WASHINGTON D.C. — The U.S. geothermal industry’s recent innovations contribute to increasing potential for the use of geothermal to power the renewable energy future, but high upfront risks and costs of development are one reason geothermal needs federal funding programs to expand.
“Federal and state incentives help attract investors to geothermal projects, and are essential to overcoming the obstacles facing the industry today. But, with continued growth and innovation, the cost and risk of projects should decline as the industry expands and technology improves,” according to Geothermal Energy Association (GEA) Executive Director Karl Gawell.
The 2005 Energy Policy Act provided new geothermal power plants the same tax incentive as wind projects: US$ 0.02 per kilowatt hour produced during each of the first ten years of production.
Well-known in the geothermal world is a report from the Massachusetts Institute of Technology (MIT) conducted in 2006, which arguably helped to usher in a focus on research for EGS. “The Future of Geothermal Energy, Impact of Enhanced Geothermal Systems for the 21st Century” stated that EGS could provide the United States with about 100 gigawatt-equivalent of domestic capacity in the next 50 years.
Also of note was a 2010 workshop on “Exploration and Assessment of Geothermal Resources” in which The Great Basin Center for Geothermal Energy (GBCGE), the DOE Geothermal Technology Program office (DOE-GTP) and the GEA invited geothermal professionals to discuss the state of knowledge of exploration for geothermal resources. The discussion revolved around exploration techniques in areas of Geology and Structure, Geophysics, Remote Sensing, Geochemistry, Temperature Distribution, and Reservoir Characterization.
An understanding of geology is essential to the development process. In Part 1 of this two-part look at geothermal technologies, the Geothermal Energy Association (GEA) examined some of the techniques and tools that are facilitating progress in geological testing and analysis for conventional and EGS geothermal projects.
Against this backdrop, GEA asked how DOE-funded geothermal projects are doing in a Q&A with the Department’s Geothermal Technologies Program’s Team Lead for Hydrothermal & Resource Confirmation Hildigunnur Thorsteinsson:
GEA: From DOE’s standpoint, what advancements have been made in EGS since the MIT Report and why is EGS a big part of the portfolio in advancing geothermal technologies?
DOE: “At the Department, we see geothermal energy, all the way from conventional hydrothermal resources to EGS, as an important part of an all-of-the-above energy strategy that develops every available source of American energy.
“While EGS has great potential to provide a large, clean, baseload, energy resource it can also help facilitate geothermal development outside of traditional hydrothermal areas in the western United States by extending geothermal energy production to additional areas in the country.
“Building off the findings of the MIT study, we have worked with industry and university partners to enhance our understanding of the subsurface through advanced modeling and simulation methods.
“Energy Department research in safe, efficient stimulation and monitoring methods has helped advance a number of EGS demonstration projects. For example, through a DOE funded EGS demonstration project, Calpine was able to successfully create a new EGS reservoir by increasing permeability and connecting multiple wells in the north-west part of The Geysers field.
“In addition, the DOE-funded AltaRock EGS demonstration is scheduled to initiate stimulation at their innovative EGS demonstration project in Oregon.”
The projects that GTP accepts in its funding programs represent some of the some of the most creative geothermal innovations happening today to help bring the industry on a competitive track with other alternative energy options.
The Department’s broader efforts for geothermal are to lower its development costs and reduce the technical and market barriers to increased production in the United States, Thorsteinsson told GEA.
“Removing these barriers will ultimately strengthen the economic viability of geothermal development, and help provide a clean, renewable and reliable baseload resource for American homes and businesses,” Thorsteinsson said.
GEA: How will current GTP projects help to mitigate costs for the industry at large?
DOE: “The Geothermal Technologies Program is supporting a variety of projects aimed at prudently, safely and cost-effectively developing geothermal resources in the United States. As an example, we have supported research on the viability of using small-diameter core holes rather than full-diameter wells as exploration holes. This research is now paying significant dividends in the industry, helping to lower exploration and drilling costs for U.S. geothermal developers.
“Today, the Department is investing in several promising technologies to help further reduce costs,” she added. “For example, we are supporting an R&D project on percussive drilling technology that has the potential to significantly increase the rate of penetration in wells. This technology has been used with great success in mining and the project team is looking at ways to adapt the technology to the downhole environment of a geothermal well.”
Small-diameter core holes and percussive drilling technology are just two areas of further research being carried out by DOE partners.
Thorsteinsson hailed the work of James Faulds of the University of Nevada-Reno. “At the recent Geothermal Resource Council meeting in Reno, our office recognized [Faulds] with the 2012 Peer Review Excellence Award for his team’s great work in characterizing structural controls of Enhanced Geothermal Systems (EGS) and conventional geothermal reservoirs.
“We look forward to working with our industry, national laboratory and university partners to continue these important research and demonstration projects,” she said.
Faulds is halfway through work on “Characterizing Structural Controls of EGS and Conventional Geothermal Reservoirs,” which won a $1 million DOE award to characterize geothermal potential at nearly 500 sites throughout the Great Basin. “We want to help the industry achieve acceptable levels of site-selection risk ahead of expensive drilling,” Faulds was quoted on the university’s news site.
Thorsteinsson said, “The University of Nevada-Reno team is conducting important research to help characterize structural controls of EGS and conventional hydrothermal reservoirs, strengthening our modeling capabilities and helping identify new resources at a lower cost.
“Over the past year, this team has defined an array of favorable structural settings for geothermal systems and has completed a preliminary catalogue of structural settings for Great Basin systems,” Thorsteinsson added. “As the project continues, we look forward to furthering our understanding of structural controls and models for a range of geothermal activities.”
Reporting on their 2010 exploration and assessment workshop, GBCGE, GTP and GEA found more work is needed on detailed structural models in the Great Basin and beyond, such as the Cascades, Rio Grande Rift, Snake River, and Imperial Valley. Fault control of fractures and permeability are key features that need to be particularly understood, they found.
“What Jim Faulds brings to the table is a great understanding of structural geology and structural styles in geothermal systems, helping to identify, for example, zones of tension and associated permeability between fault strands,” said Ann Robertson-Tait in a recent conversation with GEA. Robertson-Tait is a geologist and the Business Development Manager for GeothermEx, a long-established geothermal consultancy that is now part of Schlumberger, the global oilfield services company.
Geothermal fluid flow along faults is a concept that has been around for a long time, based on the common observation that hot springs are located along or near fault traces. “The idea was that the fluid was rising from great depths all the way to the surface along a fault plane, but that model has been fairly well shot down in all but a few cases,” Robertson-Tait said. “There is clearly a relationship between faults and hot springs, but this is a relatively shallow phenomenon. What’s more important to geothermal developers are the controls on permeability and fluid flow at depth. These controls are more complicated to resolve, and often involve a combination of permeable stratigraphic horizons and faulting.”
Developing Fracture Networks in Nevada
Brady’s Hot Springs in Nevada is a good example. “The hot springs in this field are clearly occurring along a fault trace,” Robertson-Tait noted. Ormat Nevada Inc., the operator of the Brady’s geothermal project, is the recipient of DOE funding at this field for an EGS project aimed at improving permeability in one or two marginal wells. In the course of this project, Ormat has worked with Jim Faulds, GeothermEx and others to reinterpret the geology. “This work has revealed that localized extension has created a series of faults, each with relatively small offset, creating a stretched-out zone of permeability. This work has changed the conceptual model of the Brady’s field,” according to Robertson-Tait.
DOE has provided a $3.4 million grant for work on developing fracture networks at Brady’s, which has a stress environment and rock formations that are favorable for permeability enhancements. The Brady’s site is located near Ormat’s Desert Peak geothermal project, which has also received DOE-funding for well improvements using EGS techniques.
An interactive, real-time map of seismic activity at Desert Peak and Brady’s Hot Springs is viewable on the Lawrence Berkeley National Laboratory (LBNL)’s Earth Sciences Web site.
Predicting Permeability at LBNL
LBNL‘s Energy Resources Program enables geothermal energy development research. The LBNL program looks to reduce uncertainties associated with finding, characterizing, and evaluating geothermal resources. The program seeks to significantly increase production of geothermal resources through understanding the development and enhancement of permeability and fluid flow for EGS, according to its Web site.
The LBNL is developing a reliable system to help predict reservoir temperatures through its DOE-funded “Integrated Chemical Geothermometry System for Geothermal Exploration” project. The goal is to enable prediction of geothermal reservoir temperatures using chemical analyses of spring and well fluids.
Scientists can then “leverage geochemical data from multiple locations, aimed at providing a more reliable assessment of target reservoir temperature over traditional chemical geothermometers,” Thorsteinsson said. “By enhancing our ability to assess reservoir temperatures, this research is helping industry better understand resource potential and reduce the costs of project development.”
Robertson-Tait said that the chemical and geomechanical elements of numerical modeling codes are important, especially for EGS. While the codes are now becoming available largely out of the National Labs, there are also commercial codes that have these capabilities. “Many of these codes handle issues that are particularly important in EGS, and I think that’s a good development. DOE funding to the National Labs has gone a long way, and there are commercial codes too, an atmosphere that combines research and competition.”
GEA: What other innovations look promising?
DOE: “Across our different projects, the Department’s Geothermal Technologies Program is helping to conduct research and develop new technologies that reduce the cost of geothermal energy development and improve the efficiency of operations. This R&D has not only advanced more cost-effective and innovative production technologies that are being used in the field today, but also sophisticated resource characterization and protective environmental practices that are building a sustainable industry for decades to come.
“Throughout this work, we continue to look for new ways to lower costs and improve operations. For example, we conduct a technology road-mapping exercises to determine the most promising technical pathways for producing geothermal energy, including developing advanced geophysics and geochemistry tools and leveraging remote sensing.”
DOE’s roadmapping efforts should speed the permitting process for potential awardees, improve project costs, and lessen investor risk.
Additionally, the DOE’s new Transparent Cost Database contains thousands of estimates from more than 100 published studies and DOE program-planning or budget documents, part of ongoing road-mapping efforts for various technologies.
GEA: How are geothermal technologies similar to oil and gas technologies, and how are they different? How does this help or hurt the industry?
DOE: “Many of the technologies and tool advancements made in the oil and gas industry can be beneficial to the geothermal community; equally, technology developments and discoveries made in geothermal can often be used in oil and gas. In fact, early research at the Department of Energy on directional drilling and drill bit technologies is now used in both the geothermal and natural gas industries.
“However, geothermal environments typically have higher temperatures and harder rock than traditional oil and gas plays, so we are partnering with industry to develop new technologies that can operate effectively and safely in this unique environment.”
The 2010 exploration and assessment workshop reported that exploration system models are in the earliest stages of development, where mining or oil and gas were 50 or more years ago.
Funding for Geothermal Technologies: 2006-?
Congressional representatives may not know the exact differences between producing oil and producing geothermal, but a looming expiration date exists on federal tax incentives. While geoanalysts do their part to decipher charts and readings, short-term expiration dates on tax credits translates to bad timing for geothermal plants that take as much as four to eight years to reach commercial operations. Some of the steepest hurdles faced by developers aren’t in the desert hills but on Capitol Hill.
In “What Would Jefferson Do?,” a 2011 DBL Investors report, Nancy Pfund and Ben Healey wrote (PDF) that average annual support for the oil and gas industry has been $4.86 billion from 1918 to 2009, compared to $3.5 billion for nuclear from 1947 to 1999 and $0.37 billion for renewable energy between 1994 and 2009.
Still, innovation is happening on the Hill to some degree, and geothermal developers have made enormous strides with the incentives they have had for about six years. Geothermal projects completed since the passing of the 2005 Energy Policy Act include: new flash power plants; re-developed flash power plants; expansion of hybrid geo power plant; new solar/geothermal hybrid plant; binary (ORC) power plants; distributed power generation with building heating system; and co-produced power from oil/gas wells.
As the geothermal industry follows its trajectory of evolution, and if federal support continues for indigenous, reliable energy sources, this list is bound to grow in the coming years.
Lead image: Geothermal energy via Shutterstock