Geothermal energy on the grow in 2009

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January 26, 2010 – In 2009, geothermal energy appeared to be on a launch trajectory. Six new geothermal plants came on line in the United States and another 144 were under development, raising the prospects of 10 GW of geothermal power in coming years. Geothermal power projects were being developed at an accelerating rate, despite the economic recession. 

Power technologies for both utility-scale electric generation and decentralized self- generation both moved forward, and new applications seeking to generate power from oil and gas fields saw multiple new projects. Also, with DOE support, the U.S. took major steps to launch a research effort to develop enhanced geothermal systems technology.  

Federal and state policies for renewable energy production, tax incentives, leasing and permitting and research have all been fundamental to geothermal development; and in 2009 there were major, positive new developments in all of these areas.

The outlook for 2010 is for even stronger growth in the industry, continued progress with new technology, and even greater priority from federal and state policymakers as they tackle the challenge of the 21st century – global warming. As 2009 comes to a close, these new projects, new policies and new technologies all point to dynamic growth for geothermal energy in the U.S. in coming years. 

Total online geothermal power grows 6 percent despite recession

Six new geothermal projects came on line in 2009, representing growth of U.S. geothermal power capacity of about 6 percent. Together, these projects mean 176.68 MW placed in service in 2009. They represent an investment of roughly $800 million, 750 full time jobs, and 2,827 jobs related to project construction, drilling and manufacturing, according to GEA research data.

New projects in 2009 include Ormat North Brawley in California (50 MW), Geothermal Blue Mtn I in Nevada (49.5 MW) and Enel NA Still Water in Nevada (47.3 MW)

The total on-line capacity of geothermal power in the U.S. was 3,152.72 MW as of August 2009.

New geothermal projects accelerate

The on-line geothermal power added in 2009 marks the beginning of an accelerating growth in new projects, making it a take-off year for a new era of geothermal growth. The projects underway in 2009 will make up to 140 MW of new geothermal power in fourteen states.  

With geothermal projects taking 3—5 years to develop, the continued growth in new projects under development portended accelerating power production in years ahead.

New projects could collectively surpass 7,000 MW of baseload geothermal power, bringing U.S. total geothermal power capacity to 10 GW. That would be enough geothermal capacity to supply about 25 percent of California’s total electric power needs in 2008 – enough generating capacity to supply the power needs of about 10 million people.

There were 132 new geothermal projects under development at the end of 2009, twice as many as GEA identified two years before.

Geothermal energy’s range of technology options grows

Geothermal energy has historically been used for electricity production and commercial, industrial, and residential direct heating purposes. Recent years have seen growth in efficient home heating and cooling through geothermal heat pumps.

In 2009, the U.S. also took major steps towards the lead in advanced geothermal technology through investment in Enhanced Geothermal Systems (EGS). Additionally, inaugurated this year were two projects that would utilize hot water produced by oil and gas wells to produce geothermal power – located in Louisiana and Mississippi, these are the first geothermal power production projects for these states.

These oil field co-production projects are two of the five projects now underway in the U.S. utilizing geothermal hydrocarbon co-production: Jay Oil Field in Florida, expected to generate between 200 kW and 1 MW; Rocky Mountain Oil Test Center in Wyoming; GCGE Oil Co-production in Mississippi, expected to generate 50 kWh; GCGE Natural Gas Co-production in Louisiana, 50 kWh; and Florida Canyon Mine in Nevada.

Researchers at Southern Methodist University believe that oil field co-production can become an important source of power. They have identified potential areas for similar development that could bring thousands of megawatts of new power on line.

The U.S. Department of Energy (DOE) has invested more than $5 million in a demonstration project for EGS at Desert Peak, Nevada. This first commercial EGS operation will increase the plant’s capacity by 5 MW. DOE has selected other EGS projects for federal funding as well.

Expanded federal and state policies fuel geothermal growth

The stunning progress of the geothermal industry this year has been propelled by state and federal policies. The keys to geothermal development established over past years have been (1) state renewable energy standards that provide growing markets for renewable power, (2) federal tax credits and incentives which attract investors and bring down the upfront costs of projects, (3) federal and state land availability, which means active and timely leasing and permitting programs, and (4) research, development, and deployment support from the DOE. Key policy developments in 2009 that underpin geothermal progress addressed all four of these areas.

On the state level, the two largest markets for geothermal energy are California and Nevada. In 2009, California increased its renewable standard to 33 percent by 2020. Nevada has extended its renewable energy standard to 25 percent by 2025.

Utilities are looking to geothermal energy to fill these needs. In California, one new project came on line in 2009 with a 50 MW capacity, and 37 geothermal projects are underway with a combined capacity of 1841.8—2435.8 MW.

In Nevada, three new power plants with a total online capacity of 115.4 MW were added; 64 projects are underway for another 1876.4—3473.4 MW. Developments in these states are an example that others are following.

Early 2009 saw a move by Congress to extend the production tax credit for new geothermal plants until 2013, extended to certain geothermal projects a 30 percent investment tax credit, and made available to certain geothermal projects a cash grant in lieu of the 30 percent ITC.

Together these are powerful financial incentives whose impact will be felt over the next few years, reminiscent of trends after a 2005 decision to extend the production tax credit to geothermal energy (it was previously only available to wind projects). 

In addition, the DOE this year opened its loan program for innovative technologies to geothermal technology and Congress created a new DOE loan guarantee program for renewable projects using commercial technology. These loan guarantee programs are particularly valuable and needed given the tight financial markets in the U.S. and around the world.

In July of this year, the BLM held a sale involving lands in Nevada, California and Utah, which resulted in the sale of 255,355 acres of land and total revenue of about $9 million. 

The geothermal lease sales held by the BLM over the past year were made possible by a major Programmatic EIS for Geothermal Leasing in the Western United States completed in October 2008 by the Department of the Interior and the U.S. Forest Service.

Prior to that EIS, 190 million acres of potential lands had been unavailable simply because BLM had not conducted the necessary reviews; by the end of 2009, BLM had over 1.2 million acres under lease for geothermal power development.

Research, development and deployment support at DOE is managed through their Geothermal Technologies Program, a program crucial to the industry that had been a matter of concern since the Bush Administration proposed to terminate the program in 2006.

 

 

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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