With incentives under the Treasury grant program set to expire at the end of the year, green-power development once again seems to be entering the bust phase of its perennial boom-bust cycle....
Squeezing Energy from A Rock
New geothermal approaches bring massive resources within reach.
Geothermal power occupies a unique niche in the renewable energy market. Geothermal projects provide dispatchable baseload power for much lower rates than most other renewable sources of energy. The catch, of course, is that they’re economically practical only when located near geologic faults and vents, such as occur in Hawaii, California, Iceland and Indonesia.
That might be changing, however. Recent developments might be radically expanding the field of commercially viable geothermal sites in the United States. Namely, several geothermal developers are deploying low-temperature, binary-cycle (closed loop) generators to capture geothermal resources previously considered to be low-quality for economic viability. Plus, at existing oil wells, developers are extracting usable energy at low cost.
With enough of these potential sites located near the grid, utilities soon might have more alternatives to choose from in trying to meet renewable portfolio standards (RPS) mandates, and possibly at lower costs than for wind or solar.
Already a $1.3 billion industry, geothermal power generation accounts for 6 percent of the energy produced in California, 10 percent in Nevada and 25 percent on the Big Island of Hawaii. The overall U.S. installed capacity exceeds 2,800 MW electric, according to the Geothermal Energy Association (GEA), a Washington, D.C.-based trade association. With new technologies and new approaches, the geothermal industry might be reaching a critical heat.
GEA says 45 geothermal projects are being planned or developed in nine Western states with the potential to add 2,000 MW. The U.S. Bureau of Land Management projects that 11 Western states could generate 5,500 MW of geothermal energy from 110 plants by 2015, and go on to produce another 6,600 MW by 2025.
“If we are at five percent geothermal in California now, then one could imagine doubling to 10 percent in five years,” says William Glassley, executive director of the California Geothermal Energy Collaborative in Santa Fe.
And that’s just the beginning. A decade from now, new technologies might cause a massive eruption of geothermal power, opening up 100,000 MW of new geothermal potential.
Most high-grade U.S. geothermal resources—with water temperatures of 200 to 300 degrees Fahrenheit or above—are located in the West, where the energy conversion efficiency runs in the low double-digit range. The most developed of these is the Geysers field in Lake County, Calif., where Calpine Corp. operates 80 miles of steam lines to feed 19 power plants that generate more than 2 percent of California’s electricity. Yet the field is far from tapped out. In May, Vancouver-based Western GeoPower Corp. signed a $500 million power-purchase agreement with the Northern California Power Agency to sell 265,000 megawatt hours a year at a levelized price of $98 per MWh for 20 years. The power will come from a 35-MW geo-thermal plant expected to come online in 2010 at the Geysers field. Similarly, Western GeoPower this spring signed a deal with Pacific Gas & Electric to supply it with 25.5 MW of