurialactivities.Source:WorldBankmarketsounding2022;GDC2019,2022.Revenue/ownershipsharingarrangementsWhileCSRprogramsarecommonacrossallmajordevelopers,somecompaniesgobeyondthestatusquoinsharingfinancialbenefitswiththecommunitiesaffectedbygeothermalplantdevelopmentandoperation.Revenueorownershipsharingisnotcompensatory,andisalong-termbenefitsharingarrangement.Thearrangementmayincludepaymentsinto,orequityshareholdingby,communityentities,suchascommunitytrusts,cooperatives,enterprises,ornon-profitorganisations.Itmayalsoassistthedevelopmentofsmallbusinessesinthelocalareathroughpaymentsviafundingchannelsandprograms.Ofthe15developerssurveyed,only5(33percent)hadsetupsomeformofrevenuesharingarrangement(Figure4.5).GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS83FIGURE4.5Percentageofdevelopersthatsharerevenuewithcommunities67%No33%YesSource:WorldBanksurvey2023.Table4.4outlinessomeoftheirapproaches,eachwithitsownsetofbenefitsandchallenges.Creatingacommunity-controlledtrust,forexample,canensurethatfundsarecontrolleddemocraticallyandutilizedinthecommunities’bestinterest.Conversely,suchanapproachcanalsobeafflictedbycorruption,mismanagement,and,undercertaincircumstances,resultincompetitionwithneighboringcommunitiesthatarenotbenefitinginthesameway.Photo:Geothermalpowerplant84FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesTABLE4.4ExamplesofrevenuesharingapproachesAPPROACHEXAMPLEEquitystakeinTheMāoribusinessentityTauharaNorthNo.2Trusthasa35percentequitystakeintheprojectsNgaAwaPuruaPowerStation(140megawatts[MW])anda50percentequitystakeintheNgatamariki(84MW)andRotokawa(34.5MW)developmentsinNewZealand.RevenuePercentagefromthesecommercialoperations,estimatedat$NZ6millionperyear,isdirectedtoofrevenuegrantsandprogramstosupportMāoripeople(Blairn.d.).directedtoacommunity-InKenya,theEnergyAct2019repealedtheGeothermalResourcesAct1982anddetailedcontrolledroyaltyrates.Aspertheact,alicenseeneedstopayaroyaltyontheextractedgeothermalentity(trustorresources’valueatthewellhead.Thisroyaltyisnotlessthan1percentandnotmorethancooperative)2.5percentoftheenergyproducedduringthefirst10yearsofproduction,and2percenttonotmorethan5percentannuallyafterthefirst10-yearperiod.RoyaltiesaretobePercentageapportionedtothreeparties:thenationalgovernment(75percent),countygovernmentofcompany’s(20percent),andlocalcommunity(5percent).Thecommunity’sshareispayablethroughannualbudgetatrustfundmanagedbyaboardoftrusteesestablishedbythelocalcommunityindirectedtoaaccordancewiththeregulationsundertheEnergyAct2019(RepublicofKenya2019).foundationoranonprofitLaGEO,inElSalvadorhasestablishedanonprofitfoundationcalledFundaGeotosupportcommunitydevelopmentactivities.AlthoughFundaGeoisaseparateentity,LaGEOplaysPercentagearoleindirectingthefoundation’sstrategyandprogramming.LaGEOhascommittedtoofrevenuecontribute20percentofthecompanybudgettothefoundationonanannualbasis.Thesharedwithbudgetcanbeadjustedduringtheyearwiththecompanyboardmembers’approvalifthelocalmorefundsarerequiredtosupportthecommunities(WorldBankmarketsounding2022).governmentInIndonesia,forallgeothermalprojectswithexistingunits,thecorrespondingproducersarerequiredbylawtopayaproductionbonustothegovernmentoftheregionwhereaprojectislocated.Theyalsoneedtopayanexplorationlevyforfieldsintheexplorationstage.Theproductionbonusiscalculatedbasedonthesaleofgeothermalsteamand/ortheelectricitygeneratedfromgeothermalenergy.Producersarerequiredtopayeither1percentofthegrossincomefromthesaleofgeothermalsteamor0.5percentofthegrossincomegeneratedfromthesaleofelectricalpower.ThepaymentofproductionbonuseshasbeendemonstratedtohaveapositivecorrelationwithariseinGDP.InthePhilippines,theEnergyDevelopmentCorporationhasarevenuesharingagreementwiththelocalgovernmentunitshostingitsgeothermalfacilities.Theagreementisequivalentto1centavoperkilowatt-hour(0.01/kWh)ofthetotalelectricitysalesandisfromtheaccruedmoniesasprescribedundertheEnergyRegulations(ER)No.1-94.InadditiontotheER1-94,theEnergyDevelopmentCorporationisalsosharingaroyaltywiththeManoboApaoDescendantsAncestralDomainofMt.Apotoallowthecompanytocontinueoperatingtwogeothermalplantsinthisancestraldomain(WorldBankmarketsounding2022).Asseeninsomeprojects,allowingcommunitymemberstotakeadebtorequitystakeinaprojectcanboostsocialacceptance.Box4.9describesaprojectofEUHorizon2020,calledCROWDTHERMAL.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS85BOX4.9EUROPEANUNION:SPURRINGCOMMUNITYINVESTMENTINGEOTHERMALPROJECTSCROWDTHERMALisanEU-fundedprojectthatwasestablishedtoempowersocietytopartakein,andfinanciallybenefitfrom,thedevelopmentofgeothermalprojects.Theprojecthasdevelopedalternativefinancingschemestoallowcommunitymemberstobecomeinvestorsingeothermalprojects.Ithasalsodevelopedanumberofcommunityengagementtoolstoensurethatproposedprojectsgetcommunities’acceptanceandareabletoprogresswithoutdelayorlitigation.AmajordeliverableoftheprojectisaWeb-basedtooldesignedtosupportnotonlycommunitymembersbutalsodevelopersandlocalauthoritiestoworkthroughquestionssurroundingsocialacceptance,communityengagement,alternativefinancing,andriskmitigation.ThetoolcanbeaccessedonlinethroughtheCROWDTHERMALwebsite.AfulllistofprojectdeliverablesisprovidedintableB4.9.1.TABLEB4.9.1OverviewofCROWDTHERMALservicesandtoolsSource:WorldBankmarketsounding2022;tableextractedfromCROWDTHERMAL(2022).Note:FAQ=frequentlyaskedquestion.86FOUR.Ensuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunitiesMonitoringandpost-projectsupporttoensurebenefitsMonitoringtheprogressofbenefitsharingmechanismsisessential.Economicandsocialbenefitsmaybemonitoredusingavarietyofindicatorsandmeasurementmethods.TheWorldBankhandbook,MaximizingtheSocioeconomicBenefitsTriggeredbyRenewables,offersanannexofsampleindicatorsthatcouldbeutilizedtomonitorandevaluatethesuccessoflocaldevelopmentefforts.Economicimpactstendtobetheeasiesttomonitorandevaluate.Theprocessrequireslittlequalitativedatathatcanbegatheredthroughsurveys,modelingexercises,andofficialstatistics,suchascensuses.Socialbenefits,whileequallyimportant,canbemoredifficulttomeasure,andquestionsofattritionmaybegreater.Measuringsocialbenefitsrequiresamoreinteractiveandparticipatoryapproach.Datacollectionmethodsincludeone-on-oneinterviews,focusgroupdiscussions,andsocialmapping.Monitoringisalsoimportantfordeveloperstoknowwhethertheyareexecutingtheirplanseffectivelyandiftheircommitmentsandbenefitsprogramsareworkingasintended.Box4.10highlightsexampleoutcomes.Monitoringhelpsdevelopersidentifyapproachestosustain,andalsohelpsthemvisualizeanexitplan,includingthehandoverofassetstocommunities.Tomaximizesocioeconomicbenefits,itisvitalthatopportunitiesforlong-termimpactareassessedcarefully.BOX4.10PHILIPPINESANDETHIOPIA:OUTCOMESOFPROGRAMMONITORINGANDEVALUATIONInthePhilippines,adeveloperrefocuseditscorporatesocialresponsibilitystrategyoneducation(seebox4.6)afterconductingacommunitysurveythataskedwhichprogramshadthemostimpactandwerethemostmeaningful.InEthiopia,adeveloperrefocuseditsbenefit-sharingprogramonwatersupplytoalocalcommunity.Aftersurveyingthecommunity,thecompanyfoundthatgirlsweredroppingoutofschoolbecausetheyneededtofetchwaterfortheirhouseholdsfromfardistances.Adjustingitsbenefit-sharingplantoaddressthisneedhashadthesignificantandlong-termimpactofhelpinggirlsstayinschoolandattainhigheracademicachievements.Sources:WorldBankmarketsounding,2022.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS87FIVE.CONCLUSIONSomeofthekeyhighlightsfromtheanalysisofsocioeconomiccategoriesoutlinedinthisreportaresummarizedbelow.Participationofdomesticcompaniesinthegeothermalvaluechain•Mappingthegeothermalvaluechaincanhelptoidentifyopportunitiestomaximizethesocioeconomicbenefitsofgeothermalprojectdevelopmentandoperation.Wheregoods,services,andlaborareavailabledomestically,itmaybepossibleto“localize”activities,creatingaddedvalueandcontributingtothegrossdomesticproductofthecountrywhereaprojectisbeingdeveloped.•Identifyinggapsindomesticallyavailablegoods,services,andlaborcreatesanopportunitytodesignsupportprogramstobuildthecapacitiesofthedomesticindustryoverthemediumandlongtermstocapturegreateraddedvalue.•Thereissignificantpotentialtolocalizetheconstructionandoperationandmaintenance(O&M)segmentsofthevaluechain.Evenwheninternationalcompaniesarehired,thereareopportunitiestosubcontractoutportionsofworktodomesticcompanies,orhiredomesticlabor.•Turbines,condensers,coolingtowers,andgeneratorsarehighlyspecializedpiecesofequipment,andtheirmanufacturingisveryunlikelytobelocalized.Muchoftheotherequipmentrequiredforageothermalpowerplant(e.g.,heatexchangers,pumps,valves,piping,andcladding),however,areoff-the-shelfproducts,whichcanbeprovidedbymultiplesuppliers.•Governmentshaveusedprojectprocurementasanavenuetolocalizesomeactivitiesalongthegeothermalvaluechain.Forexample,incentivescreatedfordeveloperstoprocurecertaincomponentsandservicesfromthedomesticmarkethaveservedtonurturethegrowthanddevelopmentofdomesticcompanies.Suchprocurementpracticesshouldbeconsideredcarefullysoasnottonegativelyimpactprojectviabilityandtariffs.•Clustersandindustryassociationscanplayanimportantroleinbuildingthecapacitiesofthedomesticindustrybyprovidingtraining,facilitatinginteractionsbetweendifferentsectorplayers,andcreatingapositiveenvironmentfortechnologytransferandresearchanddevelopment.•Creatingtailoredfinancialproductscansupportdomesticcompaniesinadjustingtheirbusinessactivitiesandscaleupoperationstoparticipateinthegeothermalvaluechain.Geothermalemploymentandskilldevelopment•Thegeothermalsectoremployed196,000peoplein2021,anditispossiblethatthisfigurewillreach296,000by2030(IRENA2021).•Womenareunderrepresentedinthegeothermalsector,accountingforonly22percentofthetotalemployment.TherearealsodiscrepanciesinthetypesofrolesheldbyGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS89women,withfewerwomenintechnicalpositionsandmoreinadministrativeandsupportroles.Governmentsandcompaniesareaddressingthesegapsthroughprogressivepolicies,supportprograms,andfemaleemploymenttargets.•ConstructionandO&Marethetwoprojectphasesthatcreatethemostjobs.Whileconstructionjobsaremoreplentiful,theylastonly2–3years.O&Mjobsarefewerbuttheylastthelifetimeofageothermalfacility(30–50+years).Onaperson-yearsbasis,O&Mcreates20timesmoreemploymentoveraproject’slifecyclethandoesconstruction.•Directuseprojectsoffersignificantemploymentopportunities,especiallyforwomen,youth,anddisadvantagedgroups.•Skillshortagesinthegeothermalsectorarethemostacuteforhigh-skilledrolesandlesssoformedium-skilledroles.Developersreportveryfewissuesinrecruitingforlow-skilledrolesdomestically.Skillshortagesnotonlyimpactprojectdevelopment,butalsotheabilitytodevelopsupportivepoliciesandinstitutionsatthegovernmentleveltoenableexplorationandprivatesectorinvestment.•Manyoftheskillsrequiredbythegeothermalsectorareeasilytransferablefromtheoilandgassector,andmanygovernmentsandcompanieshaveexploredopportunitiestoreskillindividualsfromthisdecliningindustrytonotjustleveragecapabilitiesbutalsopreservejobsandeconomicprosperity.•Governmentsanddevelopershaverespondedtoskillshortagesbydevelopingnewgeothermalcurriculaand/orsendingindividualsabroadtoreceivetrainingindevelopedgeothermalmarkets,suchasIceland,Japan,andNewZealand.Developersoftenhireindividualswithoutgeothermal-specificexperience,andthenofferon-the-jobtraining.•Manycountrieswillnothavethedemandtojustifythecreationofgeothermal-specificeducationprograms,whetherinuniversitiesortechnicalandvocationaleducationandtraininginstitutes.Manycountriesarethuschoosingtoorganizeprogramsattheregionallevel,totakeadvantageofeconomiesofscale.•Sharinginformationonjobopportunitieswithstudentsandpeopleworkinginadjacentindustrieswillbekeytoexpandingthegeothermalworkforce.Studentcompetitions,mentorshipprograms,internships,andapprenticeshipshaveanimportantroletoplayinintroducingindividualstocareeropportunitiesinthesector.•Somegovernmentshaveencourageddevelopersandtheirsubcontractorstohiredomesticand/orlocallaborbycreatingincentivesorsettingrequirementsaspartoftheprojectprocurementprocess.Similarly,severalgovernmentshavesettargetsforwomen’sparticipationintheworkforce.90FIVE.ConclusionEnsuringthatgeothermalprojects’socioeconomicbenefitsarefeltbylocalcommunities•Developersneedasociallicensetooperate.Togaintrust,itiscriticalthattheybuildandmaintainapositiveandlong-standingrelationshipwithcommunities,andcontributetolastingbenefitswithinthecommunities.•Developerssharebenefitswithlocalcommunitiesandstakeholders,includinglocalgovernments,formultiplereasons,suchastogainacceptanceandcollaborate,toensurecomplianceforlegalreasons,andtobuildcommunityresilience.Suchbenefitgoesaboveandbeyondwhatisrequiredbylawtocompensateforlossesordamagesincurredthroughprojectdevelopment(asmandatedbycountries’environmentalandsocialframeworks).•Timelyandtransparentinformation,detailedconsultations,andcollaborativeprogrammaticinterventionsareneededtosharebenefitswithlocalcommunities.Thereisaneedfordeveloperstofindtherightbalancebetweencommunities’wantsandneedsandwhatdeveloperscanrealisticallydeliver.•Therearethreekeycategoriesforbenefitsharing:—Improvementsoradditionstoservicesandlocalinfrastructure(e.g.,schools,healthcenters),—Skillandcapabilityenhancementatthecommunitylevel(e.g.,traininginskillsspecifictogeothermal,orothersubjectsthatcanhelptraineesinitiateenterprisesorenterotherindustries),—Revenue/ownershipsharingarrangements(e.g.,equitystakesinprojects,orapercentageofrevenuedirectedtoacommunity-controlledentity,suchasatrustorlocalgovernment).•Inafewcountries,constitutionalormacrolevellegalframeworksdistributebenefitsatthelocallevel,forexample,throughroyaltiesandproductionbonuses.Similarly,genderequalityandsocialinclusionpolicieshaveallowedforthegreaterworkforceparticipationofwomenandvulnerablegroups.•Integratingbenefitsharingrequirementsintoprocurementdocumentscanhelptoensurethatdevelopersdeliverontheirpromisestocommunities.Projectprocurementalsopresentsanopportunityforgovernmenttoidentifysynergieswiththeirownlocaldevelopmentplans.•Aboveall,buildinglong-lastingtrustwithlocalcommunitiesisparamount.Sustainedengagementandflowoftransparentinformationallowprojectstomoveforwardwithoutcostlydelaysorlitigation.Adedicatedteam,withanequalgenderrepresentation,isrequiredtomaintaintrustandrelationshipswithcommunitiesovertime.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS91ReferencesAxelsson,G.,I.Haraldsson,M.Ómarsdóttir,andM.Hardardóttir.2022.“TheContributionoftheGRÓGeothermalTrainingProgrammeinIcelandtoGeothermalCapacityBuildinginDevelopingCountries.”ProceedingsoftheGeothermalRisingConference,PeppermillResortSpaCasino,Reno,Nevada,August28–31,2022.Barich,A.,A.W.Stokłosa,J.Hildebrand,O.Elíasson,T.Medgyes,G.Quinonez,A.C.Casillas,andI.Fernandez.2022.“SocialLicensetoOperateinGeothermalEnergy.”Energies15(1):139.https://doi.org/10.3390/en15010139.BaseloadPower.N.d.“OurPowerPlants.”https://baseloadpower.jp/en/our-power-plants/.BBA.2018.“Turkey:KeyComponentsofLegalFramework.”http://www.geothermal.bba.is/country/turkey.Blair,A.2021.“WINGmenSpecialTaskforce.”DiscussionPape.Blair,A.N.d.“PartneringforGrowthandSuccess.”AnUpflowpresentation.https://esmap.org/sites/default/files/events-files/Andy%20Blair_Partnering%20for%20Growth%20and%20Success.pdf.Blair,A.,A.Calibugan,C.Coutts,P.Siratovich,A.Dean,S.Milloy,J.Newson,C.Wong,A.Seward,T.O’Halloran,K.Spinks,andE.Collis.2021.“WomeninGeothermalWING:HowtheDriveforEqualityBecameaMovement.”ProceedingsoftheWorldGeothermalCongress2020+1,Reykjavik,Iceland,April–October2021.BlueLagoonIceland.2019a.“Chairman’sAddress.”AccessedDecember20,2022.https://arsskyrsla2019.bluelagoon.is/en/chairmansaddress/.BlueLagoonIceland.2019b.“HumanResource.”AccessedDecember20,2022.https://arsskyrsla2019.bluelagoon.is/en/mannaudur/.Calibugan,A.,A.Blair,A.Dean,K.Matthíasdóttir,andH.Thorsteinsson.2021.“AComparisonofGender-BasedEmploymentDatafromtheNewZealandandIcelandGeothermalSector.”ProceedingsoftheWorldGeothermalCongress2020+1,Reykjavik,Iceland,April–October2021.Chavot,Philippe,ChristineHeimlich,AnneMasseran,YenySerrano,JeanZoungrana,andCyrilleBodin.2018.“SocialShapingofDeepGeothermalProjectsinAlsace:Politics,StakeholderA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ch,thepublicsector,alongsidetheprivatesector,continuestohaveanessentialroletoplay,bothingaugingthesocioeconomicbenefitsofgeothermalenergyandinimplementingstrategiestomaximizethosebenefits.Publicsectorparticipationandleadershiphavelargelybeenrequiredbecauseofthecapitalintensityofgeothermalexplorationandtherisksassociatedwithfindingaresourceorreservoirthatcanbedevelopedinabankablemanner.Thepublicsectorhashadaprominentroleinfinancinggeothermaldevelopment;76–90percentofprojectinvestmentsutilizesomeelementofpublicdebtorequity(Micale,Oliver,andMessent2014).InKenya,forexample,thegovernmentformedandownstheGeothermalDevelopmentCompany(GDC),aspecialpurposevehiclewithatargetofdeveloping1,065megawattsofgeothermalpowerby2030.TheGDCistaskedwithdevelopingsteamfieldsandsellinggeothermalsteamforelectricitygenerationtoKenGen,thestate-ownedutility,andprivateinvestors(GDCn.d.).InIceland,allgeothermalenergydevelopmentwastraditionallysupportedbypublicsectorinvestments.However,in2007,onepowerplantwassoldtotheprivatesector,andin2010,theprivatesectorbecamethemajorityowner(WorldBankmarketsounding2022).Smallcompaniesstartedtobeinvolvedinthedirectuseofgeothermalenergy,earlier,inthe1980s(WorldBankmarketsounding2022).Manyothercountries,forexample,ElSalvador,Indonesia,thePhilippines,Poland,andTürkiye,havebenefitedgreatlyfrompublicsectorinvestmentandriskmitigation,andnowhavedevelopedgeothermalmarkets.Besidesmakingcriticalinvestments,thepublicsectorplaysavitalroleindesigningandimplementingapolicylandscapeconducivetogeothermaldevelopment.Along-termgeothermalstrategywithspecifiedtargetscanhelpbuildconfidenceinthemarket,attractprivateinvestment,anddevelopthedomesticindustry.Privatesectorinvestorsseekaclearandstraightforwardregulatoryenvironment.Easy-to-navigateandpredictablelawsandpermitrequirementscansignificantlyreducerisksinexplorationandprojectdevelopment.FigureA1.1outlinesseveralkeyroles.Manygovernmentsdevelopingtheirgeothermalresourcesarebeginningtosimultaneouslyexaminehowthesocioeconomicbenefitsofprojectdevelopmentcanbemaximized.Forexample,theyaretakingnoteofpotentialskillgapsandworkingtofindsolutionstocreatemoredomesticemployment.Theyarealsofindingwaystoincreasetheparticipationofwomenanddisadvantagedgroupsinthegeothermalworkforce.Experiencehasshownthatasingleprojectwithoutalong-termvisionforfuturedevelopmentisnotlikelytomakeasignificantcontributiontoacountry’ssocioeconomicdevelopment;thisnecessitatesplanningforsocioeconomicbenefitsincoordinationwithanoverallgeothermalstrategy.TheWorldBankhandbookASurePathtoSustainableRenewableEnergy:MaximizingSocioeconomicBenefitsTriggeredbyRenewables(WorldBank2022b)outlinesmanyofthestepsthatgovernmentscantaketoleverageprojectdevelopmentinordertoensurepositivesocioeconomicoutcomes(WorldBank2022b).Somecountrieshavesuccessfullyadvancedtheirsocioeconomicaspirationsthroughprojectprocurementbyplacingspecificrequirementsondeveloperstogeneratethedesiredoutcomes.Forexample,bothTürkiyeandIndonesiahavecreatedincentivesfordeveloperstoprocuregoodsandservicesfromlocalcompanies.Theintentistodeveloptheirdomesticindustries.Evenascontextsvarybetweencountriesandevenamongsiteswithinacountry,sodoestheprivatesector’srole.Insomecases,theprivatesectorwillleadfromtheexplorationphaseuptotheoperationofageothermalplant.ThishasbeenthecaseoftheEthiopia-basedTuluMoyeproject,forexample.Inothercases,aprivatesectordevelopermayenterthemarketoncearesourcehasbeenprovenandspecificpermitsgranted.TheChileangovernmenthasadoptedthisapproach.Inyetothercases,theprivatesectormayfulfillonlycertainresponsibilities,forexample,designingandbuildingapowerplantandasteamfield.ThisisFIGUREA1.1PublicandprivatesectorrolesingeneratingsocioeconomicbenefitsPublicsectorPrivatesector•Policy,planning,regulations,and•Investmentsandnewknowledgeonincentivestowardoverallprogressoftechnologyandbusinessmodelstogeothermalsectorandanimprovedprogressthegeothermalsector.economy.•Investmentsin,andsharingbeneﬁtswith,•Promoteandprotectgenderequalityandlocalcommunitiesandgovernmentsenhancesocialinclusionthroughpolicyleadingtogreateracceptanceandaandrequirementsfordevelopers.sharedpositiveimpact.•Investmentsinexploration,drilling,and•Buildingcapacitiesoftheworkforcedevelopmenttoreduceriskstotheleadingtoanimprovedandwiderpoolofprivatesector.domesticskills.•Educationandworkforceplanningand•Workwithgovernmentsonstandardsforinvestment.thesector,andprovideindustryfeedbackonpoliciesandregulations,topromote•Worktowardmeetingtheinternationalbestpracticein-country.commitments(SustainableDevelopmentGoals,energytransitionetc.).Source:Originalcompilationforthisreport,2023.100FIVE.ConclusionthecaseforLaGEO,thegovernment-ownedentityinElSalvador.Therolesassumedbythepublicandprivatesectorswilllargelybedeterminedbyacountry’sgeothermalstrategyandwillingnesstotakeonearlystageexplorationrisks.Regardlessofthespecificroleandthelevelofinvestment,theprivatesectorplaysanimportantpartinthegeothermalvaluechain,includinginexploration,drilling,projectdevelopment,andoperation.Inmanycountries,privatesectorplayers,includingdevelopersandengineering,procurement,andconstructioncontractors,havehelpedtoinformpolicydevelopment,catalyzeinvestment,gatherdata,upskillthedomesticgeothermalworkforce,andbuildcriticalknowledgeandexperience.Insomecases,geothermaldevelopershavesupportedlocaluniversitiesandtechnicalandvocationaleducationandtraininginstitutesindevelopingnewgeothermal-specificcurricula,providedscholarshipsforstudentstopursuestudiesingeothermalenergy,andtakenoninternstobuildhands-ontechnicalcapacitieswithinthecountry.Todate,fewgovernmentsmandatedeveloperstocontributetocommunitysocioeconomicdevelopmentbeyondwhatisrequiredbynationalsocialandenvironmentalsafeguards.However,evenintheabsenceofsuchrequirementsorincentives,theprivatesectorhasdonemuchtobuildtheresilienceofcommunitiesnearprojectsites.Theirmotivationsarenumerousbutareprimarilydrivenbyaneedtoobtainandmaintainsocialacceptanceandcommunitybuy-in.Withoutsuchcommunityapproval,howeverinformalitmaybe,projectswilloftenbedelayedorevenpermanentlyhalted.Thisreportcapturesmanywaysinwhichgovernment-andprivatelyowneddevelopersworkedcollaborativelywithcommunitiestosignificantlyimprovecommunitymembers’socioeconomicconditions.GEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS101ANNEX2MethodologyOverallapproachThereportfollowstheapproachoutlinedintheWorldBank’sSustainableRiskMitigationInitiative(SRMI)reportASurePathtoSustainableRenewableEnergy:MaximizingSocioeconomicBenefitsTriggeredbyRenewables(WorldBank2022b).Inthisreport,therearefoursocioeconomiccategorieswhicharedetailedinSection1.2andFigure1.2respectively.Toreiterate,theseare:•Participationofdomesticcompaniesinthegeothermalvaluechain•Geothermalemploymentandskilldevelopment•Localdevelopment/benefitsharing•Genderequalityandsocialinclusion(across-cuttingcategory)MethodsTheinformationforthesesocioeconomiccategoriesinthereportwasderivedfromextensiveliteraturereviewandinterviewswithstakeholders.Athoroughliteraturedeskreviewwasinitiallyconductedthatincludedinformationanddatagatheringoneachofthecategories,includingpoliciesandregulatoryinstrumentsinthegeothermalsectorofvariouscountriestoassessifsocioeconomicbenefitswereaddressed.LiteraturewasalsoprovidedbyexpertsfromtheindustryaswellasWorldBank–relatedprojectsandtaskteamleads.Theliteraturereviewwasconsolidatedintoadraftnote,andresearchgapsweredrawnupbytheteam,whichoutlinedtheneedtogatheradditionaldatathroughtheinterviews.InterviewswereheldinOctoberandNovember2022.Over40stakeholderinstitutionsinthegeothermalindustryparticipated,includinggovernment,industryassociations,internationalorganizations,academia,publicandprivatesectordevelopers,andtwotechnicalexperts.Eachinterviewtookabout1–1.5hours,withsomestakeholdersprovidingadditionalwritteninformationandreportspostinterview.Theseconsultationsprovidedinsightsandunderstandingofongoinginitiatives,projects,and/orresearcharoundsocioeconomicbenefitsinthegeothermalsector.Whilethefoursocioeconomiccategoriesprovidedtheoverallframe,consultationsweretailoreddependingonthetypeofinstitutionsandexperts102FIVE.Conclusioninterviewed.Forexample,moredetaileddiscussionswereheldwithprivatesectorplayersonthetopicofdomesticcompanies’participationinthegeothermalvaluechain,andtheirongoingeffortsonbenefitsharing.Followingtheonlineconsultations,asurveyquestionnairewasdesignedspecificallyforgeothermaldeveloperstogatherquantitativedata.Atotalof15developersprovideddetailedinputsonfocusedqueriesaroundthesocioeconomiccategories.Querieswerebothquantitativeandqualitative.Thesurveywasdrawnupmainlyforcompaniestoreviewtheinformationofthevariousfiguresproducedonaspectsofthevaluechain,suchastheparticipationofdomesticcompanies,totalcapitalexpenditureforeachsegment,jobs,andifanyrolesweremissingormiscategorised.Inaddition,severalquerieswerealsoaddedontheothercategoriesofskilldevelopment,gender,andlocaldevelopment.TableA2.1providesalistofallstakeholdersthatwereconsultedaswellasthosecompanies(publicandprivate)thatprovidedinformationthroughthesurveyquestionnaire.TABLEA2.1Stakeholdersconsultedforthestudy(interviewsandsurvey)NO.INSTITUTIONTYPEOFCONSULTATIONSURVEYAndeanGeothermalCentreofExcellence,INSTITUTIONS1ChileEducational,research2ArcticGreenEnergy,InternationalPrivatesectorcompany3BaseloadCapital,SwedenPrivatesectorcompanyBoiseStateUniversity,UnitedStatesEducational,researchComisiónFederaldeElectridad(CFE),Publicsectorcompany4MexicoEducational,researchCzechUniversityofLifeSciencesPrague,5Czechia6Enel,ItalyPrivatesectorcompany7EnerchangeTürkiyePrivatesectorcompanyEnergyDevelopmentCorporation(EDC),PrivatesectorcompanyEducational,research8PhilippinesGEORGGeothermalResearchCluster,9Iceland10GeothermalCouncilofChileAssociation11GKeenoythaermalDevelopmentCompany(GDC),Publicsectorcompany12GeothermalVillagesNetwork,KenyaResearch,networkNO.INSTITUTIONTYPEOFCONSULTATIONSURVEYINSTITUTIONS13GovernmentofSt.LuciaGovernmentGRÓGeothermalTrainingProgramme,Educational,research14IcelandGudmundurHagalinGudmundsson,Geothermalexpert15IcelandIndonesianGeothermalAssociation,Association16Indonesia17InstitutNationaldelaRecherche,CanadaEducational,research18ICnossttitauRtoicCaostarricensedeElectricidad(ICE),Publicsectorcompany19IGnusatitteumtoaNlaacionalDeElectrificación(INDE),PublicsectorcompanyInter-AmericanDevelopmentBank,UnitedMultilateraldevelopment20StatesbankInternationalGeothermalAssociationAssociation21(global)InternationalRenewableEnergyAgency,Intergovernmental22UnitedArabEmiratesagency23IzmirInstituteofTechnology,TürkiyeEducational,research24JóhannJónasson,IcelandGeothermalExpertKenyaElectricityGeneratingCompanyPublicsectorcompany25(KenGen)26LaGeo,ElSalvadorPublicsectorcompany27Landsvirkjun,IcelandPublicsectorcompanyMexicanCenterforInnovationinEducational,research28GeothermalEnergy,Mexico29MexicanGeothermalAssociation,MexicoAssociationNationalRenewableEnergyLaboratory,Government,Research30UnitedStates31OrmatInc.,TürkiyePrivatesectorcompanyOserianDevelopmentCompanyLimited,Privatesectorcompany32Kenya33PTPertamina,IndonesiaPrivatesectorcompany34PolarisEnergy(Nicaragua)Publicsectorcompany35PTGeoDipaEnergi(Persero),IndonesiaPublicsectorcompany36PTSupremeEnergy,IndonesiaPrivatesectorcompany104FIVE.ConclusionNO.INSTITUTIONTYPEOFCONSULTATIONSURVEYINSTITUTIONS37ReykjavikEnergy,Iceland38SarullaOperationsLimited,IndonesiaPublicenergyandutilitycompanyServicesIndustrielsdeGenève(SIG),39SwitzerlandPrivatesectorcompany40UniversityofGeneva,Switzerland41UniversityofGlasgow,UnitedKingdomPubliclocalutility42UniversityofTexas,UnitedStatesEducational,researchUnitedStatesEnergyAssociation,UnitedEducational,research43StatesEducational,research44Upflow,NewZealand45WomeninGeothermalIndonesiaAssociation46WomeninGeothermal(Global)47WorldBank(global)Privatesectorcompany48ZorluEnerji,TürkiyeAssociationAssociationMultilateraldevelopmentbankPublic-privatecompanyGEOTHERMALENERGY:UNVEILINGTHESOCIOECONOMICBENEFITS105PhotoCreditsp.XIX©samey/AdobeStock.p.XXIISupremeEnergyp.4©ESMAP/TjörviJónssonp.5©ESMAP/TjörviJónssonp.8©JohnnyGreig/iStock.p.12©LýðurSkúlasonp.15©DmitryNaumov/AdobeStockp.17©JóhannJónassonp.24©AlperBabap.28©ESMAP/TjörviJónssonp.29©Cardaf/AdobeStockp.30©LaGeo.p.33©WINGTürkiyep.38©LýðurSkúlasonp.40©HéctorMiguelAviñaJiménezp.43SupremeEnergyp.45©Andrea(Andy)Blairp.46©LaGEOp.56©GRÓGTPp.58©ESMAP/TjörviJónssonp.60©NRELp.62©AllyMcFarlanePhotographyp.66©BaseloadPowerp.67©LaGeo.p.77©PolarisEnergyp.78©EDCp.82©PolarisEnergyp.84©Gudellaphoto/AdobeStock.p.88©Andrea(Andy)Blairp.106©LýðurSkúlason

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