Power plants are generally not described as sexy. Loud. Polluting. Unsightly. These are the more commonly used adjectives. But "sexy" is just how Paul Thomsen, public policy manager for Ormat, a geothermal power company, describes the boxy maze of ochre-colored pipes that make up Galena III, a company plant sitting between tawny hills on the outskirts of Reno, Nevada. Galena III just happens to be hot, too. Her low-lying pipes are filled with steam pumped in from 900 feet below ground that help turn a dozen turbines, which power a series of softly purring generators. Yet, Galena III is most bewitching for her production of 22 megawatts of electricity—roughly enough energy to power 22,000 homes—emitting virtually no greenhouse gasses in the process.
Geothermal power has literally been around forever. For millennia, people have used the Earth's geothermal heat to cook, warm their homes, and bathe. The first geothermal power plants were built in the early 1900's. Despite the fact that geothermal is one of the cleanest and most reliable energy sources on the planet, it's largely been overlooked in favor of solar and wind power as a viable renewable resource. Yet as states and the federal government search for ways to curb carbon emissions, geothermal is getting a new look from policy makers and investors alike.
Currently, two types of geothermal plants are commonly in use. Both produce power by harnessing the energy of steam or hot water from deep reservoirs in the Earth’s interior to move turbines, which power generators. Flash plants, the most common type of geothermal plant, require water at least 360 degrees Fahrenheit to power the turbines. These plants produce some emissions, such as nitrous oxide and particulate matter, but the quantity is quite small compared to traditional coal plants. Binary plants on the other hand, such as Ormat’s Galena III, can run at lower temperatures, sometimes below 300 degrees, because they use a “binary,” or secondary, fluid—such as isobutene—that boils at a lower temperature than water. When the secondary liquid vaporizes, it turns the turbines. Binary plants have the advantage of being a closed-loop system—the steam is pumped back down into the reservoir—with virtually no emissions or steam lost to the atmosphere.
According to Karl Gawell, executive director of the Geothermal Energy Association, a trade group, the recent spike of interest in geothermal is largely due to changes in state regulations and federal tax laws. Many states have implemented renewable portfolio standards, which require utility companies to use a certain percentage of renewable energy. At the same time, the 2005 energy bill extended the production tax credit—a renewable energy credit—to geothermal plants. This credit had previously only been available to wind and bioenergy facilities. The 2007 energy bill also designated more money to geothermal projects. This combination has made geothermal plants more attractive to investors.
And investment is exactly what the geothermal industry needs. Drilling wells to access geothermal reservoirs is expensive. According to the California Energy Commission, as of 2003 the initial capital investment for a geothermal plant averaged about $2,700 per kilowatt—that's 4 to 6 times more expensive than the capital costs of building a comparable natural gas facility. Ormat spends approximately $3.5 to $4 million per megawatt (1,000 kilowatts) on its plants. Funding from the Department of Energy has dried up in recent years, so most of the money for geothermal has come from private investors.
The upshot to geothermal: it eventually pays for itself. Coal and natural gas plants may be cheaper to build initially, but they still have to get coal or gas from somewhere else—the cost of buying the fuel and transporting it over the lifetime of the plant isn't usually factored into the initial cost of building the plant. Geothermal power plants, on the other hand, get a free source of fuel indefinitely. Once the capital costs are paid off, the plants have little overhead. Thomsen, of Ormat, equates geothermal to investing in long-term mutual funds.
Geothermal also has some significant advantages over other renewables. It doesn't disrupt ecosystems and are one of the only renewable energies (besides hydropower) considered by utility companies as a baseload power—which means it runs reliably enough for energy companies to use it all the time. Ormat, for example, has signed a long-term agreement with Reno's local utility, Sierra Pacific, to sell the power it generates at Galena III and its other plants in the area. The plants consistently produce close to 100 megawatts—enough electricity to power the entire city of Reno. Wind and solar powers are too sporadic to rely on consistently, and can only be plugged into the power grid when the sun is shining or the wind is blowing.
Policy makers became even more interested in geothermal this year after the Massachusetts Institute of Technology published a study that highlighted how government investment in Enhanced Geothermal Systems (EGS) could drastically expand geothermal resources. Unlike flash and binary geothermal plants that need a reservoir of hot rock and water, EGS power plants just need the hot rock. Engineers can pump water down into the rock, creating cracks and fissures so that the water can penetrate, essentially making an artificial reservoir. EGS technology is still in the developmental stage, but several companies, including Ormat, are working on developing plants.
"The reason you've seen geothermal take off in the West is because that's where the best resources are," says Gawell. "We're only using a fraction of the resources right now." In addition to EGS, Gawell says geothermal resources around the Gulf of Mexico, and hot water rising from oil wells could also provide geothermal power to other parts of the country.
According to Chris Kielich, a spokeswoman for DOE, the department hopes to dedicate $30 million to geothermal projects over the next year, up from $5 million last year. Kielich says the DOE is still determining how to spend the funds, but that they will go toward new technologies, such as EGS.
For now, geothermal companies, like Ormat, are riding the wave of the newfound popularity. And, according to Thomsen, the playing field between renewables and non-renewables is evening. Renewable energy companies have long found it hard to get investment, but because of new proposed cap-and-trade laws that would lower carbon emissions, investors are starting to shy away from non-renewable projects. "It's good for the fossil fuel energy industry to get a taste of what renewables have been getting for years," he says.
Story by Christine Cyr. This article originally appeared in "Plenty" in April 2008.