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Western U.S. Has 13,000 Megawatts of Near-Term Geothermal Power Potential


NIRS
2006


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 mch 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.

# # # # # #

The full "Geothermal Task Force Report" can be found at:
http://www.westgov.org/wga/initiatives/cdeac/Geothermal-full.pdf
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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