Geothermal

U.S. Geothermal Repowers and Expands in Nevada

Issue 4 and Volume 13.

In the wind-swept desert of northern Nevada, U.S. Geothermal Inc. has set out to rebuild and nearly triple the output of an obsolete 3.6 MW (net) binary power plant, then add a new facility that will increase total production to 35 MW.

Located about 100 miles north of Reno, San Emidio is U.S. Geothermal’s second producing power operation with a proven subterranean reservoir, following its successful startup of the Raft River project in southeastern Idaho. The company is also developing Oregon’s first geothermal power project with a power purchase agreement (PPA) at Neal Hot Springs.

U.S. Geothermal bought the San Emidio project (pictured above with plant manager Butch Mayfield) for $16.6 million in April 2008 from Empire Geothermal LLC and Mike Stewart. According to U.S. Geothermal President and Chief Executive Officer Daniel Kunz, the property has a vintage 3.6 MW (net) Ormat binary power plant built in 1987 and over 2,000 acres of private and U.S. Bureau of Land Management (BLM) geothermal leases. The deal also included more than 5,000 acres of BLM leases and groundwater rights for power plant cooling at nearby Granite Creek.

With two geothermal production wells and several injection wells, the San Emidio power plant provides 2.5 to 3 MW to NV Energy subsidiary Sierra Pacific Power Co. The facility’s output is delivered via a 60 kV intertie under a PPA that is in force until 2017.

When U.S. Geothermal acquired the San Emidio power plant, it was in disrepair and not operating efficiently. Since then, the company has invested nearly $600,000 in repairs and upgrades to the facility and well field, increasing output by one-third with attendant cash flow. “We’ve improved systems at the old power plant for better cooling through the tower, retooled one of the turbines, and improved maintenance standards,” said U.S. Geothermal Chief Operating Officer Doug Glaspey. “And we’ve rebuilt both well field production pumps since we acquired the project.”

A recent independent engineer’s estimate of the geothermal reservoir put likely power production potential at 44 MW. With that knowledge, U.S. Geothermal plans a two-phase, $157-million repower and expansion project at the site, with a new power plant and production wells raising project output to 35 MW (net) by 2013.

The first phase is the repower, with the old power plant replaced by a new, more efficient 8 to 9 MW facility fueled with existing geothermal fluid flow (4,000 gpm at 285° F). “We’ll use the same production and injection wells,” said Glaspey. “Everything will stay essentially the same, except the power plant will be larger.”

The Phase One power plant will be built adjacent to the project’s two existing geothermal production wells, on land purchased from Empire Farms in late 2009. The site hosts a mothballed 90,000 sq. ft. dehydration plant once used for drying onions and garlic with waste heat from the power plant. U.S. Geothermal is currently using the old facility’s office and plans construction storage and shop space for the retired operations buildings.

The new power plant site is quite a distance from the old power plant, so it will stay in operation during construction. “When the new power plant is completed, the company can cut it into the production pipelines in fairly short order,” Glaspey said. “The company plans to start construction in 2010, with startup in the fourth quarter of 2011. We have the advantage of building our new power plant on private property, which makes it a lot faster to permit and start construction.” U.S. Geothermal’s land purchase for the phase one repower project also included 724 acre-feet of groundwater rights, doubling the company’s supply.

“We are going to stay with water cooling at San Emidio,” said Glaspey, “because we own enough water rights and it will make the new power plant more efficient during the hot summer months.”

The company’s second phase expansion will require new production wells for an additional 26 MW of capacity and an upgraded transmission line. The project is slated for startup by the end of 2012, but that depends upon successful well drilling for additional geothermal resources.

In October 2009, the U.S. Department of Energy (DOE) awarded the company $3.77 million in Recovery Act funding for innovative exploration and cost-shared drilling at San Emidio. The work will help the company reduce the number of production wells it needs to substantially increase the resource base for the expansion project, reducing costs.

“Our current production wells at San Emidio intersect a large aperture fracture, which is what we are looking for,” said U.S. Geothermal Vice President-Exploration Bill Teplow.

“We’re using detailed structural analysis and mapping with PSInSAR, a satellite-based technique that measures extremely small difference in ground surface elevations.” Combining that with seismic refraction profiles and numerical processing methodology, the company hopes to image large fractures with enough precision to drill into them.

DOE has released funds from the grant and preliminary geothermal exploration work has begun. Eplow will run his first geophysical surveys over the existing well field, seeking a geologic “signature” that will help him find drilling targets for production wells with surveys of other locations on the property.

A key component for the San Emidio geothermal development project is a PPA for the new electricity it will generate. The company’s current contract with Sierra Pacific runs through 2017 and the utility will get the first 2.5 to 3 MW. Negotiations for a buyer of the balance up to 35 MW are underway. The company expects to have a PPA in place by fall of 2010.

Ted J. Clutter is a former Executive Director of the Geothermal Resources Council. He can be reached at [email protected]