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Capturing Geothermal Opportunity Amidst a Transitioning Market

“I can remember as a young man driving from Carson City to Reno for the first time and I saw this steam coming out of the ground,” Nevada Senator Harry Reid told the geothermal industry last week. Although the congressman was in Washington DC trying to prevent a government shutdown, as his representative Vinny Spotleson reminded the audience, he and Senator Dean Heller both conveyed their support and appreciation of geothermal via video remarks at the opening plenary session of the GRC Annual Meeting and GEA Geothermal Energy Expo in Las Vegas.

Nevada, which has long been at the forefront of geothermal development, has nearly 520 MW of nameplate geothermal capacity and more projects in development than anywhere else.  Recent legislation (SB 123) requires NV Energy to shutter its two coal-fired plants by 2019 and envisions up to 350 MW of renewable energy in the replacement plan; GEA and several of its members recently filed comments to the Nevada PUC to ensure geothermal power’s attributes will be fairly valued in the competitive process. In the plenary, both NV Energy CEO Michael Yackira and Nevada PUC commissioner Rebecca Wagner also highlighted the MidAmerican Energy Holdings acquisition of NV Energy, announced in May, a transaction with an enterprise value of approximately $10 billion that sees both sides bringing geothermal experience to the table.

In fact, many of the speakers latched on to the possibilities for geothermal within current U.S. energy market transitions. While a geothermal project timeline is long — typically four to six years — Bloomberg NEF analyst Mark Taylor described this as a natural fit for California’s RPS needs. “The U.S. is back,” he said — referring to the fact that many in the industry have turned their sights to international opportunities in light of oft-political challenges for stateside geothermal.

Dennis Gilles, U.S. Geothermal’s new CEO who has long been an industry figure, was also optimistic. Gilles noted that while challenges have even caused some to leave the industry, this creates new opportunities for his company, which has plenty of reason to be confident, having recently brought on line the first commercial geothermal production plants in both Oregon and Idaho. Just today they announced a new 25-year, $30.74 million loan from Prudential Capital. Doug Hollett, head of DOE’s Geothermal Technologies Office, said the agency expects to soon be breaking a hiatus by announcing new funding opportunities for enhanced geothermal systems, innovative exploration technologies, and low-temperature/coproduction this year.

The discussion continued on the Expo floor surrounded by examples of technology on display, including fan blades, magnetic sensors, and extracted cross sections of rock. “Some of our best customers are here,” one supplier confirmed.

The DOE’s Hollett joined in on GEA’s afternoon media availability, along with GEA’s Gawell; Bob Sullivan, Ormat Technologies; Halley Dickey, TAS Energy; Patrick Hanson, Scientific Drilling; Lou Capuano, consultant and President of the GRC; and Craig Matazcynski, Gradient, who was just confirmed as the new President of the GEA. Press questions ranged from technology innovation to transmission capability to politics.

In the spirit of public education, and unwittingly echoing Senator Reid’s words, Capuano said in simple terms: “Every power plant in the world runs on steam,” and while it’s usually a matter of burning something to get it, “we have steam coming out of the ground.”

This article was originally published on GEA's GeoEnergyWire and was republished with permission.

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