World Bank Energy Days RE Technology Session Geothermal Power Karl Gawell, GEA February 23, 2012

How does a geothermal power plant work: Main features, characteristics of a binary power plant While flash steam plants continue to be built, there is a growing trend toward binary power systems as shown below. Nearly all new geothermal power plants in the US have been binary systems using the heat of the earth through a working fluid to produce zero emission power on a continuous basis (as shown in the diagram). Most also utilize air cooling. Picture is Ormat’s Burdette Power Plant in Reno, NV.

Power Characteristics Utility-scale geothermal power production adds reliability to the power system. Geothermal power can be produced as a baseload renewable energy resource, meaning it operates 24 hours a day, 7 days a week regardless of changing weather, providing a uniquely reliable and continuous source of clean energy. As a baseload power source, geothermal is well suited as a substitute for coal in our utility system. Or, geothermal power can be flexible to support the needs of intermittent renewable energy resources such as wind and solar. Because geothermal energy can also be ramped up or down depending on need it can be used to supplement the integrity of the power grid, enhancing the efficiency of the entire system while providing clean, reliable power. Geothermal is also capable of achieving high capacity factors – a measure of actual output over a period of time – usually at or above 90%, which is on par with, or higher than, other baseload power sources such as coal-fired or nuclear power plants, and much greater than intermittent sources. Geothermal power production is also scalable. Power plants as small as a few tens of kW can be economically built for applications in communities, while utility-scale facilities on the multi-MW scale are common.

Technology Maturity Maturity: the quality or state of being mature; esp. full development. Mature: having completed natural growth and development (Merriam-websters.com) While geothermal resources have been in use for thousands of years, the technology for power production is still emerging. Only a small fraction of the known hydrothermal resource base is being utilized, and most of the resources is estimated to be “undiscovered.” Key area for new technology: exploration and drilling technology to reduce risk and up-front cost. US DOE significant work in this area with $200 million in 24 cost-shared underway. Power systems improvements continue with projects showing higher efficiencies and ability to use lower temperature resources

Key Technology Challenge Exploration technology and techniques still maturing Most geothermal resources still “undiscovered” according to USGS Pre-drilling exploration techniques rarely provide an unambiguous drilling target (≤50% drilling success rate) Drilling makes up nearly half of project costs Successful drilling results are needed to secure financing Exploration technologies adapted from oil and gas sectors do not yield the same rates of success in geothermal exploration Increased research needed in geothermal exploration technologies Geothermal exploration and drilling have high risk profiles THEN: Exploration and drilling by large resource companies who understand natural resources , have suitable risk thresholds and deep pockets NOW: Geothermal industry is dominated by smaller companies with limited access to capital and lower risk thresholds

Other challenges Geothermal project lead-times can take 4-8 years, or more, before a plant is brought online and projects face obstacles at key points throughout development In US, competition with other renewables in markets being “glutted” with power project proposals, and often having short-term procurement horizons California utility solicitations in 2011 received “Over 1,000 unique bids and 3,000 proposals from over 260 sellers were submitted, representing approximately 91,000 MW of proposed renewable capacity.” “IOUs shortlisted over 30 proposals consisting of biomass, geothermal, small hydro, wind, and solar PV, representing approximately 3% of renewable generation that was bid into the 2011 RPS Solicitation” (CPUC 4Q RPS 2011 Status Report)

Costs Costs will vary depending upon choice of technology, project lead time, resource temperature and flow rate, transmission requirements, whether the project is an addition to a know resource of “greenfield” development, and other factors. Costs should improve as more is known about a particular geologic area and resource, and as technology improves. Cost estimates vary widely, here are two:

California Energy Commission Comparison of Levelized Costs 2009

US DOE 2011 Cost Estimate – New Undiscovered Hydrothermal Site

World Market IGA reports 2011 Geothermal CAPACITY on-line at 10,716 MW Bloomberg New Energy Finance Forecast 4GW of capacity additions on-line worldwide by 2020, with roughly 10 additional GW in the pipeline (GEA Finance Forum, Jan 2012) Pike Research notes that in addition to 26 countries now utilizing geothermal resources for energy, additionally over 50 countries in six continents have exploration underway (GEA Finance Forum, Jan 2012)

Total Global Installed Geothermal Capacity: ~ 11 GW ~1944 MW of Geothermal Capacity Installed from 2005 through 2010 Capacity Addition by Technology, 2008-Present Capacity Addition by Country, 2008-Present

Source: Íslandsbanki Published: 24. 2. 2011 Geothermal power: Top 10 countries: Units: MW Source: Íslandsbanki Published: 24. 2. 2011 Year El Salvador Iceland Indonesia Italy Japan Kenya Mexico New Zealand Philippines United States 1990 95 45 145 545 215 700 283 891 2,775 1995 105 50 310 632 414 753 286 1,227 2,817 2000 161 170 590 785 547 755 437 1,909 2,228 2005 151 202 797 791 535 129 953 435 1,930 2,564 2007 204 421 992 811 472 1,970 2,924 2010 575 1,197 863 536 167 958 628 1,904 3,087 2015 290 800 3,500 920 530 1,140 1,240 2,500 5,400

Scope for Improvements Exploration technology – better technology could reduce major risk factor and speed development lead time Power efficiency – better efficiency improves economics and modular systems speed development lead time Power systems utilizing lower temperature resources – greatly expands areas with power potential Small modular systems utilizing lower temperatures are spurring new distributed generation mode for geothermal in the US

Opportunities Geothermal power can be utility scale baseload power, flexible firming power, or distributed generation. Geothermal/solar hybrid offers favorable power output profile and optimizes lands use. Large untapped resource base offers opportunity for rapid expansion on every continent with improved technology.

Geothermal Energy is Good for the Environment Geothermal has a very small footprint compared to other technologies: (Land Use 404 square meters /GWH) Geothermal has very low life-cycle carbon dioxide emissions compared to other technologies: (15 tons of Carbon Dioxide Equivalent per Gigawatt-Hour) Source: "Life-Cycle Assessment of Electricity Generation Systems and Applications for Climate Change Policy Analysis," Paul J. Meier, University of Wisconsin-Madison, August 2002.

For more information: www.geo-energy.org 202-454-5261