Week of April 14, 2014 GEA’s leading news and member company

The Geothermal Energy Association brings you this week’s leading news and member company headlines.

*Next Week: Geothermal Showcase to Offer Investors a Global Perspective on Opportunities
*GAO Report Shows NEPA Law, Intended for Transparency, Delays Projects
*U.S. Senate Likely to Take Up Tax Extenders Bill Soon
*DOE Issues Draft Loan Guarantee Solicitation
*SUN DAY Report Challenges EIA’s Renewable Energy Projections
*Ormat Technologies: Positive Achievements Earn Investor Attention
*U.S. Geothermal: Company Acquires Development Rights to Vale Butte Geothermal Resource Area

But first,

*Graph of the Week: Supporting Policies Key to Geothermal Growth in the U.S.

Nameplate Timeline with Policy Notes january2014

Click here for full stories:

Above: Our Graph of the Week gives the total nameplate capacity of geothermal energy in megawatts as counted in the U.S. from 1971 through 2013, and the timeline is marked where enacted policies coincided with periods of sector growth. Coordination between government, regulatory policy, and the geothermal industry was a key factor that helped the total reach 3,440 MW capacity as of the end of 2013. GEA staff Ben Matek summarizes how these well-constructed programs and clearly written policies helped facilitate periods of rapid expansion:

  • The Public Utility Regulatory Policies Act (PURPA) created a market for independent power producers that allowed for the rapid expansion of geothermal power.
  • California’s Geothermal Grant and Loan Program (GRDA) subsidized the costs of exploration often one of the riskiest phases of any geothermal power plant’s timeline in the late 70s and early 80s.
  • In the first decade of the 21st century, geothermal power qualified for the production and investment tax credit (PTC/ITC) which helped to make more projects economical.
  • The Department of Energy through the Geothermal Resource Exploration and Definition program was able to subsidize the cost of exploration on many sites focusing on small grants for early exploration.

The relationship between geothermal power and carefully-deliberated government policy continues as current public-private initiatives, such as the Salton Sea Restoration & Renewable Energy Initiative in Imperial Valley, California, could lead to another uptick in U.S. geothermal growth in the near future.

Next Week: Geothermal Showcase to Offer Investors a Global Perspective on Opportunities
Press Release (Washington, D.C.) April 15 ~ On April 22 (Earth Day), the Geothermal Energy Association will host the GEA International Geothermal Showcase, bringing together representatives from 34 countries and representing more than half of all geothermal projects worldwide.

“The International Showcase is the perfect opportunity for investors to get a primer on the opportunities available in the geothermal sector,” notes Karl Gawell, Executive Director, Geothermal Energy Association (GEA). “Showcase participants will represent more than half of all geothermal projects worldwide. Together, these projects could mean over 10,000 MW of new geothermal power and would represent around $45 billion in new investment.”

Recent reports have revealed that annual investment in geothermal was up in 2013 to approximately $3.2 billion. The countries at the Showcase represent 450 of the roughly 700 global projects and over 10.5 GW of the 12 GW of developing geothermal generation. These figures equate to over $40 billion of market investment in the global geothermal market. These data and more will be presented when GEA releases the results of its new U.S. and International Market Update exclusively to event attendees on April 22nd.

GEA is hosting the Showcase with support from organizations including the U.S. Trade and Development Agency, the Overseas Private Investment Corporation, the U.S. Agency for International Development, the U.S. Department of Energy Geothermal Technologies Office, the U.S. Department of State, U.S. Export-Import Bank, The World Bank, U.S. Department of Commerce, U.S. International Trade Administration, Inter-American Development Bank, Energy Sector Management Assistance Program and U. S. Energy Association.

The Showcase will also focus on geothermal project risks. This will be explored during the panel “How to Address and Reduce Geothermal Project Risks.” Panelist Douglas Hollett, Director of the Geothermal Technologies Office at the United States Department of Energy speaks to the federal role in domestic geothermal energy: “The Department is focused on reducing the costs and risks associated with geothermal expansion, and works closely with industry, university, and national laboratory partners to meet the challenges facing the sector,” says Hollett. “This will create a reliable pathway towards economical hydrothermal development and help make large-scale, cost-competitive EGS a reality.”

Significant growth is expected in the global geothermal power industry over the next few years as countries in East Africa push projects toward completion. Kenya and Ethiopia are building power plants greater than 100 MW. For comparison the average size of a geothermal power plant in the United States is about 25 MW. A Showcase panel will delve into the Latest Geothermal Developments in East Africa, featuring panelists including Eng. Stanley Kamau, Director, Public Private Partnership (PPP) Unit, Ministry of Finance, Kenya; Dr. Silas Simiyu, Managing Director, Geothermal Development Company; and Gosaye Mengistie Abayneh, Director, Energy Studies and Development, Ministry of Water, Irrigation and Energy, Ethiopia. “The GEA International Geothermal Showcase serves a critical role in facilitating direct dialogue among the policy makers, industry representatives, and other stakeholders who are driving geothermal development in East Africa and worldwide. The forum provides a welcome opportunity for the global geothermal community to share policy and technical best practices and for industry players from around the world to connect and network in order to move projects forward,” says Andrew Palmateer, Acting Deputy Director of the U.S.-East Africa Geothermal Partnership, a public-private partnership between the U.S. Agency for International Development and the Geothermal Energy Association, implemented through the U.S. Energy Association.

Mike Long, Vice President, Galena Advisors, a division of POWER Engineers, Green level sponsor for the Showcase, will also join the East Africa panel. Long notes: “POWER Engineers/Galena views the international market as the key growth sector in the geothermal industry. The GEA International Showcase provides a valuable opportunity to interface with key leaders from the international geothermal community. We are looking for project development plans, understand regional challenges and meet key decision makers.”

Many of the event supporters including USTDA, Export-Import Bank, World Bank, OPIC, U.S. Dept. of State, and Inter-American Development Bank, will join a roundtable discussion on funding opportunities. Panelist Jamie Merriman, Country Manager and Renewables Sector Team Lead, USTDA remarks: “USTDA is delighted to support the 2014 GEA International Geothermal Showcase. In order to accomplish its mission of linking U.S. businesses to global infrastructure opportunities, USTDA builds partnerships between U.S. companies and overseas project sponsors to bring proven private sector solutions to developmental challenges. Events like this Showcase provide an important forum for us to exchange ideas with U.S. industry and learn about cutting edge U.S. technologies that can catalyze the development of geothermal power in our partner countries.”

Mary Mervene, Managing Director, Structured Finance, Overseas Private Investment Corporation, will also join the roundtable discussion on funding opportunities. “OPIC is excited for the GEA Showcase to learn more about this expanding sector and how OPIC can play a larger role in geothermal projects worldwide,” says Mervenne. “Geothermal has a great potential as a resource for future OPIC power projects, especially in Sub-Saharan Africa. OPIC is a key agency in President Obama’s Power Africa Initiative, with goals to bring power access to tens of millions across the African continent. Geothermal is an abundant resource on the continent, and OPIC is proud to have recently provided support for a large and exciting geothermal project in Kenya’s Great Rift Valley. We look forward to continuing to explore potential in geothermal, and the GEA conference is an exciting opportunity to do just this.”

Joining the roundtable discussion, Tim Williamson, Deputy Director, Office of Alternative & Renewable Energy, U.S. Department of State says: “Geothermal energy offers a unique global opportunity to provide a reliable, consistent base load power source. Despite significant progress RD&D over the past 35 years, installed geothermal capacity represents just 6% of estimated 139 GW total global potential in 39 countries, as a result of risks associated with the legal, regulatory and financing frameworks make drilling, exploration and project management challenging. The most promising mechanism proposed to-date to reduce the risks associated with geothermal drilling is the Clean Technology Funds, which can be used to mitigate the persistent high risk associated with deep slim hole exploration and production well drilling. We’re coming together on April 22 to work to make use of these funds and make geothermal a greater part of our energy future.”

Pierre Audinet, Clean Energy Program Team Leader, ESMAP Program, The World Bank, will also participate in the Public Funding discussion. He remarks: “The World Bank’s Energy Sector Management Assistance Program (ESMAP) is the lead agency and initiator of the Global Geothermal Development Plan, which works to transform the energy sector of developing countries by scaling up the use of geothermal power. The Global Geothermal Development Plan brings together financing from diverse international sources, including bilateral agencies and multilateral banks, and targets it at the primary obstacle to geothermal expansion: the initial, risky test drilling phase.”

Another supporter of the event, the International Trade Administration, seeks to support US exports in these markets. Chandra Brown, Deputy Assistant Secretary for Manufacturing, U.S. Department of Commerce, International Trade Administration says: “As noted in our Renewable Energy Top Markets Study, the United States enjoys a strong and stable geothermal supply chain. As power demands continue to increase worldwide, the International Trade Administration is committed to supporting U.S. geothermal companies, helping them access foreign markets.”

The following countries will be represented at the Showcase: Chile, Mexico, Costa Rica, Thailand, St. Kitts and Nevis, Spain, Croatia, Rwanda, Pakistan, Dominica, the Philippines, Nicaragua, India, Belgium, Germany, Nigeria, Colombia, Fiji, Iceland, Commonwealth of Dominica, Tanzania, Japan, Switzerland, Uganda, Kenya, Taiwan, New Zealand, Ethiopia, Indonesia, Romania, Turkey, Italy, and the United States.

At the International Showcase, GEA will bring together industry leaders for a media availability at 12:15pm ET to discuss the release of GEA’s new, consolidated annual update on the U.S. and international geothermal industries, as well as geothermal trends and governmental policies in the U.S. and around the world. There will also be a dial-in option for journalists who can’t attend in person. For more information, or to request press credentials, please contact Shawna McGregor, The Rosen Group, 917 971 7852 or shawna@rosengrouppr.com.

For more information about the International Showcase or to register for the conference, please visit www.geo-energy.org. For questions regarding sponsorships, please contact Kathy Kent at Kathy@geo-energy.org.

About the Geothermal Energy Association: The Geothermal Energy Association (GEA) is a trade association comprised of U.S. companies that support the expanded use of geothermal energy and are developing geothermal resources worldwide for electrical power generation and direct-heat uses. GEA advocates for public policies that will promote the development and utilization of geothermal resources, provides a forum for the industry to discuss issues and problems, encourages research and development to improve geothermal technologies, presents industry views to governmental organizations, provides assistance for the export of geothermal goods and services, compiles statistical data about the geothermal industry, and conducts education and outreachprojects. For more information, please visit www.geo-energy.org. Subscribe to GEA’s newsletter here. Follow GEA on Twitter. Become a fan on Facebook.

GAO Report Shows Law Intended for Transparency Delays Projects
Press Release (WASHINGTON) April 15 ~ IER Senior Vice President Dan Kish issued the following statement after the release of the Government Accountability Office’s (GAO) report on the National Environmental Policy Act (NEPA):

“GAO’s report indicates that NEPA is long past broken. What began as a law to encourage public participation and transparency has turned into a tool for delaying projects on federal lands. It’s paralysis by analysis. Opponents of energy production have been able to abuse NEPA by turning the process into an unbearable waiting game that delays decisions for certain projects. For businesses and people waiting to go to work, time is money and a delayed decision can be the same as a denied decision – no project and no paycheck.

“Between drawn-out litigation battles and environmental impact statements, these delays can be staggering. For example, environmental impact statements, which were expected to take no more than 12 months 30 years ago, now take an estimated 4.6 years to complete. You can send a kid through college and they can start on an advanced degree faster than it takes to put together an EIS. Because of this, investments that could have been made, weren’t made and the American people have been deprived of their own energy resources.

“As GAO shows in their report, federal agencies have enabled the breakdown of NEPA by failing to keep tabs on the costs, benefits, time frames, and litigations related to the rule. NEPA is broken and if it’s not fixed it will continue to have damaging effects on American energy production of all kinds.” To read the GAO report, click here.

U.S. Senate Likely to Take Up Tax Extenders Bill Soon
Senate Majority Leader Harry Reid announced on a call with reporters that he plans to bring up the so-called tax extenders package to the floor next work period, which means action is likely in May. The legislation known as the EXPIRE Act (Expiring Provisions Improvement Reform and Efficiency Act) was passed by the Senate Finance Committee in Executive Session April 3. The final legislation was approved by the Committee on a voice vote.

For the renewable production tax credit, including geothermal energy, the key vote came on an amendment by Senator Toomey to strike the provision from the bill. This amendment was defeated by roll call vote of 6 ayes and 18 nays. The Committee recorded those voting on the amendment as follows; Ayes: Hatch, Roberts, Enzi, Burr, Isakson, Toomey; and Nays: Wyden, Rockefeller, Schumer, Stabenow, Cantwell, Nelson (proxy), Menendez (proxy), Carper (proxy), Cardin (proxy), Brown (proxy), Bennet, Casey (proxy), Warner (proxy), Grassley, Crapo (proxy), Cornyn (proxy), Thune, Portman.

Subsequent to the Senate Finance action, the House Ways and Means Committee held a hearing on April 8 that focused on “the value in having stable, permanent tax policy for employers, as well as the problems caused by tax policies that frequently expire and are extended for short periods of time (and often retroactively). To that end, the hearing specifically will consider those expired business tax provisions that are either made permanent or are provided long-term extensions under the discussion draft of the Tax Reform Act of 2014.”

Details of the actions taken by the Senate Finance Committee are available at: http://www.finance.senate.gov. Statements made at the Ways and Means Committee hearing can be viewed at: http://waysandmeans.house.gov. See also our GeoEnergyWire/GEA news article from April 3, “Tax Extenders Bill Passes Committee with 2-Year Extension of Geothermal PTC.”

DOE Issues Draft Loan Guarantee Solicitation
This week the the U.S. Department of Energy issued a draft loan guarantee solicitation for innovative renewable energy and energy efficiency projects. The finalized solicitation is expected to make $4 billion in loan guarantees. DOE is now seeking public comments. DOE Secretary Ernest Moniz said in a statement: “Through our existing renewable energy loan guarantees, the Department’s Loan Programs Office helped launch the U.S. utility-scale solar industry and other clean energy technologies that are now contributing to our clean energy portfolio. We want to replicate that success by focusing on technologies that are on the edge of commercial-scale deployment today.”

SUN DAY Report Challenges EIA’s Renewable Energy Projections
Press Release (Washington DC) April 15 ~ Says renewables could hit 16% of U.S. Electrical Generation in Five Years; Not 27 Years ~ In a new 32-page study released today, the SUN DAY Campaign challenges assertions by the U.S. Energy Information Administration (EIA) that renewable energy sources will provide only 16% of the nation’s net electrical generation by the year 2040. Using EIA’s own previously published data, the analysis shows that it’s more likely the 16% level could be reached within five years.

In its “early release overview” of the “Annual Energy Outlook 2014” (published December 16, 2013 with the final release of the full AEO2014 now slated for April 30, 2014), the EIA’s Reference Case foresaw renewable energy sources (i.e., biomass, geothermal, hydropower, solar, wind) accounting for just 16% of the nation’s net electrical generation by 2040.

However, EIA’s own published data for the 11-year period January 1, 2003 through December 31, 2013 reveal that the percentage of the nation’s net electrical generation represented by renewable energy has expanded from less than 9% in 2004 to nearly 13% in 2013 – i.e., within a decade. Given the relatively consistent growth trends of the past decade or longer for most renewable energy sources and their rapidly declining costs, it seems improbable that it will require another 27 years to grow from 13% to 16%. Thus, EIA’s forecast is not just unduly conservative; almost certainly, it is simply wrong.

In fact, if the trends reflected in EIA data from the past decade continue, renewable energy sources could increase to as much as 13.5% of net U.S. electrical generation in 2014, to 14.4% in 2015, to 15.3% in 2016, and reach or exceed 16.0% no later than 2018 — i.e., within five years and not the 27 years forecast by EIA. At worst, they would reach 16% by 2020.

“Inasmuch as policy makers in both the public and private sectors – as well as the media and others – rely heavily upon EIA data when making legislative, regulatory, investment, and other decisions, underestimation can have multiple adverse impacts on the renewable energy industry and, more broadly, on the nation’s environmental and energy future,” noted Ken Bossong, Executive Director of the SUN DAY Campaign. “Consequently, EIA is doing a serious disservice to the public by publishing analyses that are inherently inconsistent with its own historical data and near-term projections.”

The full 32-page report includes the assumptions and projections made, on a technology-by-technology basis, using EIA data. In addition, following the projections provided for each technology is a listing of recent studies and news reports that offer alternative or complementary scenarios – many of which are more aggressive than those provided by the SUN DAY Campaign. These additional studies suggest that even SUN DAY’s analysis may prove to be unduly conservative.

The SUN DAY Campaign is a non-profit research and educational organization founded in 1992 to promote sustainable energy technologies as cost-effective alternatives to nuclear power and fossil fuels.

Ormat Technologies: Positive Achievements Earn Investor Attention
This week GEA member Ormat Technologies was positively reviewed in a Motley Fool article that looked at 2013 operational achievements and plans for future expansion ahead. The article also mentions GEA members MidAmerican Renewables and Calpine Corp. “The possibilities of developing geothermal resources are not only present in California but around the world, and Ormat is well positioned to profit should the potential be realized. Regardless, the company’s improved performance in 2013 may lead to even better performance in 2014,” according to the article.

U.S. Geothermal: Company Acquires Development Rights to Vale Butte Geothermal Resource Area
Press Release (BOISE, IDAHO) April 14 ~ U.S. Geothermal Inc. (TSX:GTH)(NYSE MKT:HTM), a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy, announced today that it has acquired geothermal property for evaluation of a new project at Vale, Oregon. The site is located 12 miles east of the Neal Hot Springs geothermal power plant.

The new leases encompass 368 acres of geothermal energy and surface rights acquired from private landowners, Malheur County, and the City of Vale. The property is within the Vale Butte geothermal resource area and provides the opportunity to evaluate development of a known geothermal resource. A prolific, shallow reservoir located along the north edge of the leasehold area has been used for many years in an agricultural drying facility and a mushroom growing operation.

An extensive database of geophysical and geological information from previous geothermal exploration in the Vale Butte area was used in the evaluation of the prospect. Geochemical analysis of samples taken from shallow, hot wells results in a calculated geothermometer that indicates a potential reservoir temperature of 311ºF to 320ºF. Past exploration drilling near the site by Trans Pacific Geothermal and Sandia National Laboratory encountered temperatures in excess of 300°F in the basement rocks.

The Company is developing a staged geophysical and exploration drilling program to evaluate the potential for commercial power production. Fault structures and hydrologic characteristics have been identified that are similar to the Neal Hot Springs site, and are wholly contained within the newly acquired lease package.

“We are excited to acquire this collection of properties in the Vale Butte resource area, which is close to our current operating facility at Neal Hot Springs. This project adds to our pipeline of choice development opportunities and continues to build on our growth strategy for the Company,” said Dennis Gilles, Chief Executive Officer of U.S. Geothermal Inc. “Vale Butte is close to transmission lines, and is in a great location to serve the Pacific Northwest energy market.”

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