Nevada’s geothermal growth making it a leader

Alexander Richter 20 Apr 2009

Nevada's geothermal growth is making it overtake California as the American geothermal energy leader.

An interesting article that recently was published in Nevada, looked at Nevada’s geothermal growth.

For years Nevada has trailed California in total geothermal energy production. But the latest Bureau of Land Management lease sales and industry data indicate Nevada could see a huge boom in geothermal energy production in the next decade.

Today California is still the leader with more than 2,600 megawatts of geothermal energy in production. No. 2 Nevada produces 333 megawatts from geothermal plants. But anticipated growth in production in Nevada is expected to be triple the growth in California. Nevada is expected to produce more than 3,600 megawatts of geothermal energy within 10 years, while California’s production is expected to top out at 2,700 megawatts in that time, American Geothermal Energy Association Executive Director Karl Gawell said at a recent Renewable Energy World conference.

“California used to be clearly the leader,” Gawell said. “That’s flipped today and Nevada is the clear leader in development in every phase.”

On geothermal resource maps, Nevada stands out for the abundance of geothermal resources within its borders. About half the state is covered in geothermal hot spots of varying quality.

“There’s tons of geothermal hot spots in Nevada,” said Lisa Shevenell, director of the Great Basin Center for Geothermal Energy at UNR.

In all, Nevada has more than 630,000 acres of BLM land leased to geothermal developers. In the last land lease sale BLM auctioned off more than 105,000 acres to geothermal developers.

That sale brought Nevada more than $14 million in revenue, with about $7 million more being split between counties where the leases are located. The 2007 lease sale saw 122,848 acres leased to geothermal companies. The development of new plants also provides a boost in drilling and construction jobs

Geothermal plants consistently generate electricity 24 hours a day, seven days a week regardless of weather or other environmental factors. It’s also the cheapest renewable energy option and expected to stay that way for decades, even as other options become cheaper.

Geothermal energy is expected to cost about 7.3 cents per kilowatt hour by 2030 compared to 8.1 cents per kilowatt for wind, 12.5 cents per kilowatt hour for concentrating solar thermal and about 22.9 cents per kilowatt hour for solar photovoltaic, according to the Energy Department.

By contrast, “clean coal” technology is expected to cost 7.6 cents per kilowatt hour by 2030 and advanced natural gas generated electricity is expected to cost 8.6 cents per kilowatt hour.

Geothermal might be cheaper, but it’s also much tougher to develop mostly because of the time it takes to get a plant operating. The process can take from six years to a decade, according to Daniel Fleischmann, project initiation manager for geothermal giant Ormat.

It usually takes about three years just to do resource exploration, lease land and obtain permits for exploratory drilling, Fleischmann told a group of geothermal energy engineers and developers at the conference. That can be stretched out even longer if the mineral rights on the property are shared by several holders or if there are sensitive environmental or cultural issues.

It can be tough to get a geothermal project financed even in a good credit market.

Energy project financing is highly dependent on the power purchase agreements with utilities. But those are much tougher to obtain for geothermal plants because about half the cost of development comes before a site’s resource is fully understood.

Geothermal companies spend tens of thousands of dollars just finding geothermal hot spots. Although the federal government provides basic maps, they aren’t detailed and are far from complete.

“We used to think that we’d found all the wells, and that’s just not true,” Shevenell said. “You can run into new wells just hiking around.”

The companies and geothermal researchers often find new hot spots using satellite remote sensing — looking for certain signatures that point to good geothermal resource.

After obtaining permits, the company then drills an exploratory well to determine the real temperature of the subsurface water.

Developers need financing to do the initial exploratory drilling that will determine the site’s potential. They sometimes have trouble getting that financing unless a utility has signed a power purchase agreement for the final product. Utilities are usually not willing to sign an agreement before they know its potential electric output.

The Great Basin Center for Geothermal Energy at UNR has equipment that can cut the cost of doing geothermal resource siting and is developing new ways of finding geothermal resources using global positioning systems and gravity data. The center helps geothermal companies find new hot spots whenever it can, but its budget limits the amount of work it can do.

The international credit crisis has hit renewable energy projects of all kinds hard in the past eight months.

At least three American geothermal projects have been canceled in the past year, according to Gawell and others who track geothermal development. And development in general has slowed as companies wait to see what incentives the federal government will offer and whether credit will become more readily available.

“Six months ago it was booming. Now? I don’t know,” Shevenell said. “Financing has dried up. A lot of the companies that are still developing in Nevada now are foreign.”

Nonetheless, Nevada’s geothermal energy industry is expected to be a big but quiet winner in the race toward a cleaner American energy industry.

Industry insiders expect the federal government to increase funding for geothermal research and resource mapping under the Obama administration. That would take some of the financial pressure off geothermal developers who now mostly have to evaluate geothermal sites on their own dime.

And innovations such as cheaper resource siting, more efficient generators and modular power plant units are expected to drive down costs and dramatically decrease the build-time on plants.

“The more we can diversify and show people the potential of this technology, the better off the industry will be,” Gawell said.

Source: Las Vegas Sun