WASHINGTON, D.C. -- Geothermal resources provide about 3,440 MW of power to the United States electrical grid as of early 2014.
See the first article in this series on geothermal values “Is Geothermal the Only Baseload Power Replacement that Makes Sense?” here.
In a recent report, the Geothermal Energy Association explored geothermal power’s unique values that make it essential to the U.S. energy mix. These plants have the same important baseload qualities coal now provides for over two thirds of the electric power generation in the nation. Geothermal can be a high-value substitute for baseload fossil fuel or nuclear power plants, providing firm, clean power 24 hours a day regardless of extraneous conditions.
“As state and national policies move to significantly reduce climate changing power emissions, geothermal is a baseload clean energy that can replace baseload fossil fuels at a minimum cost to the power system,” says Karl Gawell, GEA’s executive director.
Gawell explains that as the grid uses more variable energy resources, which it most certainly will, the flexibility of geothermal energy is an attribute that regulators are still learning about. “Flexible geothermal can help firm the system, allowing for imbalance, and is able to provide supplemental reserve,” he adds.
The U.S. continues to make strides toward a cleaner energy mix largely through wind and solar contracts to meet goals of state Renewable Portfolio Standards. This creates a greater need for firming power, and although geothermal can provide this as well, it could get lost in the mix if natural gas becomes a fallback to offset intermittency.
In his 2014 State of the Union address, President Obama called natural gas “the bridge fuel that can power our economy with less of the carbon pollution that causes climate change.” Geothermal energy, too, provides the same stabilizing function as natural gas and comes with unique environmental and economic ancillary benefits. Ancillary services support the transmission of electricity from a supplier to a purchaser and include scheduling and dispatch, reactive power and voltage control, loss compensation, load following, system protection, and energy imbalance.
A geothermal plant can be engineered to optimize these services. In most geothermal plants built today, operators can increase or decrease the amount of power being generated in order to match load requirements — such as making up for gaps caused by intermittency. Geothermal energy and natural gas play a similar role to the power grid with the capability to dispatch, or to change a facility’s power output by ramping up or down depending on system needs.
Bob Sullivan, VP of Business Development of geothermal company Ormat Technologies, spoke with GEA staff about geothermal energy’s ramping capability and how it fits in to broader energy market discussions.
“Intermittent technologies have created a significant need for flexible power sources and other ancillary values such as frequency control and capacity. You don’t ramp intermittents but you can expeditiously ramp geothermal, and of course you can ramp natural gas,” he says.
“Typically you tend not be able to ramp nuclear power — the little bit we have left — or coal, because their efficiencies go down, their costs go up, and their emissions go up.”
While both geothermal power and natural gas are rampable, there are key differences. Geothermal energy dispatchability is particularly efficient due to:
Geothermal energy’s fuel source is the geothermal fluid. Developers invest upfront when the initial geothermal wells are drilled and then amortized over the life of the project. Gas, oil, and biomass are all examples of a commodity that must be purchased; the U.S. Energy Information Administration (EIA) calculates that geothermal energy’s fixed fuel cost is a key reason its estimated Levelized Cost of Electricity, or cost over the lifetime of a plant, is lower than most other forms of energy. An ICF International report to the Interstate Natural Gas Association of America explains that natural gas has the added complexity of fuel deliveries at specific times each day, with few modifications allowed.
“When a geothermal power plant ramps or flexes its output, there are no negative impacts on plant operational costs or negative environmental impacts,” Sullivan says. “The plant’s conversion of fuel to electricity is completely in the control of the plant operator, and changes to electrical output can occur quickly, with up to 30 percent of nominal output per minute.”
These efficiencies add up to steady geothermal economics, which Heidi Bethel, Public Relations Manager of Ormat, says represent one of the geothermal industry’s little-known benefits. “There seems to be a misconception that natural gas prices are low now and they’re always going to stay low,” she says. “If you look at the trends, historically natural gas prices fluctuate greatly.”
Over the past decade, fuel prices for natural gas varied from $2.79 per thousand cubic feet to $12.41 per thousand cubic feet, according to EIA. Winter 2014 saw an increase in demand that resulted in higher prices of around $6.90 per thousand cubic feet and led California's ISO to issue a state-wide Flex Alert in early February, asking customers to use less energy.