This week, geothermal industry leaders, congressional staffers and government agencies gathered in Washington, D.C. for the release of the 2013 Annual GEA Industry Update (#GEABriefing2013) and a discussion on how to move the U.S. geothermal industry forward.
The briefing offered an opportunity for an open dialogue despite some challenging industry issues.
Dan Utech, deputy director for energy and climate change at The White House, provided the keynote address and remarked that support within the administration remains strong for geothermal.
He also highlighted some of the technology gains made through Administrative initiatives, including EGS technology implemented at The Geysers. The U.S. Department of Energy invested $6 million in this technology, resulting in a 5 MW equivalent of geothermal steam that is now on its way to commercial production. The White House also supports making the federal production tax credit permanent and refundable, Utech pointed out.
Panelists at the event reviewed how new technologies can help address geothermal risk and expand geothermal power production in the United States. Geothermal Energy Association Executive Director Karl Gawell said: “The geothermal industry can learn from advances in the oil and gas industry to reduce the risk of developing geothermal resources.” Participants noted that technologies developed to expand oil and gas production are already working their way into the geothermal industry, and were optimistic the results would help reduce the risk of geothermal exploration.
Panelists also pointed to a far more efficient regulatory and permitting process for oil and gas, and stressed the need for streamlining the geothermal permitting process as critical for industry growth. It was also noted that bills supporting geothermal energy show continued bi-partisanship, and key congressional staff from both sides of the aisle offered continued encouragement at the event.
“It’s becoming clearer what policies and technologies are needed to move the industry forward. Now it’s largely a question of political will to sustain industry growth and accelerate technological innovation,” Gawell remarked.
The GEA report released at the briefing found that installed geothermal capacity in the United States grew by 5%, or 147.05 MW, since the last annual survey in March 2012. This considerable increase in capacity is part of a larger trend of steady geothermal growth over the past decade, and can be attributed to seven geothermal projects that came online in 2012. GEA also revised its last year’s estimate of total installed capacity upward by 128 MW, bringing current installed U.S. geothermal capacity to 3,386 MW. These numbers are not projections or calculations; they represent real projects that companies are moving toward coming on line.
“The extension of the Production Tax Credit is clearly helpful to the industry,” Gawell noted. The extension of the PTC to January 1, 2014 includes a provision that states projects under construction by that date would quality for the PTC, rather than the previous rule that required projects to be completed and operational. Gawell continued: “But where do we go from there? State and federal policy makers need to be clear that there will be sustained support to expand U.S. geothermal power production beyond this short-term extension of the PTC.”
The forum heard speakers point to future needs to achieve even more dramatic growth, including continued and predictable federal incentives to spur investors to undertake the risk of investing in new geothermal projects. The industry also needs consistent and sustained research support to develop new technology, reduce risk, and spur technological innovation. State renewable standards must recognize the full benefits of geothermal power to their power system reliability and the environment. California, which has been leading the way in its framework of support, is likely to meet its RPS goal early; however, the Golden State needs to push forward, raise its standard, and continue to support the needs of its substantial geothermal energy industry in the state.
In the past year, capacity was installed by five different geothermal companies. U.S. Geothermal brought its San Emidio Repower and Neal Hot Springs plants online in Nevada and Oregon, respectively, while Ormat brought both its Tuscarora and McGinness Hills plants online in Nevada. The Silver State also welcomed the nation’s first co-production plant, developed by ElectraTherm at the Florida Canyon Mine, as well as Terra-Gen Power’s Dixie Valley project. EnergySource’s John L. Featherstone (Hudson Ranch 1) project was the only plant to come online in California, but its 49.9 MW capacity was the highest of any 2012 project.
Speakers also highlighted that geothermal power is no longer just a baseload source, but can provide both firm and flexible power. It can bring the reliability of 24/7 baseload power or complement other energy technologies by firming up more intermittent power generation. It can also provide distributed power generation from small co-production projects re-using oil and gas wells. Since Congress passed the 2005 Energy Policy Act, geothermal power has been growing. In the first decade after EPAct, the U.S. is posed to add 1,000 MW of geothermal power, more than 10 times as much geothermal capacity as during the previous decade. The GEA report indicates that there are over 2,500 MW more that could come online in the next decade.
Doug Glaspey, President & COO, U.S. Geothermal noted: “The equity markets are still very tight, but if you have a good project, you have the wells drilled, you have a resource, and you have a PPA in hand, there’s still money out there to build a project.” During the program, Glaspey said his company’s two projects that came on line this year were 90% made in America, to much applause. Manufacturers of supplies for geothermal energy projects are located in nearly all 50 states. Geothermal energy projects benefit local communities, stimulating their economies.
The Geothermal Energy Association (GEA) is a trade association comprised of U.S. companies who support the expanded use of geothermal energy and are developing geothermal Resources worldwide for electrical power generation and direct-heat uses. GEA advocates for public policies that will promote the development and utilization of geothermal Resources, provides a forum for the industry to discuss issues and problems, encourages research and development to improve geothermal technologies, presents industry views to governmental organizations, provides assistance for the export of geothermal goods and services, compiles statistical data about the geothermal industry, and conducts education and outreach projects. For more information, please visit http://www.geo-energy.org/.