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

Geothermal 2014 Outlook: As US Market Slows, A Global Focus Grows

Following another year of modest growth, the geothermal industry will continue to fight the good fight in 2014 by focusing on key issues that have hindered its massive global potential.

While the U.S. geothermal market still seems to be in a slump, the global market is expected to bring close to 1,000 megawatts (MW) of geothermal capacity online each year for the next six to seven years, according to Karl Gawell of the Geothermal Energy Association. Some of these regions, such as the Caribbean, are breaking ground on their first geothermal projects.

“Years ago we were seeing people just beginning to look for geothermal resources in these areas. Now we are seeing people drill and move forward with projects,” said Gawell. “So we can look forward and see projects that are in progress — they are no longer what we call prospects.”

Although the international market is still heating up, and only getting hotter, industry experts caution that it holds some major roadblocks that may prevent major growth for the forseeable future.

U.S. Market: Same Old Story

“I’m almost getting tired of having to describe Washington as ‘stuck in gridlock,’” said Gawell. 

Indeed, U.S. Congress has failed to create major waves in the energy sector for some time, and mostly focused on short-term tax incentive extensions. Geothermal experts see this approach as a band aid on an industry longing for a long-term plan. “What we need is meaningful, long-term legislation with definitive price structures,” said Halley Dickey of TAS Energy.

Rather than waiting on the federal government to come to its rescue, Gawell advises the industry to focus on the state level. “I think what is important is to realize that what drives renewables are the states — that is where you get contracts,” he said.

Geothermal should focus on state renewable portfolio standards, transmission planning and procurement policy in order to score development contracts. Several key areas to watch in 2014 include the NV Energy consolidation — part of the merger is moving forward with renewables solicitation.

California is another hot state to track as they try to figure out how to move forward with long-term renewable energy procurement. “[California has] high enough levels of intermittent resources that they are beginning to recognize the values of flexible and baseload resources,” said Gawell, “but they are not sure how they are going to be translated into project bid evaluation.”

In order to find a role in these long-term plans, the geothermal industry needs to continue to emphasize its baseload and dispatchable capabilities, explained Gawell. Geothermal’s value is also undermined internationally, according to Philippe Dumas of the European Geothermal Energy Council (EGEC). When asked to explain the biggest challenge facing the geothermal industry, Dumas stated a simple lack of knowledge about the technology’s benefits.  

“There is a big lack of awareness about its advantages and its potential, and so the appropriate support measures are not established,” said Dumas. “This is currently the biggest challenge in order to be considered in the energy scenario 2020-2030 and 2050.”

No matter how you slice it, “the first half of 2014 is going to be slow domestically,” explained Dickey. “There is not much going on." 

Dickey said that there may be a few projects that break down – many of which had benefited from tax incentives. Most of these projects are in the western states, and projects being contemplated in Nevada, Idaho and Washington just might “have legs enough to actually move forward,” said Dickey.

The International Allure

“The big news for the geothermal industry continues to be the global market,” said Gawell.

Countering the stagnant growth potential in the U.S., the international market seems to be gaining new players every day. According to Gawell, top players in 2014 include East Africa, Central America, and Indonesia. They seem to be very strong, headwind going, projects in construction phase you will see move forward.

Dickey emphasized that Turkey has a very strong geothermal market after announcing a promising feed-in tariff. “Turkey is probably the strongest and fastest growth market in geothermal in the world right now.”

In the last year several financing agencies have announced initiatives to help spur geothermal growth, including the World Bank’s $500 million geothermal fund and Ex-Im Bank facilitating project deals worldwide. International initiatives such as Power Africa and the Geothermal East Africa Initiative help spread technology and education to developing nations. Though funding, support and interest is abundant, these areas still hold major roadblocks to development.

“The will and the resource is there, but you've got risk elements,” said Craig O’Connor of Ex-Im Bank. The African government, for example, does not like to give financial guarantees – even though banks need this assurance to move forward. Many of these regions also lack the legal knowledge and resources to pull a project together and get it started, noted Gawell. 

“Just as much as we need to send over education and technology, we need to communicate business best practices, thoughts and ideals about how to go to market and do business,” explained Dickey. “They are proud and excited and have a great resource, but they don't understand the way everyone does business — so there is a bit of a disconnect.”

Despite these challenges, many U.S. companies are still trying their luck overseas as their home market remains quiet. According to Gawell, projects are moving forward and many companies in the U.S. market are looking overseas because it is better economically. However Gawell still holds out hope for the U.S. market in 2014.

“Were hoping that as states move forward to meet a renewable portfolio standard or climate goal that there is no question the need for firming power for filling the gaps is going to be huge,” he said. “That raises the profile for geothermal that we can at least partially fill the goals of keeping the grid reliable — and that allows for greater concentrations of wind and solar by supporting grid integration.”

Lead image: Geothermal plant via Shutterstock

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox

Subscribe to Renewable Energy World or email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

RELATED ARTICLES

Top 10 Clean Energy Trends Driving the Global Clean Energy Revolution

Top 10 Clean Energy Trends Driving the Global Clean Energy Revolution

Geothermal Industry Could Come With $73 Billion Price Tag

Anna Hirtenstein, Bloomberg The geothermal industry may need as much as $73 billion in public financing, almost 10 times current spending levels,...

States Already Seek To Delay Clean Power Plan

Andrew Harris, Bloomberg Fifteen states led by coal-rich West Virginia asked a federal court to stall Obama administration rules intended to c...

Global Renewable Energy Roundup: China, Kenya, Turkey, India Seeking More Renewables

Bloomberg News Editors China is being encouraged by three industry groups to double the nation’s solar-power goal for 2020 to make up for sh...

PRESS RELEASES

Canadian Solar Wins Five Solar Power Projects Totaling 185 MW in Brazil

These power projects were won under a 20-year Power Purchase Agreement (PPA) with the B...

$100 Off of 5-day Advanced PV Project Experience. Download a Topic Schedule.

Assemble, ground, energize, and commission a complete grid-tied SolarEdge system from s...

Former Australian Prime Minister Kevin Rudd talks politics of fear vs. politics of hope

Rudd, who led the Australian parliament from 2007 to 2010, told the Summit audience tha...

Intersolar AWARD „Solar Projects in India“ – Applications being accepted until September 18

The Intersolar AWARD in the category Solar Projects in India honors projects in the fie...

FEATURED BLOGS

Washington, DC Bridges the Solar Gap

The District of Columbia has enjoyed 15 years of strong economic growth. But prosperity is spread unevenly across the...

Sell Through Hypothesis

You first learned to hypothesize, or make educated guesses, in grade school science class. Now it’s time to ref...

Cronimet / THEnergy study: In solar for mines size does not always matter - Reducing CAPEX with energy efficiency and load shifting

Munich, September 2015. Mining companies are constantly gaining interest in solar solutions because frequently solar ...

Final Program Now Available for GRC Annual Meeting & GEA Geothermal Energy Expo

GRC Annual Meeting & GEA Geothermal Energy Expo - Final Program from

FINANCIAL NEWS

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! @jennrunyon

FEATURED PARTNERS



EVENTS

GRC Annual Meeting & GEA Geothermal Energy Expo

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

GRC Fieldtrip - Long Valley Geology

Led by: Gene Suemnicht and Duncan Foley     &nb...

GeoPower & Heat Summit

The GeoPower & Heat Summit is the most commercial event in the geoth...

COMPANY BLOGS

Final Program Now Available for GRC Annual Meeting & GEA Geothermal...

GRC Annual Meeting & GEA Geothermal Energy Expo - Final Program f...

GRC Annual Geothermal Photo Contest - View all the Entries

36th Annual Geothermal Photo Contest The Geothermal Resources

Why Electric Utilities Love Geothermal

When it comes time to think about replacing the heating and cooling syst...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS