As the thousands of people in the geothermal energy industry wrap up an exciting and challenging year, they are united by some recurring themes. Investigative geologists, problem-solving engineers, and pioneering international business leaders are some of the players who worked this year to bring together the heat of the Earth with the cities, customers, and other industries that need its unique environmental and economic benefits.
Applications within the Earth power sector are diverse, but the message that the industry sends is the same: with 13,000 MW under development globally, now is the time to get in to the geothermal business.
“We are seeing new technology developments moving forward,” said the Geothermal Energy Association’s Executive Director Karl Gawell. “For example, a California company began construction on the first commercial plant using lithium carbonate from geothermal, and a University of Minnesota startup began the first application of carbon dioxide plume geothermal.”
The Association of U.S. companies who are developing geo power recognized advancements in the industry through its 2013 Honors program. The 22-MW Neal Hot Springs, Oregon plant was honored for being the first commercial, supercritical Organic Rankine Cycle (ORC) binary power plant. It was built by US Geothermal and TAS Energy. GeothermEx, a Schlumberger company, was recognized for its work supporting the development of over 7,000 MW of geothermal. And a planned geothermal community led by Dale Merrick and CanbyGeo that would combine power, district hearing, greenhouses and aquaculture was honored for its Environmental Stewardship.
“The industry’s knowledge about Enhanced Geothermal Systems also increased in 2013,” said Mr. Gawell: aside from U.S. projects, Australia put its first “enhanced geo” or EGS pilot plant, a 1-MW trial, on line at Habanero. This success was celebrated by U.S. parties and drove further interest in the technology. In Europe, there were EGS advancements in Hungary, the United Kingdom, and Switzerland.
Meanwhile the EGS projects in the U.S. that made strides were headed up by Calpine Corp., Ormat Technologies, and AltaRock Energy, and all received federal administrative support. Their demonstrations have been successful, too.
The Department of Energy (DOE)’s Geothermal Technologies Office coordinates federal support for these and other geo industry projects. Other Administrative steps to support the international industry this year included the Power Africa initiative.
Halley Dickey, Director of Geothermal Business Development for TAS Energy said the $7 billion U.S. federal commitment called Power Africa, along with industry efforts on both continents, “demonstrates the absolute potential and emphasis on an emerging market for geothermal; namely Africa, from both a resource potential in sheer megawatts and from a commercial potential in a short period.”
But, he went on, “It also demonstrates the confusion within the United States and lack of the same laser-like focus on our current resource potential and our need for renewable energy within our own borders. What could we do with the same focus and emphasis?”
Still, “there are many U.S. projects that can come on prior to 2016,” Mr. Dickey said.
Mr. Gawell agrees that the U.S. policy landscape has been lacking. “In the U.S., geothermal has been a hostage to Washington’s gridlock politics and lack of any clear national clean energy policy,” he said.
Around this time last year, the U.S. Congress escalated the fight over a legislative package that included renewable energy tax credit riders, taking the country to the brink of a fiscal cliff at year's end. On January 1, 2013 the industry received the holiday news that tax credits for geothermal were, though not extended, adjusted. This would encourage more geo projects to develop their power plants just as fast as the permitting and other paperwork would allow—which by most counts, unfortunately, is not very fast.
Oil and gas companies have been getting incentives for decades, and renewable energy is a more recent addition. Geo experts want to be on a level playing field and are still catching up since geothermal has qualified for the major renewable tax credit only since 2005.
The adjustment Congress adopted at the beginning of the year allowed projects to qualify earlier in the project development process. Instead of having to be in production, they could qualify at the construction stage. There are a number of projects that will benefit from this that might not have been built otherwise. It will take some time to piece together how many projects end up qualifying.
Only in the last month of the year have there been signs of change in Washington, with a bipartisan, bicameral budget deal in the Congress and a new clean energy tax proposal by Senate Finance Chair Max Baucus (D-MT). “The budget deal could open the door to finishing appropriations bills, which could reinvigorate the DOE research program,” Mr. Gawell said; “And the Baucus tax paper breathes new life into efforts to establish long-term incentives for geothermal and other clean power technologies.”
While the U.S. works through its challenges, “We have continued to engage the community of developers and supporters and have tracked milestones from all over the world,” he said.
Becky Little coordinates some of the activities of the Executive Director and the Association. She said, “As 2013 comes to a close, many U.S. developers are looking abroad to countries where geothermal growth has been strong.”
Mr. Dickey’s international geo market involvement included Indonesia, the Philippines, Africa, and: “As a company, our greatest growth market was and is Turkey,” he said.