Leading news: Gov’t Decisions, Company Advancements Affect the Geothermal Future

“This week’s top news for geothermal development and GEA members”

This week’s headlines include tax extenders and other legislation in Congress; geothermal engagement that is happening on the state, federal, and international levels; and updates from GEA members Atlas Copco, Alternative Earth Resources, ElectraTherm, and Enel Green Power North America. This week’s visual shows the economic contribution that is possible from geothermal in various states over the next 30 years:

Table 3 of GEA's Geothermal 101: Basics of Geothermal Energy
Table 3 of GEA’s Geothermal 101: Basics of Geothermal Energy [PDF]
The table summarizes a 2006 WGA estimate that near-term geothermal development of approximately 5,600 MW would result in nearly $85 billion dollars to the U.S. economy over 30 years. Potential also exists in Wyoming, Montana, Texas, Kansas, Nebraska, South Dakota, and North Dakota, but the resource in those states was not studied in the WGA report.

Click below for “This week’s top news for geothermal development and GEA members”

*On Our Radar: Tax Extenders in the Senate and the House
*Energy Programs Would be Slashed in DOE R&D Act of 2014 
*EPA Rules Open Significant Potential for Geothermal 
*Dewhurst Group, EAGP Present Geothermal to International Development Community
*California Congressman Addresses Geothermal’s Unique Values
*Alaska Geothermal Data Now Available to National Audience
*Atlas Copco Included in Top 10 of Newsweek’s Sustainability Ranking
*Alternative Earth Resources to Sell Project Assets to Ormat
*ElectraTherm’s Low Temperature Technology Ideally Suited for Small Geothermal Resources in Japan
*Enel Green Power North America Named “Energy Innovator of the Year” in Utah 

On Our Radar: Tax Extenders in the Senate and the House
In the Senate, politics continue to put tax extenders bills on hold. Republicans are insisting on amendments on a range of issues, including Obamacare. Included in the package is a provision to extend production tax credits (PTC) for geothermal energy for two years, and it would also address extensions for other renewable sources. Senate Majority Leader Harry Reid has indicated the PTC extension bill could be among those that will likely be pushed to a lame duck session at the end of the year.

But Senator Wyden and others continue to pare down a list of amendments in efforts to achieve agreement.

Both the House and Senate continue to muse over comprehensive tax reform, with The Senate Finance Committee scheduling hearings on it for later this summer.

Meanwhile, the House continues to act one at a time on provisions that it wants to make permanent from its “extenders list,” which does not include the PTC. (The bills include making 2013 small-business expensing levels permanent; reducing built-in gains tax holding period to five years from its current 10; and making certain charitable giving rules permanent.) [finance.senate.gov; wnax.com; csmonitor.com]

Energy Programs Would be Slashed in DOE R&D Act of 2014
The House Committee on Science, Space, and Technology is looking at a bill entitled the Department of Energy Research and Development Act of 2014. An early draft of the bill would cuts Energy Efficiency and Renewable Energy (EERE) R&D by 29%, or $486 million, below FY14 appropriated levels; ARPA-E – 14.3%, or $40 million, below FY14 levels; and Office of Science’s Biological and Environmental Research Program (BER) by 18.1%, or $110 million, below FY14 levels.

Among its additional inclusions, the bill would also prevent Fossil Energy R&D activity from being used for regulatory assessments; remove “reductions of energy-related emissions, including greenhouse gases” from goals of ARPA-E; and would reduce the maximum amount that DOE can provide for renewable energy demonstration projects in public buildings from 40% to 20%.

The House Committee had a markup scheduled for Wednesday, June 11, that was cut short by a Democrat request to read the full text of the bill and a Republican proposal to instead adjourn the meeting. Opening statements were given by Representatives Cynthia Lummis (R–WY) and Eric Swalwell (D–CA). Lummis said the bill would reverse the “unchecked” growth in alternative energy programs by the Obama administration, while Swalwell represented the view that the bill applies “ideological considerations, not science,” to the type of research DOE could support. [sciencemag.org]

EPA Rules Open Significant Potential for Geothermal 
GEA Executive Director Karl Gawell commented to press on the EPA’s proposed emissions ruling, out this month. “The EPA rules will let the states be the final arbiter of how their programs work, so much of what we see now is illustrative but not binding,” he says. “It’s worth noting that EPA also says they will also require states to “true up” their RPS efforts to make sure the RPS is actually achieving the results needed.”

“Adoption of the rule and state implementation plans will open significant new potential for renewables including geothermal. For the 12 states with geothermal production under development, if they all adopt the RPS levels proposed, it could mean as much as 4,000 MW of new geothermal…assuming 100% of the RPS goal was met with geothermal…which we know it wont be, but it is useful to see the potential involved.

“Further, the analysis that EPA has done does not recognize the added value for geothermal as a baseload technology to displace coal, nor does it account for the emissions that will result by the need to firm variable resources. So, when all of these values are considered, we think geothermal will have a better chance to gain market share than they analyze, and under the proposed rules EPA will review the results to make sure the RPS’s achieve the carbon savings required and states will have to make adjustments if they don’t.

“I would also point out that EPA goes a ways to seek to protect nuclear power,” according to Gawell. “They should also ask how to protect the existing renewable base, which now produces more power than nuclear plants. The RPS programs are generally tilted toward encouraging new production, and existing renewables are often an afterthought in state policy. It may be an area that EPA will have to do some further examination.” See also a Utility Drive article titled “The role of renewables in the new EPA emissions rule.”

Dewhurst Group, EAGP Present Geothermal to International Development Community
On June 4, 2014, the Energy & Infrastructure Workgroup of the Society for International Development Washington, DC Chapter, held an event entitled “Geothermal Energy: Opportunities and Challenges in the Developing World.” The group looks at economic and societal questions and considers sustainable integration into communities of the world. Speakers included Kara Dewhurst, Chief Social Scientist with the Dewhurst Group, a PhD candidate at the University of Virginia; Ms. Britt Shaw, Program Coordinator at the US-East Africa Geothermal Partnership (EAGP), United States Energy Association (USEA); and Warren Dewhurst, Managing Director of the Dewhurst Group.

The discussion revolved around experiences in international partnerships for geothermal development in Colombia, Peru, East Africa, and around the world. The Dewhurst Group, a GEA member, is involved in social assessments that are separated from environmental assessments, and this could become a model for doing geothermal business around the world. The EAGP is GEA’s public-private partnership with the U.S. government and works alongside efforts in East Africa for capacity building such as training and best practices for international partnership.

GEA staff was also on hand at the event and provided copies of the GEA handbook “Geothermal 101: Basics of Geothermal Energy” to attendees. A detailed summary of the event is available at sidw.org.

California Congressman Addresses Geothermal’s Unique Values
California Congressman Mike Thompson (D-St. Helena) commented on the state’s geothermal resource. He states:

“It’s widely acknowledged that the way utilities purchase renewable energy does not take into account all the costs and benefits of competing energy resources. To date, it’s been about which power producer can provide energy at the lowest cost without considering the costs associated with delivering that resource to consumers or the economic and environmental benefits of a specific resource. This poses several inherent biases against geothermal power.

“First, wind and solar resources produce power intermittently. At night, or on cloudy or calm days, their reduced output means additional generation is required to fulfill backup energy needs. Geothermal plants, however, produce power predictably and consistently. Unfortunately, current procurement rules do not take this reliability into account when “scoring” the value of competing renewable resources.

“Second, federal tax credits have helped reduce the overall cost of solar and wind energy. It’s a justifiable policy that I support fully, but it means their costs are subsidized in ways that geothermal cannot match.

“Third, geothermal employs more people both during construction and post construction than most other renewable technologies. The Geysers employs 300 full-time employees and more than 150 contractors who support our local economy. The Geysers also is the largest taxpayer in Sonoma and Lake counties.

“Finally, geothermal provides important environmental benefits. The Geysers helps reduce greenhouse gas emissions to the equivalent of removing 432,000 cars from the road, meaning cleaner air for local towns and cities. The Geysers efficiently uses wastewater from the city of Santa Rosa and Lake County to generate more energy and solving an environmental problem for those communities.

“Yet, absurdly, none of these economic and environmental benefits are valued in the current “scoring process,” putting geothermal energy at a competitive disadvantage.”

Alaska Geothermal Data Now Available to National Audience
Press Release (Fairbanks, AK)— The Division of Geological & Geophysical Surveys has contributed data relating to Alaska’s geothermal resources to the U.S. Department of Energy’s brand-new National Geothermal Data System, available at http://www.geothermaldata.org. This free online resource officially launched on April 30.

With data from all 50 states, the National Geothermal Data System is intended to aid efforts to explore geothermal resources as a source of clean, renewable energy. With funding support from the Department of Energy, DGGS and other state geological surveys have digitized and made available online more than 30 major types of data, resulting in the availability of more than 7 million interoperable data points, including 650,000 well logs, 530,000 borehole temperatures, and 1.7 million oil and gas, water, and geothermal well headers.

In Alaska, geothermal exploration activities in the late 1970s and early 1980s generated considerable quantities of data that was not readily accessible and in some cases unpublished. Currently, a fresh cycle of geothermal exploration is underway in Alaska, producing a wealth of new geothermal data. Alaska’s contribution to the national project comprises at-risk legacy data and new exploration data. These resources include 51 hot springs (hotter than 50°C/122°F) and 46 “warm to cool” springs (cooler than 50°C/122°F). Thirty-six are in the Aleutian Arc and south-central Alaska, 39 are mostly in the central interior belt that extends from the Seward Peninsula to Circle Hot Springs, 4 are in the Wrangell Mountains, and 16 are in Southeast Alaska.

The Alaska data pertains to:
•Geothermal springs (97 records that include location, temperature, and flow rate);
•Aqueous geochemistry (653 records);
•Geothermal wells (121 records from 9 well sites);
•Bottom-hole temperature data from oil and gas exploration wells (409 records);
•Volcanic vents and fumaroles (395 records);
•Earthquake events near hot springs (1,974 events within 5 km of hot springs); and
•Direct use geothermal sites (15 sites that use geothermal resources for recreation, electrical power generation, space heating, and agriculture).

As the result of this program, DGGS is also creating a “Geothermal Sites of Alaska” online interactive GIS-based map expected to be released by December 2014.

The state surveys’ contributions to the National Geothermal Data System were funded through a $21.9 million agreement from the DOE’s Geothermal Technologies Office and led by the Arizona Geological Survey on behalf of the Association of American State Geologists (AASG). Find out more about the project at http://geothermaldata.org/ and the U.S. Geoscience Information Network at http://usgin.org/. Additional information on the Association of American State Geologists is available at http://www.stategeologists.org/.

Atlas Copco Included in Top 10 of Newsweek’s Sustainability Ranking
Press Release, June 11–Atlas Copco has been ranked seventh by Newsweek Green Rankings, one of the world’s foremost corporate environmental rankings of the 500 largest publicly-traded, global companies by market capitalization.

Newsweek Green Rankings uses data from Bloomberg’s Professional Service, which includes sustainability information from over 5,000 public securities and CDP, an international nonprofit that helps companies measure, disclose, manage and share vital environmental information. A total of 809 qualified companies were scored against eight key performance indicators based on the companies’ publically available data. Indicators include total energy consumption, greenhouse gas emissions, water use, waste generation and recycling, reputation and sustainability incentives for senior management.

“We are extremely proud to be recognized by an organization like Newsweek for our commitment to sustainable productivity,” said Jim Levitt, president of Atlas Copco North America. “This top 10 ranking is a reflection on our employees and their dedication to our sustainability initiatives surrounding safety, health and environmental issues.”

Earlier this year, Atlas Copco was ranked as one of the most ethical companies by Ethisphere Institute and recognized by the Global 100 list as one of the world’s most sustainable companies.

Atlas Copco AB continues to be a member of the Dow Jones Sustainability Index, the UN Global Compact 100 and the FTSE4Good Index; the company has also been named to Forbes’ 100 Most Innovative Companies list.

Alternative Earth Resources to Sell Project Assets to Ormat
Press Release (Vancouver, B.C.) June 11–Alternative Earth Resources Inc. (“AER”) (TSX.V: AER) is pleased to announce that it has signed a non-binding Letter of Intent (LOI) with Ormat Nevada Inc. (“Ormat”), whereby Ormat has the right, following a due diligence review, to purchase all of AER’s Crump Geyser (50% interest), North Valley and New Truckhaven geothermal project assets for a cash payment of US$1,500,000. AER has received a $50,000 deposit in respect of this LOI.

A definitive Asset Sale Agreement (“ASA”), to replace the LOI by June 30, 2014, is subject to the approval of the Board of Directors of AER and Ormat, the approval of the shareholders of AER at a Special Meeting to be in late July, 2014, and the acceptance of the TSX Venture Exchange. The ASA, if approved, is expected to close on or about July 31, 2014.

In addition to project assets covered under the ASA, AER had cash and cash equivalent assets of US$1.2 million as of March 31, 2014. The asset sale transaction will free up additional cash of US$175,000 currently pledged for project drilling bonds and will remove a liability for project well abandonment costs of approximately US$450,000.

The Company intends to pursue other opportunities in the mineral resource development sector.

ElectraTherm’s Low Temperature Technology Ideally Suited for Small Geothermal Resources in Japan
Press Release (RENO, NV) June 8–ElectraTherm, a leader in distributed heat to power generation, announces the continued success of its Organic Rankine Cycle (ORC) technology with more than 200,000 hours of fleet run time and 39 commercial sites around the globe. The heat to power technology is well-suited for low temperature geothermal, and ElectraTherm was sponsored by the US Department of Energy to design a fully integrated, packaged, robust solution specifically targeting small and distributed geothermal resources. ElectraTherm has two sites operating on geothermal fluids — one in Nevada and one in Romania. Both sites combine for more than 10,000 hours of successful geothermal power plant operation. Japan and other geographical regions in Southeast Asia offer a particularly good fit for ElectraTherm technology with the prevalence of onsens, district heating systems and other accessible low-temperature resources, higher costs of power, and incentives for alternative clean energy sources.

ElectraTherm’s Green Machine produces up to 110kW of electricity from the low temperature (77-116°C) hot water without any fuel or emissions. The geothermal sites in Romania and Nevada utilize geothermal heat at 102°C and 107°C respectively.

“The Green Machine captures geothermal heat to generate power at temperatures and flows most ORC technologies cannot attain,” said Mike Olari, President of Energy Power Holdings, the ElectraTherm distributor that installed the equipment in Romania. “The robustness of the machine and the ease of installation make this application easily repeatable for the vast low-temperature geothermal resources available worldwide.”

Indonesia and Japan are the second and third largest geothermal resources in the world, according to the Geothermal Research Society of Japan. Utilizing ElectraTherm’s ORC and patented technology, these markets have the potential for an attractive return on investment and fossil-fuel free power generation. New government policies and commitments to clean energy in Southeast Asia further increase the investment opportunity in these regions. Particularly in Japan, a 40 yen/kWh feed-in-tariff for geothermal is available for 15 years, which can equate to 30-40% IRR’s and less than three year payback periods.
ElectraTherm provides free project assessments to determine estimated payback, outputs and efficiencies on individual sites. Visit the website for more information or to receive a project assessment.

Enel Green Power North America Named “Energy Innovator of the Year” in Utah
Press Release, June 9–EGP-NA accepted the award from Governor Gary R. Herbert during the Third Annual Governor’s Energy Development Summit in Salt Lake City, Utah–On June 4, 2014, Enel Green Power North America (EGP-NA), the Enel Green Power Group’s company dedicated to the developing of renewable energy in North America, received the award as Energy Innovator of the Year for its Cove Fort Geothermal Project during Governor Gary R. Herbert’s second annual Governor’s Excellence in Energy Award ceremony.

EGP-NA accepted the award from Governor Gary R. Herbert during the Third Annual Governor’s Energy Development Summit in Salt Lake City, Utah. The event, organized by the Utah Office of Energy Development was attended by over 1,300 people.

This award recognizes the offerings of energy companies to Utah through contribution to innovation, the environment, and community leadership. EGP-NA’s Cove Fort Geothermal Project was submitted for energy innovation due to the company’s work to develop this geothermal field with a state-of-the-art, modern geothermal plant and well-field design.

Cove Fort is EGP-NA’s latest geothermal power plant. The 25-MW binary cycle geothermal facility is located in Beaver County, Utah, on one of the largest thermal anomalies in North America and one of the first geothermal fields developed in North America outside of California.

The plant was completed and connected to the grid in November 2013 and will be able to generate up to 160 Gigawatt hours (GWh) of power every year, avoiding the annual emission of around 115,000 tons of CO2 emissions into the atmosphere.

In the United States, Enel Green Power North America also owns and operates the Stillwater and Salt Wells Geothermal Projects, which are located near Fallon, Nevada, and have a combined total installed capacity of 47 MW. Like Cove Fort, these plants also use medium enthalpy, binary cycle technology, which is among the most advanced in the sector.

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