Has Low Oil Killed Geothermal in the U.S.?

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The Geothermal Energy Association (GEA) is a trade association composed of U.S. companies and organizations that support the expanded use of geothermal energy and are developing geothermal resources worldwide for electrical power generation and direct-heat uses. The association recently held a briefing in Washington, DC, on the subject.

Why Geothermal Energy?

Why Not Geothermal Energy?

Since publication of that article, however, the price of natural gas and, of course, oil, has dropped substantially, making it even more difficult for geothermal to compete with those resources. Only one small 4 GW plant came online in the U.S. in 2014, though there are about 500 mw in plants stalled and waiting for power purchase agreements (PPAs).

In a presentation at the State of the Geothermal Industry Briefing, Timothy Williamson of the Office of Alternative and Renewable Energy, Bureau of Energy Resources, Department of State, discussed the roadblocks for geothermal development. According to Williamson, part of the problem is that the high cost of capital, the risk in exploration and drilling combined with a questionable legal and regulatory framework for geothermal means financial uncertainty for any project.

It takes six years or more to build a geothermal plant; with such low gas and oil prices it is difficult to justify the expense and long lead time to build one of these plants. However, Ben Matek and Karl Gawell of the GEA argue that the value of baseload renewables, such as geothermal, needs to be better recognized. In a paper released concurrently with the briefing, they wrote: “Misinformation about baseload renewables has distorted the discussion about the least-cost future renewable energy mix. There are renewable baseload power sources with generation profiles that can economically replace other retiring electricity sources megawatt for megawatt, thereby avoiding incurring additional costs from purchasing and then balancing renewable intermittent power sources with storage or new transmission.”

Matek and Gawell asserted that, while there is no one-size-fits-all solution, the renewable energy sector will need to re-evaluate the values of baseload renewables to address today's power challenges and the dangers of climate change. Instead of just looking at short-term, least-cost criteria, broader questions need to be asked when choosing between technologies, according to the paper. “To determine the best path forward, a number of system-wide issues need to be addressed,” they wrote. “First, what combination of technologies really produces lowest system-wide costs when considering emission profile and reliability? And second, what mix of electricity sources will have the lowest cost considering both replacement costs and operation and maintenance costs over a period of several decades?”

According to Williamson, there must be a balance between the government and private industry to create a more reasonable investment climate for geothermal. He suggested that feed-in tariffs, auctions and hybrid policies balance true-costs for least cost of energy. The permitting process, fit allocations, and transmission allocations must be equally managed by central and local governments and appropriate tax structures should be put into place to put geothermal on the same footing as other renewables.

Technology

Included in that equipment, of course, are valves, actuators and controls, all of which must be especially robust to meet the requirements of high temperatures and geothermal brine. Corrosive salts and heavy metals present very difficult operating conditions for pumps, valves and mechanical seals.

Valves are used in all of the several systems within the geothermal plant. At the production well, isolation and control valves complement the pumps used to extract the hot water or flash steam from the earth. Circulating water services are handled by gate, globe, butterfly, plug, ball, control and check valves, and the valves used for the power generation turbine are similar to those in any steam-generated plant. The geothermal power cycle completes when geothermal water and condensed steam are injected through a well back into the reservoir to be reheated by the earth. The processed geothermal brine can contain enough corrosive salts and heavy metals to require special disposal, so salts, silica and heavy metals must be removed from the water, another challenge for the valves in the line.

Unlike many other renewables, there is ample technology available to meet all of the requirements of geothermal energy production; the challenge is finding the political will and investment to make it viable over the long term.

Going Forward

Another problem being addressed is the lack of and charge for transmission lines because of the historically remote locations of geothermal plants. In the past, geothermal plants were most often located at the edges of tectonic plates where high-temperature water was available near the surface. More recently, new technologies have allowed plants to be located closer to population centers, so this could ease the cost of transmission of the power generated by this source.

Conclusion

The future of geothermal in the U.S. will depend on the commitment the country has to meet climate goals and the investment community’s willingness to finance the resource. According to Matek and Gawell, “In choosing a path to a new generation mix, the values, performance characteristics and availability of baseload renewable resources should be examined. The value of diversity should be recognized and integrated into future planning, and the total cost and performance of different mixes of technologies should be examined for each power system or balancing authority, particularly as these systems call upon larger amounts of renewable generation to meet system power needs.”

Kate Kunkel is senior editor of VALVE Magazine. Reach her at kkunkel@vma.org