Valuing Geothermal Power: In today's renewable energy market

As states, such as California, move ahead with more aggressive Renewable Portfolio Standards (RPS) and seek to reduce greenhouse gas emissions, state officials are finding they need to consider the full value of the power sources they use.

The RPS places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources. A full understanding of the energy sources available and their inherent benefits are, therefore, important to maximizing clean power. Such a review is critical to ensuring consumers are offered the most affordable overall energy system costs, with a complete understanding of the many different reasons for choosing clean, alternative power sources.

As far as power goes, geothermal provides a uniquely reliable and continuous source of clean energy. As a baseload renewable resource, a geothermal energy plant operates 24 hours a day and seven days a week, regardless of changing weather or the time of day. Unlike burning fossil fuels, geothermal energy has minimal impacts on the environment, as the process emits no greenhouse gases, pollution, or hazardous wastes.

This form of energy is nothing http://new. The very first recorded geothermal power generator was tested back in 1904 in Italy, and successfully lit four light bulbs. By 1911, the world’s first commercial power plant was built there. But the largest group of geothermal power plants in the world is located at The Geysers, a geothermal field in California.

Today, the global geothermal market has approximately 12,000 megawatts (MW) of geothermal capacity on-line. Plus, there are some 1,766 MW of new geothermal capacity in early stages of development, or under construction, in 70 countries and territories around the world. Developers are continuously and actively exploring potential new developments.

To help address any related questions that arise, a new, joint report has been released, entitled “The Values of Geothermal Energy: A Discussion of the Benefits Geothermal Power Provides to the Future US Power System.” The report highlights the values of geothermal in today’s renewable energy market as a viable power source option. 

Key timing
“This is a timely report,” said Karl Gawell, executive director of the Geothermal Energy Association (GEA). “The California PUC recently noted active questions before policy makers in California and elsewhere, specifically: ‘How increasing amounts of intermittent generation are impacting grid reliability, quantifying the impact and benefits of various resources to integrate intermittent generation, and what new policies should be adopted to manage the changing electric grid.’”

As the report indicates, these questions are gaining in importance as the United States expands its renewable power production, which today means, “generating approximately 14% of the electricity” nationwide. Much of this is coming from wind and solar photovoltaic technologies that rely heavily on the prevailing weather conditions in order to generate power.

According to the report, “Geothermal power offers both firm and flexible solutions to the changing US power system by providing a range of services including, but not limited to: baseload, regulation, load following or energy imbalance, spinning reserve, non-spinning reserve, and replacement or supplemental reserve.”

Geothermal’s baseload capacity makes it particularly valuable for replacing retiring fossil fuel facilities. “Geothermal energy is a renewable power source that can provide baseload and flexible power, quickly adjusting to fit the needs set by variable renewable energy technologies,” states the report.  

As the percentage of electricity produced from intermittent sources increases, the stress on an aging power system designed for fossil fuels encourages renewable energy’s role as an important part of the power supply mix.

Looking beyond the benefits to the power system, the report also summarizes other key benefits of geothermal power, including various economic and environmental benefits. For instance, one of the most important economic aspects of geothermal energy is that it’s completely local. It’s generated using indigenous resources, which reduces dependence on imported, environmentally unfriendly energy sources (such as oil). In turn, this also reduces trade deficits.

The industry has positioned itself to grow more by 2020 than ever before. “We are seeing new technology developments move forward, and new projects being announced in every region of the world,” remarked Karl Gawell. “Despite slow growth in the United States, the global market continues to gain steam. So, many American geothermal companies are using their industry know-how in friendlier economic and political climates overseas.”

GEA president Craig Mataczynski of Gradient Resources has challenged the industry this year, to reach a five percent of total US electricity production. To reach this goal it will take advancements in geothermal technology and recognition of the full value of geothermal power.

“As policy makers at the state and federal level move to address global warming and need to achieve significant emissions reductions,” Gawell said, “geothermal power’s unique abilities to replace baseload fossil fuels or firm intermittent resources provides premium value to fulfill state Renewable Portfolio Standard requirements and meet federal environmental standards.”

* Prepared by Ben Matek (Geothermal Energy Association’s industry analyst), and Brian Schmidt (librarian at the Geothermal Resource Council), as a join report by the GEA and the GRC to document the value of geothermal power.

The report is available at http://geo-energy.org/reports/Values of Geothermal Energy Draft Final.pdf   

The Geothermal Energy Association (GEA)
www.geo-energy.org

Geothermal Resources Council (GRC)
www.geothermal.org