A third concern from Schay’s perspective: “The State Legislature is considering making some old-school hydro projects eligible for compliance under the RPS, emasculating Oregon’s RPS.” And finally, Oregon’s Business Energy Tax Credit will disappear by mid-2014. The sunsetting tax credit “did much to help generate renewable energy in Oregon,” Schay says.
On the bright side for developers seeking to do business on Oregon’s resource-rich lands, among its legislative developments this past year, HB 2435 made geothermal an eligible form of energy for the state’s net metering law and also specified that state green energy construction funding must go toward “new” technology.
Schay says, “Net metering can change the equation, because companies and organizations that can successfully employ net metering may save $70 to $80 per MWh, plus sell excess electricity at $40 per MWh. Such projects can really make sense when a waste-heat component is added and when this heat replaces propane or fuel oil.”
For Washington State, 2013 was a year of setting the stage for geothermal development, according to Kathleen Callison, an attorney whose office has contributed to state action including researching the laws of other states. Currently there is no installed geothermal direct use or power generation capacity in the state; however, recent exploratory work, the first in Washington since the 1980s, reflects renewed interest.
“To put geothermal development in context,” Callison tells GEA, “hydropower has historically been the source of inexpensive power in Washington, beginning with the construction of Grand Coulee Dam by President Franklin Roosevelt. The Columbia River hydropower system fueled the aluminum and aerospace industries in World War II as well as the growth of Seattle and other major metropolitan cities. With RPS mandates in place, wind energy has been the preferred source of green energy to date.
“With anticipated future load growth requiring new sources, geothermal power is well positioned to be the next generation of baseload power,” she said.
Callison tells GEA there were several key actions taken in Washington in 2013 for geothermal and other renewables, beginning with Washington Governor Jay Inslee (D)’s joint agreement with the governors of Oregon and California and British Columbia’s premier to support renewable energy development.
She names several important actions taken by the Washington Department of Natural Resources, which “transferred paper records on geothermal wells and resources to electronic databases; updated existing resource maps and created new maps; drilled test wells and gathered new resource data in the Wind River Valley in south central Washington; and developed a “Favorability Map” that combines geophysical and chemical data with other data critical to project decision-making, such as land use constraints and access to transmission lines.”
The Washington Legislature passed SSB 5369, updating the state’s geothermal law and making it consistent with other laws that developers are used to working with. “The bill incorporated input from key stakeholders including Susan Petty of AltaRock Energy and the Washington Departments of Natural Resources and Ecology, and was based in part on research on the laws of other states and the federal government by my office,” Callison says. “The legislation updates the definition of geothermal resources; clarifies resource ownership; strengthens coordination between state agencies; allows for certain uses of water without a water right; and provides assurance that water rights will be protected.”
Passage of SSB 5369 has resulted in important ancillary benefits, including “establishing working relationships among stakeholders; educating elected officials and staff, agency representatives, and interested members of the public; and strengthening connections with geothermal colleagues in Oregon through ongoing discussions.”
“Washington has laid the groundwork and looks forward to working with the geothermal industry to put the state’s geothermal resources to use for power generation, direct use, and combined heat and power,” Callison says.
California did not have any geothermal-specific laws enacted in 2013, but it “has been the driving force behind renewable markets in the past,” notes GEA Executive Director Karl Gawell, “and as it seeks to achieve the state’s aggressive greenhouse gas reduction goals it is expected to rebound.”
With both a climate law and an RPS in place, Gawell says, the California PUC and the California Air Resource Board (CARB) will focus on implementation. The PUC is working on a new Long-Term Procurement Plan and CARB released its draft Climate Change Scoping Plan in October, making some very strong statements about the state’s future direction and its need for additional clean, renewable power.
The draft plan says the State “will need to continue and expand current programs to accelerate progress and achieve another 80 percent emission reduction by 2050.” Taking in to account energy needs for transportation and traditional residential, commercial, and industrial activities, “near-zero carbon electricity supply is essential” for the state to reach its ultimate goals.
Gawell adds, “With an estimated geothermal reserve base of several thousand megawatts, there is almost certain to be renewed activity in California.”