Posted by: Leonard Anderson

Several items relating to the business and technology of clean energy and the environment caught our attention this week:

SolarCity, a solar power system design, financing and installation company, has secured an additional $90 million fund from a unit of U.S. Bancorp to finance expansion of its solar projects in the western states. In January, Pacific Venture Capital, a subsidiary of PG&E Corp., announced $60 million in financing for SolarCity installations mainly in California with some in Arizona and Colorado. SolarCity also serves Oregon and Texas.

Former Edison International CEO John Bryson plugged some green startup companies at the U.C. Berkeley Energy Symposium on Thursday: Santa Monica-based Coda Automotive, maker of electric vehicles in China; smart-grid wireless company On-Ramp Wireless, of San Diego; and Ostendo, maker of solid state lighting displays based in Carlsbad, California. Bryson, a member of Coda's board of directors, was a co-founder of the Natural Resources Defense Council and president of the California Public Utilities Commission.

Greenest city in the world? Reykjavik, Iceland, tops a list for sustainability, according to Global Green Blog at GlobalPost. Reykjavik runs entirely on green power, including geothermal and hydroelectricity, and the city's transit system moves people around on hydrogen buses. Light-rail and bicycle leader Portland, Oregon, comes second, followed by Curitiba, Brazil, where sheep trim the parks; Malmo, Sweden, developing sustainable neighborhoods; and Vancouver, British Columbia, where 90 percent of its electricity comes from hydropower.

Posted by: Jonathan Marshall

The geothermal power industry, which has suffered several well-publicized setbacks in recent months, today got a huge financial and morale boost in the form of up to $338 million in Recovery Act grants from the Department of Energy to support research, exploration and development of new production fields.

The matching grants will help fund 123 projects in 39 states. As much as $133 million will go to support the promising new field of "enhanced geothermal systems" (EGS), which involves drilling deep into hot rocks to develop power resources in locations that were never previously considered candidates for geothermal energy.

If EGS proves economically feasible, relatively clean, renewable geothermal energy could go from a niche resource to a major contributor to U.S. power needs. Total geothermal capacity in the United States today is about 3,100 megawatts, of which 2,600 MW are in California. The U.S. Geological Survey estimated that the nation's geothermal resources could in theory support 500,000 megawatts of generation, almost half of all electricity consumed in the United States.

And a report produced in 2006 at Massachusetts Institute of Technology concluded that with a few hundred million dollars in R&D to jumpstart the industry--on the order of what DOE is now providing--EGS could feasibly produce 100,000 MW of power by 2050, enough for about 85 million homes.

"Geothermal energy from EGS represents a large, indigenous resource that can provide base-load electric power and heat at a level that can have a major impact on the United States while incurring minimal environmental impacts," according to the MIT study. "Further, EGS provides a secure source of power for the long term that would help protect America against economic instabilities resulting from fuel price fluctuations or supply disruptions."

Four of the new DOE grants are for EGS projects at Lawrence Berkeley National Laboratory, a prime center of research on clean energy. They will help engineers better understand how hot fluids move through fractured rock deep underground.

One study will examine the potential for using carbon dioxide to absorb heat from underground rocks for use in electricity generation, an idea that's getting a lot of attention of late.

Last month, two companies--Enhanced Oil Resources Inc. and GreenFire Energy--announced a joint venture to evaluate the potential for CO2-based geothermal power in parts of Arizona and New Mexico. They hope to start building a 2 MW demonstration plant next year. If it works, one could imagine capturing CO2 from coal plants, injecting it underground and producing geothermal energy from the hot fluid. 

Posted by: Jonathan Marshall

These may be the best of times and the worst of times for geothermal energy.

Of late, the worst has garnered the most publicity, as stories in the New York Times have probed the link between deep-rock drilling, water injection and seismic events (read: earthquakes).

A promising demonstration project by geothermal pioneer AltaRock Energy at The Geysers in Sonoma County was suspended at the beginning of September due to "geologic anomalies."  Drilling problems also plagued Australia's Petratherm, Ltd. A well blowout set back another Australian geothermal leader, Geodynamics, Ltd.

And a much-touted new plant in Beaver, Utah isn't producing water hot enough to generate significant amounts of electricity--and will need millions of dollars in new investment to fix.

The good news, according to a new report from the Geothermal Energy Association, is that 144 new geothermal projects, totaling 7,000 megawatts of potential capacity, are being developed in 14 states.

If all come to fruition, admittedly unlikely, the total output would be enough to serve the needs of 7 million people.

Nevada leads with 64 projects with combined capacity of almost 3,500 MW. California is next with 37 projects that could supply as much as 2,400 MW.

Although the industry continues to make progress despite the recession, the high cost of drilling--and the uneven track record of companies pioneering deep geothermal wells--make financing these projects a challenge.

Companies also face long delays in getting drilling permits for federal sites from the Bureau of Land Management, which has been overwhelmed by demand from renewable energy developers, especially in the solar sector.

Industry veterans also complain on the long wait for stimulus funds from the Department of Energy's Geothermal Technologies Program.

"Investors are basically waiting to see who is going to get DOE funding," said the report's author, Dan Jennejohn. "They are more reluctant to invest in geothermal projects until the DOE funding comes out." 

Posted by: Jonathan Marshall

While solar power gets much of the good buzz these days, geothermal power holds the most promise as a clean and economical alternative to fossil fuels, according to a comparative technology study by two experts at NYU's Stern School of Business.

PG&E opened the first commercial geothermal plant in 1960, and today that technology supplies about five percent of the utility's power, more than any other form of renewable energy. But long as it's been around, the technology has never enjoyed significant funding to exploit its full potential.

From 1974 to 2005, nine major governments collectively spent almost $38 billion on fossil fuel technologies and about $11 billion on solar, compared to a mere $2.6 billion on geothermal energy. Yet more than any other sector of power generation, the geothermal industry "shows exponential growth" in the payoff (kWh per dollar) from R&D spending and shows "no indication of slowing performance improvement," the authors conclude in their new paper in the journal Energy Policy.

Geothermal is already one of the least expensive forms of renewable energy--less than a third the cost of concentrating solar power or utility-scale photovoltaic power, according to figures they supply. The authors estimate that with an R&D investment of only $7.5 billion--peanuts compared to the energy budgets of the nine governments--geothermal would likely become even less expensive than generation from fossil fuels today.

As previously discussed in NEXT100, enhanced geothermal recovery techniques, still in the testing phase, could radically increase the industry's potential. And just last week the DOE's Pacific Northwest National Laboratory reported the breakthrough discovery of a new fluid--based on "nanostructured metal-organic heat carriers"--that could be heated by underground geothermal reservoirs and used to drive high-efficiency power turbines.

Total funding for the lab's research: just $1.2 million.  At this rate, maybe geothermal won't even need the full $7.5 billion to prove its mettle.

Posted by: Jonathan Marshall

A little-reported "well incident" this week in a remote part of Australia is a sobering reminder of the challenges facing the geothermal industry's next generation of technology.

Geodynamics Ltd., the largest publicly traded company in Australia focused on recovering goethermal energy by injecting water into hot granite rocks deep underground to create steam, acknowledged a breach of its first commercial-scale production well in the Cooper Basin in the southern part of the country.

The company says the crew responsible for commissioning the 1 MW plant is being "progressively demobilised" while experts (reportedly flown in from the United States) assess damage to the Habanero 3 well, which is 13,800 feet deep. Geodynamics offered no estimate of when operations would resume. 

Geodynamics is a leader in the field of enhanced geothermal technology, which holds tremendous promise as a source of renewable energy. A massive report issued by the Massachusetts Institute of Technology in 2007 estimated that it could affordably supply 10 percent of U.S. power needs within 50 years, at about the same low price as today's coal-fired plants.

Today's conventional plants, such as those located at The Geysers in Sonoma County (the world's largest geothermal field, with 850 MW of power capacity), use existing reservoirs of underground hot water or steam to drive turbines. Promising locations for new production including California's Imperial Valley, northern Nevada and the Oregon and Washington Cascades.

But if water can be injected from the surface, the main resource a developer needs is hot rocks, which exist almost everywhere on earth if you dig deep enough. Plants in The Geysers pioneered this concept by injecting treated effluent from nearby cities to supplement natural steam. The trick is finding rocks with the right characteristics to allow water to filter through them and heat up reliably.

Experts say that once the geologic and engineering challenges are worked out, so-called "enhanced geothermal" energy could become one of the 21st century's most promising resources.

"It brings an absolutely gigantic amount of power into the realm of economic feasibility," said Susan Petty, a former MIT scientist and chief technology officer of Sausalito-based AltaRock Energy, an enhanced geothermal energy firm. AltaRock Energy, which is funded in part by Google.org and the Department of Energy, has a major demonstration project in The Geysers area.

Paul Brophy, past president of the Geothermal Resources Council and a consulting geologist to one of the industry's leading drilling companies, agreed. "It would not be unreasonable to say the broad potential for geothermal is almost limitless," he told NEXT100. "Oil and gas wells go down 30,000 feet or more. You could drill down that far almost anywhere in the earth's crust and attain the sort of heat" necessary for geothermal power.

As it happens, however, most of the test wells in this country are being drilled in the West, where hot rocks lie closer to the surface, minimizing drilling costs.

Geothermal isn't the sexiest of renewable energy sources--it certainly can't compete with space solar power in that respect--but it's a proven workhorse. Unlike wind and solar power, it provides power around the clock, every day. It also has a much smaller footprint, Brophy noted, thus creating fewer environmental obstacles.

Around the world, geothermal supplies more than 10,000 MW of power. The United States is the leading producer, and California the leading state. Across the country, 126 new projects are under development--27 of them in California--with the potential to produce as much as 5,500 MW of new power, according to the Geothermal Energy Association.

PG&E played a major part in developing the industry, opening the first commercial geothermal power plant at The Geysers in 1960. The utility was required to divest its plants there in the late 1990s, but PG&E still purchases about 5 percent of its power from them, making geothermal the single largest source of renewable power in its portfolio.

Thanks to significant injections of new R&D money from the Department of Energy in just the past couple of years, the geothermal industry is enjoying a rebirth, with a focus on enhanced recovery techniques. In addition, the Obama administration's new stimulus program set aside $400 million for new geothermal development, a landmark commitment of government resources. "Research is progressing very rapidly," Brophy said.

But Geodynamics' setback is a reminder that enhanced geothermal is still more promise than reality. Some estimates put the cost of their wells at $12 million each, so the company can't afford too many mistakes.

But Brophy takes the news in stride. "When you are trying to do things for the first time, things will go wrong," he said. "We are still in the early stages of research and demonstration."