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.

PureCycle geothermal systems have been in operation since 2006 at Chena Hot Springs Resort in Alaska, as a U.S. Department of Energy Geothermal Technologies demonstration project. It is the first geothermal project in Alaska and the lowest temperature geothermal resource (165° F) ever used for commercial power generation.

The PureCycle system makes it possible to tap into a significant new domestic renewable energy resource because it operates at previously unusable low temperatures -- from 165 to 300 degrees Fahrenheit.

The Raser/UTC Power plants are manufactured in modules which offer the following advantages:

• Premanufactured for economy in high volume
• Delivered and deployed rapidly avoiding costly on-site engineering delays
• Flexible modular design can be connected into larger power generation "farms"
• The entire plant can be operated remotely, with no personnel on site.
• Raser plans to use many of its high efficiency Symetron motors and generators in each 10-megawatt plant to improve output efficiency and reduce parasitic losses.

Raser’s can use a patented liquid heat carrier that has a substantially lower steam point or “flash point” than water. Water boils at 212° F while the liquid used by Raser is effective at temperatures as low as 180° F.

Over 120,000 megawatts of untapped low temperature geothermal resources have been identified by the US Geological Survey as shown on the map below.

   

The expected useful life of Raser’s geothermal power plants is approximately 35 years. 

Comments

[mjtimber]

Raser isn't really a company that I have much faith in. They have been nothing but a marketing wonder so far, with their pancake motor design that has yet to be incorporated into any products. Their biggest stunt so far was to put one of their motors in an open-wheeled race car, put former Indy 500 Winner Danny Sullivan behind the wheel, and drive it around at 30 mph. Great stunt, but nothing too impressive. Perhaps this is more of the same, perhaps not, but this is not a trustworthy company.

[Jim Holm]

This one caught my eye when I looked at the hot water temperature.

This is important because deep geothermal thermal wells do have a snowball's chance of producing small amounts of practical power. This will hurt deep geothermal's reputation and subsequently it's chances big time once the word gets out.

Raser is getting away this now because they are providing electricity to a resort, something that has been done all over the world for decades using wind energy.

The stats: 165 degree F source, 95 degree F cooling tower is a delta-t of 70 degrees F using a "Patented Heat Carrier" that sounds an awful lot like good old ozone layer killing Freon. Just imagine the volume of Freon coolant that would be needed to produce 155 megaWatts with, at most, a 20% efficiency from a delta-t of only 70 degrees F. That's degrees F, not Celsius, folks.

For comparison: The Big Bend coal power plant is 900 Degrees F delta-t using Tampa Bay for cooling. This gives about 30%+ efficiency. A 1920s steam locomotive with 300 degree F steam was about 5% efficient.

At $2,500 per installed kiloWatt, (current street price for a steam power plant) Merrill Lynch have committed themselves to at least $400 million.

[averagejoe]

Looks a lot like a commercial Chiller unit. Probably not surprising, given that UTC borrows a lot of it's technology and parts from Carrier corp, a refrigeration and air conditioning equipment manufacturer. I read an article about the system in place at Chena Hot Springs. Apparently, they're using R-134a as the working fluid for geothermal applications. If so, then there's nothing to worry about. As a HFC refrigerant, R-134a does not contain any chlorine atoms and so has a ozone depletion potential of zero. Also, the units are modular, so one refrigerant loop would not be expected to generate the whole 155MW.

[Cyril R.]

using a "Patented Heat Carrier" that sounds an awful lot like good old ozone layer killing Freon. Just imagine the volume of Freon coolant that would be needed to produce 155 megaWatts with, at most, a 20% efficiency from a delta-t of only 70 degrees F.

Considering only minute (if any) quantities of freon would be leaked into the atmosphere, it's a moot point even if they were using freon. Freon has excellent thermodynamic properties, but really, any other organic will do just fine. Propane, ammonia, isobutane. No need for CFC's.

My take on geothermal is to exploit the Yellowstone Caldera. That magma chamber is huge. The environmentalists aren't going to like it of course, but perhaps we could convince them that Yellowstone is about to blow up. If they watch Discovery they'll probably buy into it :)

ORC turbines could also be used as an second turbine in coal fired plants. 50-60% net electrical efficiency is possible. Such upgrades to existing plants can be done quickly so that means quick and big GHG savings. And at reasonable capital costs. Levelised cost won't rise a lot due to lower coal use. De-torrified charcoal can be co-fired in the future; if and when CCS becomes available, such plants would be carbon negative.

ORC's also have great potential for advanced solar thermal generation.

[C. Heard]

Why not use ORMAT technology: tried tested and in use since the '80s? (www.ormat.com). If UTC are using Carrier technology they may be using a screw expander - which would allow two phase expansion and a trilateral cycle which would better match a liquid phase heat source. The working fluid is probably a red herring - simple hydrocarbons can work very well or mixtures if you want a temperature glide on the evaporator. R-134a is expensive and a much worse greenhouse gas than a simple hydrocarbon.

[Paul F. Dietz]

ORC turbines

For the horde!

[averagejoe]

Hydrocarbon working fluids or R-134a, either one will do. Compared to the vast volume of carbon dioxide or methane that enters the atmosphere on a daily basis, the occasional, de minimis release of R-134a during routine mainenance is a drop in the bucket.

[Cyril R.]

ORC turbines

For the horde!

Lol, yes, I was completely oblivious to the disambiguation there!

Orc turbines running on excess production of ogre saliva. Does ogre drool have favorable thermodynamic properties as a working fluid, eh? It would certainly be organic!

[Cyril R.]

At $2,500 per installed kiloWatt, (current street price for a steam power plant) Merrill Lynch have committed themselves to at least $400 million.

Jim Holm appears to be an advocate of nuclear PBMR. Is he aware that the only commercial large plant ever built that closely resembles this design has cost more than EURO 6,800 per KW electrical capacity installed? Correcting that for inflation and into USD should be great fun don't you think? A cost of 10,000 USD per KW would be a VERY conservative estimate.

Yes, that plant had many technical problems, and no doubt some are solved but we don't really know that because insufficient PBMR capacity is installed today. There are newer version of PBMR, but none of these have less capital costs than this geothermal project, and no large unit sizes have been built so far. It will take years before we can be conclusive about the viability of PBMR designs.

[Cyril R.]

Thinking about adding a waste heat turbine to existing coal fired plants some more.

Organic Rankine Cycles are rather expensive and considering the large unit size required (big coal fired plants) it may make more sense to use a big low temperature steam turbine. Such large turbines typically cost 300-400 USD/kW. I'm not sure what integration into existing coal fired plants would cost, and there may be some technical problems with it, but this looks like a very promising option to cut GHG a lot relatively quickly. Even lower efficiency plants could have their net electrical efficiency boosted to over 50%.

A really BIG geothermal plant (for example, the one at The Geysers) could also use low temperature turbines. Temperatures have to be at least around 500F though, so unless sufficient high temperature hydrothermal resources are available that would probably require something like hot-dry rock technology.

[John]

I'm not sure I understand the concern about efficiency. If you can get 10MW out of a low temperature source with a large Tc/Th (efficiency = E=1-Tc/Th)
what difference does the thermodynamic efficiency make? If your power generation is 10% efficient then it means you're losing 90% of your energy to the environment but it doesn't really cost anything. If the energy is geothermal you're not paying for anything but the initial investment and maintenance, so what difference does efficiency make?

[steve selverston]

John- excellent point! I don't know if this is possible, but I read that the power will be sold to southern california (from Utah), so think of the electrical losses there.! They'll still turn a profit because the energy comes basically for free once the plant is running.

[steve]

Steve I don’t know anything about this project but I was just going to add a couple of thoughts. There is already a DC transmission line from Western Utah to Southern California. Route 27 if I remember right. I ends in Southern California near where I live. I am not sure how much capacity, if any, it has left on it but would be one way to transport the electricity with minimal losses. Also I would not underestimate the costs of maintenance on this project. If it is anything like the Geysers it will be extensive.

[Whitman]

It will be interesting to see what Jesup & Lamont coverage will do for Raser . . .

Editor
www.smallcappulse.com

[Yuya Joe]

Great to see the expanded list of clean energy and renewable power blogs. I'm looking at also including water deslination / purification stocks as a way to diversify away from oil volatility. What do you think?

By the way, from my group, about a third the size of yours, we are seeing the most demand in the areas of wind energy stocks and geothermal power investing.

Check out:

WindIntell.com Renewable Power Stocks

Geotherma.info Geothermal Energy Investing Links

[Nathan Creitz]

Have you heard that Google is going to invest over $10 million in Geothermal Energy? I've always been a fan of Google but this is just one more reason to like them. If you are interested there is a lot more info on my blog. Thanks for caring about the environment.

[Kit P.]

So Nathan, you like people who say one thing and do another? Periodically there is a press release from Google that is just more green washing. This is not a criticism of geothermal. In the Google world of virtual reality, good graphics and outlandish claims are more important than practical ideas that actual work.

Previously in this blog we discussed Google’s last press release. Nathan may want to be less gullible and more skeptical if you care about the environment. When a company puts solar panels on their roof, you may want to check how much electricity the panels make.

[steve selverston]

Gotta love geothermal power! Few people realize just how much geothermal power is already generated in California (about 1800 MWe), which is roughly 5 % of the states electrical power in 2009
steve selverston

[K.R.E.]

I have been looking all over for info about geothermal here in south Florida (Tampa). Finally found one website for a company that seems to know what's up. They have links to all the govt rebates and tax incentives. Go green and get green back, I am amazed, lol!! I went to www.goeggsystems.com, anyway hope this helps.

[Zoneaire]

great post.

[Henry]

Thanks for the information K.R.E., I know the residential sector of geothermal technology is booming right now, too. Hopefully www.goeggsystems.com will be able to make some progress there as well.

[Cyril R.]

Normally, low efficiency would matter because it increases the cost of the equipment (less energy produced). The interesting thing about this technology is that it's lower cost structure makes up a bit for that. It's still capital intensive but high capacity factor makes the cost of electricity reasonable. (power purchase agreement is under 8 cents/kWh, and the power is very reliable, running close to 100% of the time).

Raser has quite a few units running now although deployment is not as fast as they would like. When they get some more practical experience with the systems and high volume orders for reduced overhead costs, they could be really cheap.

The modular size is a big advantage. Big geothermal plants are cheaper but have to compete with the cheapest fossil fuel generation which is a crap margin market.

Unlike such big plants, these things can be built to service remote locations and villages that would normally be powered by expensive diesel generators (typically >20 cents/kWh). That's a $$$ market globally. After that, there's smaller (a few MW to tens of MW) grids that are serviced by small fairly inefficient powerplants with high fuel costs, a very good market also. They need to tap into higher value markets first.

[gerorge]

Geothermal has so many advantages over other alternative technologies. It is available day or night and doesn't depend on the above ground environment.

[buy wholesale]

It will be interesting to see what Jesup & Lamont coverage will do for Raser . . .

[flowers]

Nice effort, very informative, this will help me to complete my task.I love flowers...I am also interested to send flowers all over the world....

[flash interactive animation]

This will benefit on large scale. Very important to work on such projects.

[Ted Sumrall]

Raser has shown that it pays to hire a good reservoir engineer prior to sinking a lot of money into a hole. It will take eons to restore the heat in their reservoir. They were operating on the "Raser's Edge" thermally and it is little wonder they ran out of "steam". Coupled with transmitting the power all the way to southern California, this was a disaster from the start. Perhaps VC firms would do well in the future to conduct indepth engineering analysis prior to sinking money into a black hole.

[breeches]

The financing program is from Merrill Lynch is good enough and they are sure to make huge profits in coming year

[silk flower arrangements]

We'll see what will gonna happen.

[Breeches]

A great article, this is a great news that they are agree to this program. Really very nice.

[Geothermal Heat Pump Systems]

Would be great to have an update on this geothermal project now that we are getting ready to enter 2011 and this transpired back in 07/08.

[Henry Egg]

Wow! You have a great blog. I enjoyed skimming through the topics. I work for a geothermal HVAC company and cost is always our greatest obstacle with clients, too. The President of our company, Jay Egg, actually recently published a book through McGraw Hill called Geothermal HVAC: Green Heating and Cooling. If you're ever interested in interviewing him or him guest posting, please let us know. Best to you!

[ultimate game card code]

Looks a lot like a commercial Chiller unit. Probably not surprising, given that UTC borrows a lot of it's technology and parts from Carrier corp, a refrigeration and air conditioning equipment manufacturer.

[buy itunes card online]

Orc turbines running on excess production of ogre saliva. Does ogre drool have favorable thermodynamic properties as a working fluid, eh? It would certainly be organic!

[Florist Sydney]

I just hope more and more eco-friendly and sustainable energy will be used in the future.

[assicurazione moto]

I guess that if its eco-friendly then is very good and more should switch to this kind of units or the planet won't really last long!

[SEO Dubai , Dubai SEO]

Thanks for always being the source that explains things instead of just putting an unjustified answer out there. I loved this post.

[residential solar power]

In 2020 seven billion people will live in this planet, we must all focus on renewable energy

[Come Dimagrire in una Settimana]

"We do not inherit the land from our ancestors, we borrow it from our children".

Remember this and go green.

[saldi estivi 2011]

thanks, great post

[CNA Classes Online]

The planet is ill. We should all rely on renewable energies at once.

[vasca idromassaggio]

this world must be "green"

[radiofrequenza]

we need green economy!

[facelift]

geothermal energy is the future

[prezzi pannelli solari]

In 2015 the prices of photovoltaic solar panels will reach 1000 Us dollars per kilowatt. At that point, the solar PV will be the best renewable energy.

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