On the “Why geothermal energy not getting the respect it deserves?”

Alexander Richter 9 Apr 2009

In a recent article on portfolio.com, it was raised that “there is a limitless amount of energy right under our feet. So why doesn’t geothermal get any respect?”

The article refers to the talks, discussions and company presentations at the recent San Francisco Geothermal Innovation & Investment Conference of March 2009. It raises the all too known questions the industry faces and I thought it valuable to post a few parts from the article.

“What can be done to raise the visibility of geothermal,” asks Curt Robinson of the Geothermal Resources Council somewhat plaintively, “so that the renewable trifecta is solar, wind, and geothermal?”

The hundred geothermal energy executives in the audience murmur their assent. They’re sick of solar and wind getting all the buzz, what with all those glossy magazine layouts of shiny solar panels and iPod-white wind turbines. When the solar industry holds its annual confab, 16,000 people show up and the Governator drops by to give props. Geothermal energy, which taps heat below the earth surface to provide clean, green electricity 24/7—try doing that with a solar farm—gets no respect in their eyes.

But geothermal is getting ready for its close-up. The government stimulus package should help jump-start companies paralyzed by the credit crisis, and the opening of vast tracts of federal land to renewable energy development could deliver gigawatts of geothermal resources. Finally, advances in next-generation technology promise to take geothermal from a niche power play to a mainstream energy source.

There’s good reason why geothermal has maintained a low profile. For one thing, geothermal stations are almost always tucked away in remote corners of the West, and well, they look pretty much like carbon-spewing power plants on the surface—the renewable stuff happens underground.

Then there’s the upfront costs associated with geothermal. Like other forms of renewable energy, geothermal can tap free fuel provided courtesy of Mother Nature. But while solar and developers can figure out on the cheap where the sun shines strongest or the wind blows best, their geothermal counterparts must spend millions of dollars drilling test wells to find hot water reservoirs, taking the chance that they—and their investors—will literally come up dry.

“Drill, drill, drill—that’s what we have to do right now to develop geothermal,” Doug Glasprey, COO of Boise-based U.S. Geothermal, said at the conference, noting that drilling can account for more than half the cost of a geothermal power plant. “But you need $3 million to $4 million a well and then there’s a 30 to 40 percent dry-hole risk. Banks don’t want to take that risk. Power companies don’t want to take that risk.”

Compounding the problem: There’s no General Electric of geothermal, a company well capitalized enough to finance its own projects. Ormat is the nation’s biggest geothermal producer, and it has built just 1,100 megawatts worth of power plants here. The rest of the industry consists of relatively small ventures, many of them Canadian.

The Obama administration’s energy and climate-change policies will help grow geothermal, as will state mandates requiring utilities to obtain a growing percentage of their electricity from renewable sources. But new technologies offer the industry perhaps its best shot at becoming a power player.

Utah-based Raser Technologies, for instance, is building power plants that can tap low-temperature underground springs that aren’t hot enough to fuel standard geothermal stations. The secret sauce is a fluid—invented by old-line tech giant United Technologies—that vaporizes and drives a turbine when exposed to geothermal temperatures as low as 165° F. Conventional geothermal power plants operate most efficiently at temperatures between 400° and 600° F.

“We can significantly increase the amount of power that can be generated by geothermal,” says Raser chairman Kraig Higginson. “We’re taking an extremely low risk in our drilling programs. We can go into a zone between 220° and 300° F where most people won’t go and know we’re going to make power in that area.”

But it is a technology called Enhanced Geothermal Systems (EGS) that has the potential to make geothermal as common as coal by pumping water through hot rocks that are found everywhere beneath the earth. But it’s early days for the technology, and EGS companies face the same capital conundrum as the rest of the industry: Until they build it, investors won’t come.”

Source: Portfolio.com