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The Environmental and Energy Study Institute (EESI) and Geothermal Energy Association (GEA) held a briefing highlighting the state of the geothermal energy industry and its near-term prospects in the United States and in more than 80 other countries working to expand its use. With demand for clean energy accelerating around the globe, geothermal energy has major potential as a renewable resource that can provide power around-the-clock, complementing intermittent renewable power technologies. The International Renewable Energy Agency (IRENA) launched the Global Geothermal Alliance at COP-21 in Paris this past December to achieve a 500 percent increase in global installed capacity for geothermal power generation and a 200 percent increase in geothermal heating by 2030.
Global market demand for geothermal development has been growing faster than U.S. demand due to support from Power Africa, the World Bank, IRENA and other multilateral organizations. Kenya now produces 51 percent of its electricity from geothermal sources, and with the formation of the Global Geothermal Alliance, many countries are investing in the expansion of their geothermal programs.
While growth has been slow, the potential for geothermal energy in the United States is significant. The U.S. Geological Survey estimates that in 13 western states alone there could be up to 73,286 megawatts (MW) of geothermal resources yet to be discovered. Should these geothermal-rich areas be harnessed, tens of thousands of U.S. jobs would be created. Geothermal plants in states such as California, Nevada, Utah, Hawaii, and Oregon, directly employ about 1.17 permanent workers per MW. This is a considerably higher employment rate than coal plants, which employ approximately 0.18 permanent workers per MW.
Ryan Mulvenon, Policy Advisor, Office of Senator Harry Reid (D-NV)
- Developing clean energy, and geothermal energy specifically, has been a classic test of willpower; companies have had to overcome multiple obstacles.
- Government, both at the federal and state levels, can help companies overcome those obstacles. It has to create the right conditions for businesses to invest in geothermal.
- Senator Reid is confident that we will have the willpower to succeed in promoting geothermal energy. He is especially enthusiastic about the Department of Energy's FORGE Project (Frontier Observatory for Research in Geothermal Energy). There is a dedicated site where geothermal system technologies and techniques are researched and developed.
- Senator Reid is committed to getting a "fix" for geothermal's exclusion from renewable tax extender provisions.
Sakari Oksanen, Deputy Director-General, International Renewable Energy Agency (IRENA)
- IRENA is an intergovernmental organization that has a clear mandate: support countries in their transition to renewable energy.
- It looks at the full spectrum of renewables: bioenergy, geothermal, solar, wind, etc.
- It provides information and data (statistics, analysis, databases) which are freely accessible to all.
- It provides technical assistance and services to developing countries. It has worked directly with at least 90 countries and provided renewable readiness assessments for 20 countries. It is supporting 30-40 projects in eastern Africa, a region with great geothermal potential.
- IRENA has developed Project Navigator, with tools and templates to develop bankable renewable energy project proposals. IRENA acts as a fund manager, and $144 million have already been granted.
- For geothermal energy, IRENA is supporting a 10-15 MW geothermal plant in St. Vincent and the Grenadines and a 5 MW plant in Iran (Mount Sabalan). It is also developing regional geothermal capacity-building initiatives, in particular in the Andes, with financial, regulatory, and technology workshops. A similar initiative is under preparation for the Pacific.
- The Global Geothermal Alliance was launched in December 2015 (during COP21 in Paris) to increase geothermal energy in the world’s energy mix. It includes 40 countries and 26 implementation partners, including 3 industry partners and 6 academic/research institutions. The U.S. government and the U.S. Geothermal Energy Association are both involved.
- The Alliance will provide customized technical assistance, advisory support, capacity building, and outreach and advocacy. The action plan will be finalized this spring, and may go into operation during the second half of this year.
Meseret Zemedkun, Project Manager, African Rift Geothermal Development Facility (ARGeo), Regional Office for Africa (ROA), United Nations Environment Programme
- Geothermal energy contributes to social and economic development in Africa, which is undergoing a sustained period of economic growth and transformation. Opportunities exist for Africa to realize the economic growth and increased living standards that go hand in hand with access to modern energy sources.
- There is still an energy access gap, especially in sub-Saharan Africa, and an energy investment gap.
- Africa has plenty of energy potential, including 20 gigawatts-worth of geothermal energy. The continent is seeking to accelerate the growth of energy markets, technologies, and services.
- Several organizations and initiatives can help Africa reach its potential:
- Increased national and regional-level policy commitments.
- Climate-related financing
- Emerging financiers (e.g BRICS)
- Various global, continental, and regional energy programs/projects (Sustainable Energy for All, US Power Africa, ARGeo, Geothermal Risk Mitigation Facility, etc.)
- The United Nations Environment Programme (UNEP) has a key role to play. It is the lead organization within the U.N. system charged with coordinating environmental matters. It builds capacity by producing assessment reports and technical guidelines; it works on climate change mitigation and addressing the environmental consequences of energy production and use; it provides policy advice; and it catalyzes public and private finance.
- The Regional African Rift Geothermal Project is funded by the Global Environment Facility (GEF). The Rift valley, a major tectonic structure, presents remarkable geothermal potential, estimated at 20 gigawatts. The project's target countries are Eritrea, Ethiopia, Kenya, Rwanda, Tanzania, and Uganda.
- Currently, 600 megawatts of geothermal energy are being generated in eastern Africa, mainly in Kenya (followed by Ethiopia).
- Governments in the region are committed to developing their geothermal resources, and to enacting policies that will attract private developers.
- ARGeo is helping by mitigating the risks associated with resource exploration. It provides:
- Technical Assistance for Surface Studies
- Regional networking, information systems
- Awareness creation
- Capacity building
- Policy advice
- The first two GEF-ARGeo backed projects were completed in Kenya and in Tendaho in Ethiopia.
Benjamin Matek, Industry Analyst & Research Projects Manager, Geothermal Energy Association (GEA)
- The Geothermal Energy Association includes 150 companies that work 80 percent of the global geothermal market (in 60 countries).
- GEA just released its 2016 Annual U.S. & Global Geothermal Power Production Report.
- Global geothermal energy capacity has exceeded GEA's forecasts in 2013 and 2014.
- Currently, there are about 13.3 gigawatts (GW) of geothermal energy capacity throughout the world.
- Plants now under construction would bring total capacity to 14.8 GW by 2021.
- Governments and companies have announced projects that would raise total capacity even higher, to 18.3 GW by 2021.
- The Global Geothermal Alliance's goal is to expand geothermal power six-fold by 2030. This would still represent only about a quarter of total world hydrothermal geothermal potential, which is estimated at 200 GW.
- Including other, newer forms of geothermal power generation would increase that potential by 5, 6, or even 8 times (1,000 – 1,600 GW).
- New technologies, such as single flash, triple flash, and binary, are growing rapidly.
- Geothermal energy is not just limited to the western United States. There is geothermal potential throughout the country.
- Currently, geothermal energy capacity in the United States is about 3.7 gigawatts.
- Federal and state policies have a clear impact on the U.S. geothermal industry. The Public Utility Regulatory Policies Act (PURPA) of 1978, in particular, set off a huge expansion of the industry.
- Geothermal energy projects carry a lot of upfront risk and costs: drilling is expensive and may come up short.
- Policy incentives that work best for geothermal energy are ones that reduce upfront risk during the early stages of a project (an example of such an incentive is the ITC, investment tax credit). Uncertainty and short horizons are bad for business: incentives should be guaranteed over several years.
- Geothermal energy does not benefit from the same incentives that are accorded to solar and wind energy. This has led to several stalled projects, particularly in California (the Geysers, Mono Country…), where the incentives for geothermal are asymmetrical to those for solar and wind. There is no recognition of the baseload and other positive attributes provided by geothermal.
Doug Glaspey, President and COO, U.S. Geothermal Inc.
- U.S. Geothermal, Inc., runs three geothermal plants in the United States (Neal Hot Springs in Oregon, 22 MW; Raft River in Idaho, 13 MW; and San Emidio in Nevada, 10 MW). It has several projects in the pipeline, including a 25 MW plant in Guatemala, which is at an advanced stage. Three U.S. projects are at an advanced stage (a 30 MW plant in Geysers, CA; a 10 MW plant in Emidio, NV; and a 25 MW plant in Crescent Valley, NV).
- The Geothermal energy industry is facing many obstacles In the United States.
- The electricity market is in decline. The amount of power sold in 2015 declined by 1 percent compared to 2014.
- Government incentives are short term and unreliable, making it difficult for the industry to plan ahead.
- Permitting, especially on federal lands (where most of the geothermal resources are), is slow and expensive.
- The exploration risk is borne exclusively by the developer.
- There are many low-cost energy options
- Internationally, however, perspectives are much brighter:
- There is a growing load, and an expanding grid.
- There are larger, higher temperature resources.
- Development is supported by country incentives, the World Bank, other international funds and U.S. development assistance.
- Permitting is relatively fast.
- The exploration cost is borne by others.
- But it's not all bad news on the U.S. front. The United States benefits from:
- A well-developed transmission infrastructure
- An experienced workforce
- A large drilling industry
- State-level Renewable Portfolio Standards (RPS).
- The federal Investment Tax Credit (ITC) of 30 percent would be very helpful, if it is extended to a reasonable period (such as five years).
- There are many excellent reasons to invest in geothermal energy:
- It provides reliable baseload power and so is a direct replacement for coal or nuclear energy.
- Being baseload, it doesn't require storage or firming capacity.
- It provides grid stability.
- It has the highest job density of any utility-scale renewable.
- It has the smallest footprint and visual impact of any utility-scale renewable.
- It has the smallest impact on wildlife of any utility-scale renewable.
Jack Thirolf, Director of Regulatory Affairs, ENEL Green Power
- ENEL is one of the world's largest electric utilities. Based in Rome, it has operations throughout the world. It has decided to focus its investments on renewable energy, to the tune of 7.7 billion euros in capital expenditure (vs. 1.6 billion euros in conventional generation). Decarbonization fits in with the company's bottom-line.
- In North America, it has over 100 power plants throughout 21 U.S. states and 2 Canadian provinces representing more than 2,500 MW of installed capacity.
- ENEL Green Power has invested in four types of renewable energy, including geothermal.
- ENEL has deep roots in geothermal energy. The first commercial geothermal plant came online in Tuscany, Italy, in 1913, and it is still being operated by ENEL 100 years later. This demonstrates that geothermal is an established, proven technology that can work for a very long time.
- ENEL Green Power operates 34 geothermal plants with 769 MW of net capacity in Tuscany, Italy—equivalent to 26 percent of the region’s energy needs.
- In 2014, Enel Green Power completed the world’s first Triple Hybrid Renewable Power Plant, integrating geothermal, solar PV, and Concentrating Solar Power (CSP) in Fallon, Nevada. This shows that there is still much potential for innovation in the industry.
- In the United States, ENEL has 3 geothermal facilities (two in Nevada and one in Utah) for a total capacity of 72 MW.
- In 2015, ENEL started building South America's first geothermal power plant in Chile (it will have a total capacity of 48 MW when completed).
- Geothermal energy is lagging behind in the U.S. marketplace, but there is stronger growth abroad. In the United States, the market is dominated by wind and solar energy. In part, this is because U.S. geothermal resource areas are more specific and geographically confined. But it's also because geothermal energy doesn’t benefit from the same policies:
- State policies do not generally recognize or reward the baseload character of geothermal production.
- Federal tax policies advantage wind and solar, which have shorter timelines to become operational.
- A large percentage of geothermal resources are located on federal lands, which leads to generally longer development timelines and increased regulatory requirements.
- The international outlook is much more promising. There are particularly strong markets in East Africa, Southwest Asia, and Latin America.
- The difference can be explained because prices for electricity are generally higher overseas than in the United States, making geothermal energy more competitive; electricity demand in fast-growing economies is increasing much more quickly; and government policies overseas are often more focused on longer-term objectives.
- Thirolf reiterated that geothermal energy is a unique and fantastic resource:
- It provides baseload renewable production (there is no long-term uncertainty over the fuel price and production is stable and resilient).
- It has a small footprint.
- It has zero to low emissions and zero to low water consumption for binary projects.
- In order to meet its potential in the United States, geothermal energy requires thoughtful treatment from policymakers:
- It needs long-term contracts.
- It needs parity with the same incentives received by wind and solar energy, and their duration needs to be matched to development timelines.
- It needs drilling risk mitigation.
- It needs efficiency of permitting and certainty of resource access.
- It needs recognition of the baseload character of its generation.
This briefing was held in conjunction with the U.S. & International Geothermal Energy Showcase in Washington, DC. The showcase was held on March 17, and brought together participants from across the globe to discuss the future of the geothermal industry, cutting-edge technologies, how to stimulate geothermal industry growth, and more. The showcase marked the release of GEA's 2016 Annual U.S. and International Geothermal Power Production Report.