Factoid 16: Western Geothermal Potential

Posted on Dec 22, 2007 in Factoids | 0 comments

Western U.S. has 13,000MW of Near-Term Geothermal Power Potential

In January 2006, the Western Governors’ Association released its 67-page “Geothermal Task Force Report.”

The Geothermal Task Force is one of eight that comprise the Western Governors’ Association (WGA) Clean and Diversified Energy Advisory Committee (CDEAC). It was created to review the geothermal resources of the states in the Western Governors’ Association region.

Towards that end, on July 25, 2005, two-dozen members of the geothermal community met in Reno, Nevada, to assess the potential for commercial development of roughly 140 known geothermal sites.

The Task Force also estimated the economics of developing these sites for commercial power production for projects that could be on-line in a timeframe extending to 2015.

Finally, the Task Force compiled a profile of recommendations for interstate policy and regulatory frameworks to induce RENEWABLE ENERGY development in the western states by 2015.

The conclusions of the Task Force include:

Although geothermal power plants have been producing electricity for decades, only a small fraction of geothermal potential has been tapped. With new technology and rising energy costs, geothermal resources that historically have not been economical to develop will become increasingly more attractive to investors and utilities. New geothermal technologies for direct use, such as for greenhouses, district heating, and fish farms, can also play an important role in reducing a community’s overall need for other energy supplies.

The western states share a CAPACITY of almost 13,000 megawatts (MW) of GEOTHERMAL ENERGY that can be developed on specific sites within a reasonable timeframe (e.g., by 2025). Geothermal power plants, ranging from 10 to over 200 MW (depending on the resource), can supply enough electricity to meet the needs of 10,000 to 200,00 homes respectively.

Of these, 5,600 MW are considered by the geothermal industry to be viable for commercial development within the next ten years; i.e., by about 2015. (To put this into perspective, the U.S. had 2,828 MW of geothermal power capacity on-line in 2005.) This is a commercially achievable capacity for new generation and does not include the much larger potential of unknown, undiscovered resources.

The 5,600 MW is estimated to be developable at busbar costs in a range of levelized costs of energy (LCOE) of about 5.3 to 7.9 cents per KILOWATT-HOUR (kWh). This assumes commercial project financing conditions and the extension of a production tax credit (PTC) consistent with current federal law. Lacking a PTC t catalyze renewable energy development, LCOE values would be 2.3 cents per KILOWATT-hour higher.

The state-by-state capacity subtotals are provided below. Numbers in (parenthesis) reflect the number of sites in each state.

State Capacity (MW)
Alaska (3) 20
Arizona (2) 20
California (25) 2,400
Colorado (9) 20
Hawaii (3) 70
Idaho (6) 860
Nevada (63) 1,500
New Mexico (6) 80
Oregon (11) 380
Utah (5) 230
Washington (5) 50

TOTAL 5,630 MW

Data for Kansas, Montana, Nebraska, North Dakota, South Dakota, Texas, and Wyoming has not yet been analyzed but will be added.

New geothermal power capacity of 5,600 MW could add 9,580 new full-time jobs from geothermal power facilities, and also generate an additional 36,064 person-years of construction and manufacturing employment. An economic multiplier effect would increase these numbers further.

New power facilities would also increase state and local tax and royalty income. For example, in 2003, the Geysers Geothermal Field in California, with almost 1,000 MW of geothermal power generation capacity in place, paid $11 million in property taxes to two counties, while royalty venues added several million dollars more to state and county revenues.

If actual future markets sustain energy costs up to 20 cents per kilowatt-hour or the risk and cost of development is reduced substantially, the Task Force estimates that know resources could support new capacity of about 13,000 MW.

The Task Force goes on to note that geothermal power is a reliable, continuously available (24 hours/day – 7 days/week) baseload energy source. Except for short outages to repair equipment and conduct overhauls every few years, geothermal facilities have very high availability and capacity factors; they typically operate 90 to 98 percent of the time. Geothermal’s high reliability compares favorably to conventional power plants.

Moreover, geothermal energy is one of the cleanest resources for generating electricity. Compared to FOSSIL FUELS, geothermal utilizes less land, consumes and discharges less water, has fewer air emissions, and generates fewer wastes. Geothermal particularly stands out when the relative air emissions from geothermal plants and fossil fuel plans are compared. In contrast to fossil fuel plants, geothermal plants only emit small amounts, if any, of CARBON DIOXIDE, particulate matter, sulfur dioxides, and nitrogen oxides. Standing as a testament to this point, the air basin downwind of the largest geothermal field in the world, The Geysers, is the only air district in California to be in attainment with all federal and state ambient air quality standards for over 18 years.

To tap the potential described by the Task Force, its members outlined a series of priority policy proposals.

MARKET DEVELOPMENT:

The marketplace needs to support the continued development of geothermal resources.

1.) Federal and state TAX CREDITS are important to reduce the risk and high capital cost of new projects. The federal production tax credit (and clean renewable bonding authority) should be made permanent, or at least extended ten years.

2.) State laws and regulations should promote a continuing series of opportunities for power purchase agreements between developers and utilities. Whether generated through Renewable Portfolio Standards, Integrated Resource Planning, or other mechanisms, power purchase contracts are fundamental drivers of the market.

3.) Federal and state law and regulations should provide incentives for utilities and others to enter into long-term contracts for renewable power. Accounting and regulatory standards should treat renewable power contracts as benefits instead of liabilities, and power purchase contracts should have he backing of the government to ensure their credit worthiness.

TIMELY PERMITTING AND ENVIRONMENTAL REVIEWS:

Geothermal projects should be prioritized to ensure that permitting, leasing, and environmental reviews are completed in a timely and efficient manner.

1.) Federal, state, and local agencies should coordinate resources and requirements. Agencies should be designated to take the lead on specific issues to avoid duplication, and once issues are resolved, they should not be revisited without cause.

2.) A critical path for new projects should be defined as part of this cooperative effort, and timeframes for key agency decisions along the pathway should be established.

TRANSMISSION ACESS AND ADEQUACY:

The Western Governors should lead the process to ensure that adequate transmission is available for the identified resources.

1.) There should be consistent Western state policies on inter-connection to the grid that facilitate new geothermal (and other renewable) power development.

2.) A fee to support the cost of new transmission could be set that would spread the cost across all states, parties, and technologies on a capacity basis.

3.) Both inter- and intra-state transmission is needed to support the identified resources and should be fast-tracked for permitting and environmental reviews.

FEDERAL PROGRAM SUPPORT:

Continuing support from key federal agencies is needed to achieve the 2015 goals. Federal programs should be coordinated with state agencies.

1.) As the National Research Council concluded in its study “Renewable Power Pathways, 2000”, given the enormous potential of the resource base, geothermal research by the U.S. Department of Energy should be increased, particularly into technologies that can reduce risk, reduce costs, or expand the accessible resource base.

2.) Better resource information is needed. The USGS’ new resource assessment and DOE’s cost-shared drilling and exploration technology efforts should be priorities.

The U.S. Department of Energy’s “GeoPowering the West” initiative should continue to support state and local governments, Indiana Tribes, and other seeking to utilize the West’s untapped geothermal resources.

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The full “Geothermal Task Force Report” can be found here.

The CDEAC will review this report as well as all the other subcommittees’ final reports, and develop a comprehensive set of recommendations for the Governors to consider at their June 2006 Annual Meeting.

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