The Energy Blog

Raser Technologies, Merrill Lynch Agree to a 155 MW Geothermal Financing Program

Raser Technologies, Inc. (NYSE: RZ) announced that it has entered into an agreement with Merrill Lynch for the structuring and financing of up to 155 megawatts (MW) of Raser’s geothermal power plants, including a commitment letter from Merrill Lynch to provide funding for the construction of Raser’s first geothermal power plant.

The plant, using PureCycle® geothermal technology from UTC Power, a United Technologies Corp. (NYSE: UTX) company, is designed to produce 10.5 MW of electrical power with zero emissions.

This agreement provides the required up-front capital to complete their initial projects and keep them on pace to fulfill their goal to initiate the development of 100 MW per year for the first three years of their geothermal power production effort, and 150 MW each year thereafter.

The PureCycle geothermal system results from more than six years of research and development work involving UTC Power, United Technologies Research Center and the U.S. Department of Energy.

The organic Rankine cycle-based power system is an advanced binary cycle system that is driven by a simple evaporation process and is entirely enclosed, which means it produces no emissions. The only byproduct is electricity, and the system’s “fuel” -- geothermal hot water -- is a renewable resource.

Google's Goal: Renewable Energy Cheaper than Coal

Google (NASDAQ: GOOG) today announced a new strategic initiative to develop electricity from renewable energy sources that will be cheaper than electricity produced from coal. The newly created initiative, known as RE<C, will focus initially on advanced solar thermal power, wind power technologies, enhanced geothermal systems and other potential breakthrough technologies.

In 2008, Google expects to spend tens of millions on research and development and related investments in renewable energy. As part of its capital planning process, the company also anticipates investing hundreds of millions of dollars in breakthrough renewable energy projects which generate positive returns.

"There has been tremendous work already on renewable energy. Technologies have been developed that can mature into industries capable of providing electricity cheaper than coal. Solar thermal technology, for example, provides a very plausible path to providing renewable energy cheaper than coal. We are also very interested in further developing other technologies that have potential to be cost-competitive and green. We are aware of several promising technologies, and believe there are many more out there."

"With talented technologists, great partners and significant investments, we hope to rapidly push forward. Our goal is to produce one gigawatt of renewable energy capacity that is cheaper than coal.  We are optimistic this can be done in years, not decades."

-- Larry Page, Google Co-founder and President of Products

German Based Hochtief Enter Geothermal Market with 5 MW Plant

Company to plan, finance, build and operate first entirely privately financed power plant in Germany - Further locations planned

According to this press release, Hochtief AG , Essen, Germany-based construction contractor, is forming a venture with Renerco and SachsenFonds to build and operate a EUR 35 million (US $50 million), 5 megawatt plant at Dürrnhaar in Bavaria. For this purpose, a company called Süddeutsche Geothermie-Projekte GmbH & Co. KG (SGG) has been set up, in which Hochtief holds 40 percent of the shares. Its partners are Renerco AG (30 percent) and SachsenFonds (30 percent).

Hochtief believes that in the future, geothermal energy will play a very important role in power generation. Theoretically, geothermal energy plants could cover Germany‘s annual electricity consumption 600 times over.

With its partners, the company plans to build and operate further power plants of this kind, each with an output of four to five megawatts in the South German Molasse basin.

Hochtief will initially focus on the growth market of geothermal energy in Germany, but international expansion is also already being considered. In addition to the business aspect, one factor which the company regards as important is the active contribution to protecting the climate. Geothermal energy power plants reduce the emission of carbon dioxide and - unlike other renewable forms of energy - produce electricity the whole year round for base load capacity.

Glitner Places Big Bet on Geothermal

Iceland's Glitnir Bank (OMX15: GLB, U.S. citizens cannot buy stock) which opened its first U.S. office in New York September 6, said it plans to invest $1 billion in U.S. geothermal energy projects over the next five years in order to exploit some of the $40 billion market that they predict will develop over the next 25 years.

An extensive U.S. Geothermal Energy Market Report has been prepared and published by Glitner to back up their investment decision.

I recommend saving a copy of this report if you have any interest in renewable energy, as it has extensive charts and graphs on the whole industry, perhaps with a bias toward geothermal, although I find it quite objective. It is quite current with data through May of this year. Although geothermal cannot meet nearly the potential of some other renewable sources, a 10-11% share of renewable technologies is much larger share than expected by some and a very worthwhile resource that is has quite mature technology. This does not include any implementation of enhanced geothermal systems (EGS) which, although not proven, offers the potential to allow the use of geothermal energy over a much wider geographical area.

The report’s main findings:

• The U.S. with total installed capacity of some 2,800 MW and annual electricity generation of approximately 16,000 GWh. It will continue to be at the forefront of the world’s geothermal development and currently has projects underway that, when completed, will boost U.S. installed capacity by a further 2,500 MW. Given an overall estimated resource base of up to 30,000 MW for hydrothermal, and an even greater potential for direct use of geothermal energy, the opportunities for the industry are tremendous. These figures do not include any exploitation of hot dry rock or deep geothermal/EGS.
• The biggest potential for geothermal energy applications in electricity production is in the Western States, primarily in California, Nevada, Idaho and Oregon. In California, geothermal could provide about 20 percent of today’s electricity needs. In Nevada this could be even 60 percent and 17 percent of the electricity in Idaho could come from geothermal.In Hawaii, the potential of geothermal power is particularly interesting, as it could provide around 30% of the islands’ electricity needs, decreasing the state’s dependence on fossil fuels. Most of the current development is taking place in Nevada and California.
• Glitnir estimates the investment requirement to service current projects to be some USD 9.5 billion. A total Investment of USD 16.9 billion will be required to develop available resources over the next 8 years with a further USD 22.5 billion during the following 10 years. We forecast that the total investment needed to develop the resources available is in the region of USD 39.4 billion until 2025.
• Sales of geothermal powered electricity could increase from currently USD 1.8 billion to USD 11.0 billion, without taking into consideration the vast opportunities for the development of geothermal direct use applications, e.g. geothermal heat pumps.
• The geothermal industry in the U.S. is still very fragmented, consisting of relatively few big companies and many small ones. Some of the smaller companies lack the financial strength to fully develop projects that in many cases could be profitable. Therefore Glitnir believes there will be considerable consolidation in the industry in the next few years.
• For successful development of the geothermal industry it will be necessary to increase the capacity of drilling equipment and related human resources. As the industry is recovering from a decline that took place in the late 1980s and is to some degree competing with the oil industry for human resources, it is crucial to train and educate people to work within the sector.

Ormat Signs 50 MW PPA with Southern Ca Edison

Ormat Technologies, Inc. (NYSE: ORA) announced that it has signed a 20-year power purchase agreement (PPA) with Southern California Edison (SCE) to purchase 50 megawatts (MW) of clean energy output from the Brawley I Project, which is currently under construction in Imperial County, California, by Ormat. The PPA includes an option to increase capacity to 100 MWs at Ormat's discretion, and is subject to the approval of the California Public Utilities Commission (CPUC). When completed, the Brawley I Project will increase the total output supplied from Ormat to SCE to approximately 190 MWs.

This is evidence that geothermal can supply a significant amount of power and is deserving of backing as a major source of power.  See previous posts, here and here, for an assessments of geothermals potential.

Geothermal Power not Just for the Western US

Jefferson Tester, the H.P. Meissner Professor of Chemical Engineering at MIT headed an MIT-led study of the potential for ramping up geothermal energy within the United States. Tester was part of the 18-member panel that prepared the 400-plus page study, "The Future of Geothermal Energy," (PDF 14.1MB) for the U.S. Department of Energy.

I have summarized some of the main points from an article (page 3) in MIT TechTalk.

• Geothermal resources are available nationwide, although the highest-grade sites are in western states.
• Geothermal energy using enhanced geothermal system (EGS) technology would greatly increase the fraction of the U.S. geothermal resource that could be recovered commercially.
• The United States, generating 300 megawatts, is already the biggest producer of geothermal.
• If geothermal is going to be anything more than a minor curiosity, it has to reach at least the level of hydro and nuclear power, or 100,000 megawatts out of 1 million--one-tenth of total capacity," he said.
• The study found that geothermal could supply a substantial portion of the electricity the United States will need in the future, probably at competitive prices and with minimal environmental impact.
• The process involves drilling to as deep as 30,000 feet, pumping water under pressure into fractures to break apart underground rock formations and freeing up reservoirs.
• Seismic activity is a risk, he said. "The big challenge is to show you can do it not only in California, but also in the Midwest and ultimately on the East Coast, where you have to go deeper."
• Among geothermal's advantages are its below-ground, out-of-sight nature, making it easier to site, and its high capacity and because, unike solar or wind, it runs a the time.
• Environmental impacts are "markedly lower than conventional fossil-fuel and nuclear power plants."
• Meeting water requirements for geothermal plants may be an issue, particularly in arid regions.

New Report Finds Huge Power Potential in Geothermal Resources

The thermal energy stored in the Earth's crust could be converted into electricity to provide a substantial portion of future U.S. power needs, probably at competitive prices and with minimal environmental impact, according to a new study, MIT press release, full report (14 MB pdf), sponsored by DOE and led by the Massachusetts Institute of Technology (MIT). A 21-member expert panel released a report that examines the potential to tap into the heat in Earth's crust and convert it into electricity. The report found the potential to generate 100,000 megawatts of power from geothermal resources within 50 years. That's roughly one-tenth of the total generating capacity that exists in the United States today.

While today's geothermal power plants draw from underground reservoirs of hot, permeable rock containing significant amounts of water or steam, the MIT-led panel specifically examined enhanced geothermal system (EGS) technology, which involves creating such geothermal reservoirs in areas that lack either the water or the permeability, or both. Such technologies were previously tested by DOE in New Mexico and are currently being explored in Europe and Australia. See my previous post and the EGS technology description on the DOE Geothermal Program Web site.

Raser Enters Geothermal Power Business

Raser Technologies, Inc. (NYSE Arca: RZ) , a technology licensing company, reported that it has secured geothermal rights to certain Nevada properties owned by Truckee River Ranches, LLC, under the terms of a 50-year lease agreement.

Brent M. Cook, CEO of Raser, stated, "This lease offers Raser an excellent starting point to launch into the geothermal power generation spaces utilizing our recently acquired heat-transfer technologies. We expect to move rapidly into the development phases of this exciting resource during 2007. We believe that developing geothermal power projects will be a significant addition to Raser's business."

The heat-transfer technology involves binary cycle generation, in which the steam or water from the geothermal reservoir never comes into direct contact with the blades of the turbine generator. This method has a competitive advantage when used for water-based geothermal resources of generally low temperature, ranging from approximately 93 to 183 degrees C, but it works at higher temperatures as well.

Geothermal Power Taking Hold

A new report from the Geothermal Energy Association (GEA) concludes that Nevada is now on-track to be producing over 1000 MW of geothermal power -- quadrupling its current geothermal output -- over the next 3 to 5 years. This level of geothermal production would meet roughly 25% of the state's total power needs.

In an earlier press release GEA reported that a total of 58 new geothermal energy projects are now under development in the US. These projects, when developed, would provide up to 2,250 megawatts of electric power capacity This would almost double installed US geothermal power capacity to over 5,000 MW.

The new report identifies up to 29 new geothermal power projects now under development in Nevada. The report finds that new power plants would produce as much as 853 MW. When completed, these new plants will quadruple the existing 276.4 MW capacity from Nevada's currently operating 15 power plants. With over 1100 MW, Nevada would be generating more power than most of the 25 countries producing geothermal energy today. Only the US and the Philippines produce more.

New Funding for U.S. Geothermal Energy

Increasing oil prices and enthusiasm from the incoming Congress are renewing interest in sustainable energy and have led to the construction of 50 to 60 new geothermal power in nine states, Canada and six other countries.

Already in Iceland more than 17 percent of electricity, and in the Philippines, more than 27 percent, is generated from geothermal power, according to the U.S. Department of Energy. .......

Geothermal power is the most reliable and environmentally friendly form of energy. It provides baseload power 24/7 and there is enough potential geothermal energy to meet all the needs of the world.  The MIT Technical Review has another post on the potential of geothermal and new technology that would make geothermal possible in more locations.