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Power from the earth's heat

With an estimated 370 GW of untapped geo-thermal resources, US authorities are encouraging their development

The development of the US' vast geothermal energy resources is gaining steam. Over the last two years, the number of geothermal projects has been growing steadily, spurred on by an increasingly favourable regulatory environment and heavy investments by government and industry in research that is driving down costs.

The US is already the world's leader in the production of electricity from energy derived from the earth's internal heat. Plants in seven states – Alaska, Hawaii, Idaho, Nevada, New Mexico, Utah and California – have almost 3 gigawatts (GW) of generating capacity – about 30% of the world total and enough to meet about 0.4% of US power needs.

During the first half of 2008, the number of geothermal projects under way in the US rose by about 20%, according to the Geothermal Energy Association. More than 100 projects in 13 states, representing a total of $15bn in capital investment, are under development or consideration – enough to boost the country's geothermal generating capacity by almost 4 GW.

California is the leader in geothermal activity, with 2.56 GW of installed capacity meeting almost 5% of the state's electricity needs. Another 21 projects under way in the state will lift capacity by over 1 GW, a significant step towards meeting the mandate that California utilities generate 20% of their electricity from renewable sources by 2010.

Geothermal energy has been part of the US power portfolio since 1960, when the country's first geothermal plant opened at The Geysers, about 72 miles north of San Francisco. Today, The Geysers has the largest assembly of geothermal power plants in the world, where 22 facilities, with a combined capacity of 750 megawatts (MW), are producing electricity from underground steam resources.

Nevada, the US' second-largest geothermal producer, has 45 projects in the pipeline, including 350 MW and 245 MW projects being developed by Vulcan Power near Salt Wells and Aurora. When completed, the 45 projects will add nearly 2 GW of capacity, moving Nevada closer to its target of generating 20% of power from renewables by 2015.

And interest is intensifying in both of these pace-setting states. The US Department of the Interior received a record $28.2m in bids for geothermal-energy development on federal public lands in Nevada at its lease sale in August. The event took place just a year after a combined sale of leases in Nevada and California, which, according to the Bureau of Land Management, signalled a "new trend in renewable energy". At the sale, Binkley Geo Resources submitted a bid of $6.5m on a 407-acre parcel in The Geysers, an industry record.

Announcing the results of the combined sale, Bureau deputy director Henri Bisson said: "We were extremely pleased with the unexpectedly high interest in our first competitive sale, in June, for lands in Idaho and Utah, and the success of today's sale is a harbinger of continued rising interest in developing the US' considerable geothermal resources."

According to the Bureau, public lands produce almost half of the US' geothermal energy and about 90% of US geothermal resources are found on federal land. A proposal by interior secretary Dirk Kempthorne would open another 190m acres, in 13 western states, for geothermal development. The plan, which was due for finalisation by the end of 2008, could result in the addition of 5.54 GW of geothermal generating capacity by 2015 and another 6.60 GW by 2025.

Like other renewable energy sources, geothermal has benefitted from a wave of legislation enacted in recent years to reduce greenhouse-gas emissions and US dependence on oil imports. The Energy Policy Act of 2005 significantly altered the regulatory landscape for renewables by providing tax credits for power generated from renewable sources such as geothermal, wind, solar and hydro-electric; the Energy Improvement and Extension Act of 2008 extended the tax credits until 2010.

Like other green energy sources, geothermal electricity can be generated with virtually no carbon emissions. Furthermore, it is abundant: the National Renewable Energy Laboratory estimates the US has about 150 GW of identified and unidentified shallow geothermal resources, enough to meet about a third of the country's electricity demand.

Increasing efficiency, driving down costs

Both the government and the private sector are working to increase the efficiency and bring down the cost of geothermal production with initiatives such as Enhanced Geothermal Systems (EGS). While geothermal energy typically comes from hot-water reservoirs or steam sources close to the earth's surface, EGS involves injecting cold water into holes drilled into hot rocks buried at least 4,500 metres underground. The water fractures the rock and then heats up as it circulates through the cracks. The water, forced back to the surface in nearby wells, is hot enough to run turbines that produce electricity.

According to a report from the Massachusetts Institute of Technology, 100 GW, or more, of EGS-generated capacity could be installed in the US by 2050 with an investment of only $1bn.

Although no EGS systems have yet come on-line in the US, the first test is scheduled to begin this year in Ormat Technologies' 11 MW Desert Peak facility in Nevada. To accelerate cost-effective EGS development, the Department of Energy is to present 21 awards, totalling up to $43.1m over four years, for research, development and demonstration of EGS for next-generation geothermal energy technologies. Cost-sharing by the recipients would boost total investment to as much as $78m.

Seven of the research projects would address aspects of engineered-reservoir creation, management and utilisation at temperatures of up to 300°C and depths of up to 10,000 metres. The other four awards would support testing and validation of stimulation techniques for improving productivity of wells, or increasing inter-well connectivity at existing geothermal projects.

Non-governmental entities have also shown a willingness to foot the bill for EGS research. The philanthropic arm of Internet search firm Google plans to invest $10m in two companies that are heavily involved In EGS development, AltaRock Energy and Potter Drilling.

While EGS capitalises on deep, very hot sources of geothermal energy, Raser Technologies uses more relatively low-temperature geothermal resources to vaporize a fluid that boils at a lower temperature than water. The vapour is used to spin a small generator to produce power. In early November, the company inaugurated its first commercial-scale power plant, in Beaver County, Utah, to demonstrate the technology's viability. According to Raser, the US Geological Survey has identified more than 120 GW of untapped low-temperature geothermal resources in the country.

As these EGS and low-temperature technologies bring down the cost of producing power from the earth's interior heat, geothermal energy could account for an even faster-growing share of the electricity flowing into the nation's power grid.

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