The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Accelerating Geothermal Growth Through DOE Initiatives

The U.S. geothermal power industry is poised for a bit more rapid growth now that the U.S. Department of Energy's geothermal development program is maturing with demonstration-stage pilots. This acceleration of growth also will be spurred on by an increasing number of municipalities and utilities that are turning to geothermal as an alternative energy option for either renewable mandate or investment reasons, industry executives say. While the U.S. geothermal power market is still somewhat tepid in comparison to the international market, U.S. technology exports will help U.S. companies weather the wait for a more rapid domestic market expansion.

“This industry has been reborn in the last few years and there is actual growth in the number of companies involved: we are now seeing more companies producing geothermal than five years ago, and more companies actively developing than there were two years ago,” said Karl Gawell, executive director of the Geothermal Energy Association (GEA), in Washington.

DOE’s Geothermal Program Rolls Out

DOE’s Geothermal Technology Program (GTP) was strategically expanded in 2008 and won funding of $368 million under the Recovery Act. Although roughly $40 million a year has been applied to the program over the recent past, President Obama’s “Christmas wish list” to Congress included $101 million for 2012, according to Douglas Hollett, Washington-DC-based GTP manager. Within the broad GTP program — which includes dozens of technology projects, enhanced geothermal systems (EGS) is the primary development target.

“Hands down, EGS is the most promising geothermal technology under development today,” confirmed Tom Williams, the laboratory program manager for geothermal at the National Renewable Energy Laboratory (NREL), in Golden, Colo. EGS reserves often require water injection, and in some cases, like Calpine’s Geysers facilities, municipal grey water is used to community advantage.

Hollett explained, “We now have seven EGS demonstration projects at various stages of activity in several states (including California, Idaho, Hawaii, Nevada and Oregon), and each is moving along with high hopes. The goal is to develop a five-megawatt pilot by 2020, which will be significant.” To get there, DOE is trying to solve a myriad of technology problems simultaneously. “Among technology targets, three leading problems are: the need for drilling faster and more efficiently; the need for better stimulation technology; and the need for high temperature electronics for work in bit steering or down hole measurements,” Hollett noted.

Indeed, many of the federal laboratories have geothermal projects underway. But at NREL, “the biggest thing we are working on is cooling systems for geothermal generators. At peak demand time, you can use some water at an otherwise dry-cooled unit and increase power output by 25 percent,” said Williams. “The project may move into a field test next year,” he said.

While the decade-long GTP program is aimed at establishing the commercial viability of geothermal power generation, the budget war in Washington leaves financial continuity a challenge. “Something we do on a daily basis is to fine-tune where our research dollars going; you could liken it to a financial portfolio in which you focus your efforts on the things that are working the best, balancing them with the things that have the biggest impact,” Hollett said.

Utilities, Cities Embrace Geothermal

While utilities, especially in the West, are helping to drive the expansion of geothermal power on a larger scale, municipalities and educational institutions are helping to drive smaller scale applications including power and heating/cooling systems.

Among utilities, some like Las Vegas-based NV Energy, have been utilizing geothermal power under power purchase agreements since the 1980s. As a result of their comfort level and experience, geothermal is increasing within their renewables mix. “We expect a large number of geothermal generating facilities to come online over the next two years before the tax credit cut-off in 2013,” said Bobby Hollis, the geothermal executive at the utility. NV Energy anticipates that geothermal will increase as a power source from 42 percent of the utility’s renewable energy supply now to about 50 percent over the near term, leading the nation in geothermal usage as part of its overall sourcing. Renewables make about 15 percent of the utility’s total generating facilities.

Certain strategically oriented utilities may also move beyond power purchase agreements for geothermal energy and make direct equity investments. At NV Energy, “there very well may be opportunities over the near term for us to own a geothermal facility instead of being a power off-taker, if we can show value for customers and it pencils out,” said Hollis.

At the same time, more municipalities — like Aspen, Boise and Reno — are turning to geothermal heat and/or power as a renewable resource. “There looks to be an interesting market opportunity with small government entities,” said Williams. “The smaller scale economy involved in a municipal geothermal system may not attract utilities, but these systems can have a huge impact on people in the community.  There are driving factors at work beyond dollars and cents, such as creation of sustainable local jobs and enhanced quality of life” he added. Similarly, Ohio State University, in Columbus, which is developing a $10 million geothermal project, is an example of an institution that is embracing the source.

Foreign Markets Loom

About 60 percent of the member companies of the GEA now do business overseas, said Gawell. While there is not yet a “green bank” that finances renewable energy development in the United States, the U.S. Export-Import Bank (Ex-Im) and the U.S. Overseas Private Investment Corp. are doing yeoman’s duty in financing U.S. geothermal technology exports. While some Ex-Im funds are loaned directly for specific projects, as in recent geothermal deals in Turkey, other funds for geothermal projects are loaned as part of a more generally targeted bundle, like the $1 billion earmarked for lending within Indonesia in January 2010.

Indeed, traditional geothermal-tapping countries like Indonesia are setting the stage for large-scale growth. Currently, the state oil company PT Pertamina is mulling a US $0.10 per kilowatt-hour (kWh) tariff for geothermal power to make development more attractive to foreign investors. Similarly, the Middle East/Africa and Latin America are warming rapidly to geothermal projects. In fact, leading U.S. purveyor Ormat Technologies has won contracts in Kenya, Guatemala and Nicaragua.

Limits to Growth

Proving geothermal resources at a likely geothermal power site is still a major drag on the timeline of projects today. DOE’s many technology development projects — including satellite scanning — should help speed and standardize reserve definition. According to a blue-ribbon panel assessment of DOE’s GTP in June 2011, “the U.S. Geological Survey estimated in 2008 that 30 GW of undiscovered geothermal resources could be found in the western United States. This provides an opportunity for a 10-fold increase compared to today’s installed capacity.”

And there is still a need for more proven utility-scale geothermal power technology to convince private banks to finance the industry, even though they have long financed solar and wind projects. This is especially true for low-temperature reserves and for EGS, for which the industry is seeking to develop bankable standard risk analysis measurements. Smaller applications, like oil well associated flows being developed in Florida and Texas may be able to demonstrate the economic feasibility of low-temperature geothermal power over the nearer term.

Perhaps the greatest limit to growth is the unpredictability of political will in Washington to invest in geothermal during the pre-election period. But rising energy demand and the virtually uncontrollable price of oil should spell out the wisdom of efforts like the GTP. “There will be a double-whammy to our economy if renewable resources like geothermal do not continue growing,” said Gawell. 

Charles W. Thurston is a journalist who specializes in renewable energy, from finance to technological processes. He has been active in the industry for over 25 years, living and working in locations ranging from Brazil to Papua New Guinea.

Untitled Document

RELATED ARTICLES

Energy Storage and Geothermal Markets Look To Team Up in the Hunt for Lithium

Meg Cichon In today's fast-paced tech environment, no one can make a splash quite like Elon Musk. So when he decided to enter the energy storage game in 2014, he did it with gusto. Musk is now in the process of building what he coined...

Regional News from the July/August 2015 Digital Edition of Renewable Energy World

Renewable Energy World Editors EcoFasten Solar announced that it launched a new mounting "Rock-It System" that it would be displaying during Intersolar. Product compliance was determined through testing per UL Subject 2703, which reviews integr...

SkyPower Inks $2.2 Billion Deal for Massive Solar Power Plant in Kenya

Eric Ombok, Bloomberg Kenya’s Energy Ministry and SkyPower Global Ltd. will sign a $2.2 billion agreement on Sunday that paves the way for the Canadian company to develop a 1-gigawatt solar project in East Africa’s biggest economy. The solar pro...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

StartUp Green

AREI, American Renewable Energy Institute, in partnership with ...

GRC Annual Banquet

GRC Annual Banquet Monday, September 21, 6:00 pm - 9:00 pm National Auto...

GRC Fieldtrip - Geothermal Direct Use Tours of the Peppermill Resort

Free to all attendees (limited to 30 participants per tour) Located...

COMPANY BLOGS

Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

Registration Opens for GRC Annual Meeting & GEA Geothermal Energy Expo

GRC Annual Meeting & GEA Expo:   Register Now for the 2015 GRC ...

New Approach to Crowdfunding Renewable Energy Assets

In our business, our goal is to help people improve their quality of lif...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS