Flexibility Benefits Make Geothermal the Highest Bar for Today’s Changing Grids

Flexibility Benefits Make Geothermal the Highest Bar for Today’s Changing Grids
By Leslie Blodgett and Ben Matek, Geothermal Energy Association
Energy resource technology that provides stability for changing U.S. power grids is available today from geothermal developers. This article discusses how geothermal plants can be engineered to dispatch by following load requirements while also ensuring environmental and economic benefits. See also the first article in this series on geothermal’s values: “Is Geo the Only Baseload Power Replacement that Makes Sense?

Rainbow over Puna Geothermal Venture, where geothermal’s dispatching benefits are being used optimally to provide low cost power and ancillary benefits on the Big Island of Hawaii.  The facility was recently expanded with a contract that dedicates eight of its 38 MW to providing flexible capacity for grid support.
Rainbow over Puna Geothermal Venture, where the power plant’s dispatching capabilities are being used optimally to provide clean, low-cost power and ancillary benefits on the Big Island of Hawaii. The facility was recently expanded with a contract that dedicates eight of its 38 MW to providing flexible capacity for grid support. Photo by Sam Abraham

Geothermal resources provide about 3,440 MW of power to the United States electrical grid as of early 2014. In a recent report, the Geothermal Energy Association explored geothermal power’s unique values that make it essential to the U.S. energy mix.  These plants have the same important baseload qualities coal now provides for over two thirds of the electric power generation in the nation.  Geothermal can be a high-value substitute for baseload fossil fuel or nuclear power plants, providing firm, clean power 24 hours a day regardless of extraneous conditions.

“As state and national policies move to significantly reduce climate changing power emissions, geothermal is a baseload clean energy that can replace baseload fossil fuels at a minimum cost to the power system,” says Karl Gawell, GEA’s Executive Director.

Gawell explains that as the grid uses more variable energy resources, which it most certainly will, the flexibility of geothermal energy is an attribute that regulators are still learning about.  “Flexible geothermal can help firm the system, allowing for imbalance, and is able to provide supplemental reserve,” he adds.

The U.S. continues to make strides toward a cleaner energy mix largely through wind and solar contracts to meet goals of state Renewable Portfolio Standards. This creates a greater need for firming power, and although geothermal can provide this as well, it could get lost in the mix if natural gas becomes a fallback to offset intermittency.

In his 2014 State of the Union address, President Obama called natural gas “the bridge fuel that can power our economy with less of the carbon pollution that causes climate change.” Geothermal energy, too, provides the same stabilizing function as natural gas and comes with unique environmental and economic ancillary benefits. Ancillary services support the transmission of electricity from a supplier to a purchaser and include scheduling and dispatch, reactive power and voltage control, loss compensation, load following, system protection, and energy imbalance.

A geothermal plant can be engineered to optimize these services. In most geothermal plants built today, operators can increase or decrease the amount of power being generated in order to match load requirements—such as making up for gaps caused by intermittency.   Geothermal energy and natural gas play a similar role to the power grid with the capability to dispatch, or to change a facility’s power output by ramping up or down depending on system needs.

Bob Sullivan, VP of Business Development of geothermal company Ormat Technologies, spoke with GEA staff about geothermal energy’s ramping capability and how it fits in to broader energy market discussions.

“Intermittent technologies have created a significant need for flexible power sources and other ancillary values such as frequency control and capacity. You don’t ramp intermittents but you can expeditiously ramp geothermal, and of course you can ramp natural gas,” he says.

“Typically you tend not be able to ramp nuclear power—the little bit we have left—or coal, because their efficiencies go down, their costs go up, and their emissions go up.”

While both geothermal power and natural gas are rampable, there are key differences. Geothermal energy dispatchability is particularly efficient due to:

  •         The amortized cost of the fuel source
  •         Predictable and low long-term economics
  •         Near-zero emissions

Geothermal energy’s fuel source is the geothermal fluid.  Developers invest upfront when the initial geothermal wells are drilled and then amortized over the life of the project. Gas, oil, and biomass are all examples of a commodity that must be purchased; the U.S. Energy Information Administration (EIA) calculates that geothermal energy’s fixed fuel cost is a key reason its estimated Levelized Cost of Electricity, or cost over the lifetime of a plant, is lower than most other forms of energy. An ICF International report to the Interstate Natural Gas Association of America explains that natural gas has the added complexity of fuel deliveries at specific times each day, with few modifications allowed.

“When a geothermal power plant ramps or flexes its output, there are no negative impacts on plant operational costs or negative environmental impacts,” Sullivan says. “The plant’s conversion of fuel to electricity is completely in the control of the plant operator, and changes to electrical output can occur quickly, with up to 30% of nominal output per minute.”

These efficiencies add up to steady geothermal economics, which Heidi Bethel, Public Relations Manager of Ormat, says represent one of the geothermal industry’s little-known benefits. “There seems to be a misconception that natural gas prices are low now and they’re always going to stay low,” she says. “If you look at the trends, historically natural gas prices fluctuate greatly.”

Over the past decade, fuel prices for natural gas varied from $2.79 per thousand cubic feet to $12.41 per thousand cubic feet, according to EIA. Winter 2014 saw an increase in demand that resulted in higher prices of around $6.90 per thousand cubic feet and led California’s ISO to issue a state-wide Flex Alert in early February, asking customers to use less energy.

Geothermal’s dispatching benefits are being used optimally today at Ormat’s Puna geothermal facility in Hawaii.  The facility was recently expanded with a contract that dedicates eight of its 38 MW to providing flexible capacity for grid support.

Ormat expanded its Puna, Hawaii geothermal facility in 2011 with 8 MW dedicated to flexible capacity needs. Photo: Ormat Technologies
Ormat expanded its Puna, Hawaii geothermal facility in 2011 with 8 MW dedicated to flexible capacity needs. Photo: Ormat Technologies

“To expand our facility, Hawaii Electric Light Company, the utility, needed to be able to dispatch us to follow electric load,” says Sullivan. “Though it turns out that we’re not dispatched down all that much, and that’s because we’re a low cost provider.”

“This is the only geothermal plant we know of that uses AGC,” adds Sullivan—that’s Automatic Generation Control. “To visualize it, there’s a control room at their operation center, so they basically have control of our 8-MW unit remotely and they can turn it up and turn it down based on the grid’s needs,” he explains. “It’s fully completely dispatchable; this is the highest bar when it comes to flexibility values.”

Sullivan explains that unexpected changes in the load such as those caused by intermittency can be more dramatic on an island than on a bigger grid, so the Puna facility can be considered “a case study on a micro scale.” Puna is the only plant that has dedicated ancillary services, but the capability exists for most binary geothermal plants built in the past decade; sooner or later, developers hope, more markets will catch up to the benefits.

It may just take time to see ramping valued, especially in valuing renewable energy technologies. “With most modern gas turbines, there is a marketing push for fast ramping turbines because that’s what everyone wants; well, geothermal is already there, and we come with the added benefit of being able to be flexible without the CO2,” says Sullivan.

Recently a Wisconsin geologist with a career in the oil and gas and portland cement industries approached the GEA explaining his interest in geothermal energy: “Arguing for renewables, particularly geothermal, is justifiable in itself when carbon-based fuels are the primary cause of the Earth’s present climatic imbalance.”

The worsening consequences of climate change are manifesting in extreme weather events that have devastated communities as diverse as the Eastern Shore of the United States and the Leyte geothermal area of the Philippines. Carbon reductions will need to reach as much as 80%, leaving little room to spare; the Union of Concerned Scientists and the U.S. Environmental Protection Agency (EPA) show that the natural gas share of electric sector CO2 emissions grew from 15% in 2008 to 24% in 2012.

So, natural gas is often viewed as a bridge fuel, but when geothermal is used optimally in the places where it’s available now, it provides environmental savings at zero or near-zero emissions (see Table 2 of GEA’s report, “The Values of Geothermal Energy”).
Emission levels coal naturalgas geothermal

In some of those places, the problem remains that systems aren’t set up to take advantage of the technology benefits.

“In California, for example, the contracts right now are not set up correctly; that’s not to say it won’t be fixed in the future,” says Sullivan.  California’s system ignores geothermal flexibility as well as other positive values it can offer to the grid, including its role as a non-intermittent baseload power source and its other significant ancillary benefits including frequency control.

Yet California’s Salton Sea Known Geothermal Resource Area represents one of the greatest opportunities for new geothermal energy development in the U.S.  The state’s Renewable Energy Credit (REC) program and geothermal governance will be further explored in an upcoming article in this series on the values of geothermal energy. See also a new report on the state of geothermal energy in California.

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