California, USA -- The Geothermal Energy Association is working with California energy authorities to help restart the flow of state utility power purchase agreements made with geothermal electricity generators, after close to a year's doldrums. Karl Gawell, executive director of the Washington-based GEA, said, "There is no question that geothermal is stalled in California. We need PPAs and transmission lines, and this year it is particularly important to see how (Western) states are working together to solve this," addressing a small roundtable group during the National Geothermal Summit, last Wednesday in Sacramento.
Paul Thompsen, the current president of GEA and the director of policy and business development at Reno-based Ormat Technologies suggested that one reason the flow of PPAs has dried up in California is that many utilities are now comfortable that they will be able hit the state's 33 percent renewable energy portfolio standard target, and thus have cut back on contracting for renewable power, and particularly for geothermal energy. Another perhaps more crucial reason, he suggested, is that utilities in the state have been focusing on forging renewable energy PPAs at the lowest cost per kilowatt-hour -- like those provided by wind and solar photovoltaics plants – without taking into account the fact that their intermittent nature necessitates development of other forms of power for times when the sun doesn’t shine and the wind doesn’t blow. Hence, there is insufficient focus on the real cost of integrating wind and solar resources to the grid.
Since geothermal plants operate 24/7 as base-load contributors, industry officials say that geothermal generators cannot be compared on an apples-to-apples basis to peak-time-oriented solar and wind generation sources, which are variable in their temporal contribution to the grid. Once transmission and other connection costs are integrated, geothermal energy is less expensive, several industry leaders at the conference claimed. Who pays for future transmission lines is also a hot potato in California, with developers pitted against ratepayers in some cases.
Conceptual Renewable Energy Transmission Export Projects
Some California officials, like State Assembly member Manuel Perez, who represents geothermal resource-rich Imperial County, also oppose the development of cross-border transmission lines. At the conference, Perez asked, "Why do we have geothermal energy imported into California? We have 3,400 megawatts of potential geothermal energy in the Salton Sea area." He would like to block the construction of transmission lines from Nevada, the state with the greatest concentration of geothermal energy, to California, citing a preference to keep jobs at home, building transmission lines from his county to California load centers, where needed. "We have close to 30 percent unemployment in Imperial County," he observed.
California Governor Jerry Brown also favors in-state transmission projects, supporting the position of some affected unions in the state, according to one private sector transmission line developer who asked not to be identified. The governor's position became clear in an August 2011 letter by Michael Picker, the senior advisor to the governor for renewable energy facilities, addressing the Western Electricity Coordinating Council. In the letter, Picker reportedly supported state self-sufficiency in terms of future renewable energy needs. The council members previously had been hoping to supply California with much of its need for renewable energy to meet the high state RPS.
Stacey Crowley, the director of the Nevada Office of Energy, in Carson City, said in an interview at the Summit that her state is studying the economic impact of cross-border transmission line development, with the assistance of an outside consultant, to assign potential benefits to each involved state. California and Nevada also announced a new effort last week to work together to review transmission line development between the two states, she noted. "We're not only working with California, but also other Western states on transmission line development," she said. Overall, Nevada is planning three new transmission lines to more fully integrate the state with its neighbors, as part of the work of a new state energy industry task force.
Jan Smutny-Jones, the executive director of the Independent Energy Producers Association, a Sacramento-based trade association, suggested that multi-state grid connections will continue to handle variations in state electricity demand, despite any transitory political resistance: "The Western grid has always been inter-dependent and it will continue to be."
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