Leading news: Emerging Economies Powered Up in 2014

This post brings you GEA’s overview of the geothermal industry in 2014; the latest results for the geothermal production tax credit; a look ahead toward comprehensive tax reform; updates from GEA member companies AltaRock Energy, Atlas Copco, and U.S. Geothermal; changes in congressional committees; and more.

emergingeconomies2014

The above graph depicts both online capacity and capacity under development in regions where developing economies are emerging as leaders. It’s taken from GEA’s “The Status of Geothermal Power in Emerging Economies” (PDF) which was released in October 2014. With around 200 GWe of estimated geothermal power potential globally, geothermal energy can be an emission-free and cost-effective option to produce electricity without adding to the ever-growing threats caused by climate change. There are ~80 countries developing geothermal resources that fall adjacent to the Pacific Ring of Fire or East African Rift. This market could reach ~$9 billion dollar by 2019.

Click below to read the week’s leading stories for the geothermal industry.

*Geothermal Energy in 2014: Emerging Economies Power Up
*Senate Passes Tax Extenders, Geothermal PTC thru 2014
*Hatch Outlines Seven Principles for Comprehensive Tax Reform
*GEA Supports UN Efforts toward Geothermal Classification Codes
*AltaRock Energy: Geothermal Partnership with ON Energy to Advance Clean Power
*Atlas Copco: Take a Video Tour of Turkey Geothermal Plant with ORC 
*U.S. Geothermal: Acquisition of Earth Power Resources Complete
*Get More out of Your GEA Membership and the Geothermal Industry
*GEA Calls for Information for 2015 International and U.S. Geothermal Power Production & Development Report
*Murkowski and Cantwell to Lead Senate Energy and Natural Resources Committee
*Hatch Welcomes New Members to the Senate Finance Committee
*Commerce Reestablishes Advisory Committee for Renewable and Efficiency Exports
*DOE and Commerce to Lead Trade Mission to China
*Geothermal Competition Inspires Students
*CSU Seeks MS Students for Geothermal Research Opportunities

Geothermal Energy in 2014: Emerging Economies Power Up
Press Release (Washington, D.C.) December 16—Geothermal power in 2014 witnessed continued growth, more countries developing projects, and an increase in on-line capacity of between 4% and 5% for the third year in a row. With ~600 MW (megawatts) of new additions, the global market reached upwards of 12.7 GW (gigawatts) of geothermal power operational throughout 24 countries. By comparison the global industry added ~500 MW in 2013. As of the end of 2014 there are also 11.7 GW of capacity additions in development and 1.8 GW of power under construction in 80 countries. These trends show that geothermal’s place in the global energy market is secure and steady.

To maintain this growth, national-level governments sought policies that will support in-house electricity generation without adding to the threat of global warming. Meanwhile, multi-lateral organizations focused on early risk mitigation. The global geo power industry is on track to reach 20 GW of on-line capacity, if not more, by 2024.

International Market Developments: U.S. companies are taking their experience and technology overseas and inspiring other nations to create favorable conditions for trade. Emerging economies in East Africa, Central America, and the South Pacific experienced the fastest growth this year.  Some highlights:

  • Central America: Costa Rica received a $550 million loan from Japan for geothermal projects totaling 165 MW, and El Salvador reached a new milestone, with 25% of its electricity coming from geothermal.
  • East Africa: The world’s largest flash plant is a new 280-MW addition at the Olkaria field in Kenya. Meanwhile Ethiopia and the World Bank plan to add four million people to the grid in the next five years.
  • South Pacific: Construction began in Indonesia on what will be the largest geothermal plant ever built, the 330-MW Sarulla project. The Philippines’ Energy department announced plans to increase geothermal to 3.3 GW by 2030.

Internationally, the value of geothermal is recognized and supported by several new laws and policies.

  • Indonesia: Geothermal development was separated from mining laws and got a higher price for electricity produced.
  • Mexico: The local energy market opened up to private and foreign participation. The new law included specific guidelines for geothermal.

U.S. Market in Planning Mode: No new power plants were put online in the U.S. this year, in part due to lapsed federal production tax credits for new projects as well as lowered demand across the market. But future development was a hot topic in western states.

  • California: AB 2363 directed the Public Utilities Commission to improve its renewable power valuation process, a bright spot for geothermal’s future prospects. The state legislature also came close to supporting the Salton Sea Restoration and Renewable Energy Initiative and is expected to take up legislation for the Initiative again in the new year.
  • Nevada announced new projects underway.
  • New Mexico introduced its first geothermal power plant.
  • Oregon: spearheaded new initiatives that recognize the value of geothermal power. The industry is optimistic that policies like Oregon’s will spread to other states and spark another period of growth in the U.S.

Geothermal Technology Evolving: Geothermal scientists made notable advancements in mineral recovery, hybrid power systems and Enhanced Geothermal System (EGS).

  • Mineral recovery: Simbol Materials’ project in southern California could become the first to produce lithium and other minerals from geothermal brine.
  • Hybrid power systems: Enel Green Power opened the first solar thermal hybrid plant and began construction on the first biomass thermal hybrid.
  • EGS: The U.S. Department of Energy supported ongoing research and introduced its Frontier Observatory for Research in Geothermal Energy program for a subsurface laboratory.

Outlook for 2015: Looking ahead to 2015, the energy market sees continued pressure to address climate change, and there’s a growing recognition of geothermal’s unique grid reliability benefits. Geothermal companies expect to continue their work domestically and internationally to answer the needs of the marketplace for clean, reliable power with improved performance, flexibility and availability.

Events in 2015: GEA’s series of events in 2014 brought together geothermal industry and policy leaders from around the world for educational benefit and to serve as the front line for doing business. Attendance and global representation at GEA events were both at a high in 2014. GEA Events in 2015 will include:

  • February 24, 2015, State of the Geothermal Industry Briefing, Washington, DC
  • June 3-4, 2015, National Geothermal Summit, Reno, NV
  • September 20-23, 2015, GEA Geothermal Energy Expo and GRC Annual Meeting, Reno, NV

For more information, go to www.geo-energy.org.

Senate Passes Tax Extenders, Geothermal PTC thru 2014
The Tax Increase Prevention Act of 2014, H.R. 5771, passed the House of Representatives late last week and went on to the Senate. On Monday, Senate Majority Leader Harry Reid, D-Nev., made a formal motion to proceed on the package, and on Tuesday evening it passed by a 76-16 vote. Senator Wyden, Chair of the Senate Tax Committee, was among those voting no. The President has indicated he will sign it into law. The Tax Increase Prevention Act of 2014, H.R. 5771, extends a series of expired tax credits through the end of 2014–just two weeks away–including the Production Tax Credit for geothermal energy.

In a statement, Wyden laments that it was not the Finance Committee’s bipartisan EXPIRE Act that was included. The bipartisan EXPIRE legislation Wyden produced along with former Senator Judd Gregg would have extending the credits for a longer period, providing two years of certainty, and also included the possibility of making several tax policies permanent.

Wyden says, “I want tax reform to provide a middle class tax cut. I want it to drive innovation and launch a new wave of job creation. I want it to put in place a simpler, more competitive corporate tax system that draws investment and jobs to the United States. And I want it to end the cycle of stop-and-go policy that leaves taxpayers in the dark time and time again . . . It’s time for Congress to do the hard work of tax reform.”

Hatch Outlines Seven Principles for Comprehensive Tax Reform
Press Release (WASHINGTON)-–In a speech on the Senate floor today, Finance Committee Ranking Member Orrin Hatch (R-Utah) outlined seven principles needed to guide comprehensive tax reform forward, saying such reform should embrace economic growth, fairness, simplicity, permanence, competitiveness, promoting savings and investments, and revenue neutrality.

“In the coming weeks and months, I plan to reveal additional steps. I plan to involve many of my colleagues on both sides of the aisle, particularly those who will be joining me on the Senate Finance Committee. My hope is that, as this conversation continues, a path toward real bipartisan tax reform will begin to take shape. Of course, it’ll take more than just a talk and discussion. It’ll take hard work, commitment, and, of course, compromise,” said Hatch.

Earlier this month the Senate Finance Committee issued a minority staff report, titled “Comprehensive Tax Reform for 2015 and Beyond,” outlining these seven principles and raising issues policymakers will have to confront in the effort to reform our nation’s tax code.

GEA Supports UN Efforts toward Geothermal Classification Codes
Ben Matek, GEA staff–This week GEA sent a letter to the United Nations reaffirming its support on the U.N.’s efforts to adapt United Nations Framework Classification (UNFC), traditionally used in the fossil fuel and mining sectors, to geothermal technologies. The purpose of bridging the UNFC Code for geothermal technologies is to: (1) create a common global language for energy and mineral resource estimates by defining “proved reserves” and “resources,” (2) help to bridge the language or terminology gap between mining, oil & gas, and renewable energy industries and (3) address the need to compare renewable energy resources with non-renewable resources as the demand for renewables grows. This effort is being undertaken by the United Nations Economic Commission of Europe (UNECE).

In its letter GEA agreed with UNECE that the UNFC will create a common global language for energy and mineral resource estimates; and a system that enables renewable energy resources to be compared with one another and with non-renewable resources.

However, GEA also advised the UNECE that it does not support the adoption of a heat-in-place based code as a basis for the UNFC geothermal adaption. GEA wrote “The U.S. geothermal community has a serious concern about [a heat-in-place code]: any code that uses the heat-in-place method alone as a basis for estimating resource capacity has the potential to mislead investors, since this method typically over-estimates the geothermal production potential.”

For more information on UNFC code please visit the UN Economic Commission for Europe’s website and UNFC code page found at www.unece.org.

AltaRock Energy: Geothermal Partnership with ON Energy to Advance Clean Power
Press Release (SEATTLE) December 16–AltaRock Energy and ON Energy announced today a partnership to further the commercialization of enhanced geothermal energy as a new source of electric power. The companies have entered into a partnership that will provide advanced tools for geothermal developers, through a joint venture.

According to the agreement, AltaRock’s Stimulation Services LLC business unit will contribute stimulation technology and ON Energy, the exclusive U.S. drilling services partner of Hanjin D&B will provide deep drilling services. By combining technical resources, the companies aim to take a leadership position in the commercialization of products for deep geothermal reservoirs.

“ON Energy has demonstrated excellence in bringing down the cost of hard rock drilling and we see this as the critical next step in deploying geothermal power at a scale that can displace coal,” said Aaron Mandell, Chief Executive Officer at AltaRock Energy.

This agreement is established on the heels of a successful demonstration in the city of Gwangju, South Korea. Utilizing a novel “water hammer” drilling machine, Hanjin D&B, the Korean manufacturing partner for ON Energy, achieved a depth of over 12,000 feet, at up to ten times the drilling speed of conventional drilling and as much as 50% lower cost. The water hammer is tailored for hard rock and can handle a wide variety of geologic conditions.

“We are proud to partner with AltaRock. Using the water hammer technology we will be able to introduce and deliver a first of a kind drilling technology for the U.S. geothermal industry that can significantly reduce cost,” said Daniel Lee, Chief Executive Officer at ON Energy.

“By integrating geothermal stimulations and deep drilling into a single offering we will be able to provide a new cost structure for geothermal development. Our goal is to reduce the overall risk of exploration by reducing the cost of constructing a reservoir,” said Aaron Mandell.

Cost reductions in the geothermal industry will be realized by reducing both the cost of drilling, as well as increasing the success rate. When used in conjunction with deep drilling, stimulations improve the natural rock permeability and increase the productivity of injection and production wells. AltaRock and ON Energy have planned to collaborate on an integrated demonstration in 2015 at the Newberry Volcano EGS project in Deschutes County, Oregon.

Atlas Copco: Take a Video Tour of Turkey Geothermal Plant with ORC 
video from GEA member Atlas Copco describes how Organic Rankine Cycle (ORC) systems work in geothermal power plants. The company explains: “Our radial in-flow turbines, or turboexpanders, form the basis of ORC solutions. Employing highly efficient integral gear technology and Variable Inlet Guide Vanes, the turboexpanders deliver continuous, reliable power production. We provide customer-specific, clean energy solutions around the globe. One of our flagship projects (as shown in this video) is a geothermal power plant in Pamukören, Turkey, which has an electrical capacity of 45 MW and can meet the energy needs of at least 40,000 people.”

U.S. Geothermal: Acquisition of Earth Power Resources Complete
Press Release, December 16–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 successfully completed the previously announced acquisition of Earth Power Resources (“EPR”) on December 12, 2014. Under the terms of the Agreement, EPR was merged with and into U.S. Geothermal. A total of six hundred ninety-two thousand seven hundred sixty-nine (692,769) shares of U.S. Geothermal stock were issued in exchange for all outstanding shares of EPR stock. In addition to the shares issued, $42,934 in cash was also provided at close to allow EPR to pay outstanding obligations. The transaction was unanimously approved by EPR Shareholders.

The assets acquired from EPR include geothermal leases covering 26,017 acres in Nevada, representing three projects that have an energy potential estimated in the range of 158 to 359 megawatts. Also included is EPR’s complete geothermal resource database of new project opportunities located throughout the western United States, which EPR had compiled over its nearly 40 years of geothermal exploration experience.
Under the terms of the agreement, fifty percent (50%) of the new stock issued for the acquisition will be held in reserve by the Company for 6 months to cover any potential undisclosed claims against EPR. The non-reserved 50% of new stock will be delivered to the EPR shareholders upon surrender of their EPR share certificates, but trading of the new USG shares is restricted under SEC Rule 144 for a period of 6 months.

“We are very pleased to have added the Earth Power project portfolio to our development pipeline and look forward to advancing the development of these excellent opportunities,” said Dennis Gilles, Chief Executive Officer of U.S. Geothermal Inc. “We are also pleased to continue our growth through a combination of the development of internal projects and growth through strategic acquisition – this acquisition continues the execution of that plan.” Additional details regarding the acquisition can be found in the October 16, 2014 press release initially announcing the acquisition, under the tab ‘NEWS’ at the Web site:http://www.usgeothermal.com/News.aspx

Get More out of Your GEA Membership and the Geothermal Industry
Juliana Glenn, GEA staff–Your GEA membership has many benefits including access to networking events, listing in GEA’s online database, and email alerts about industry opportunities. In addition to these benefits, there are opportunities to become more involved and get the most out of your membership.

GEA has five committees that are open to members and are a great way to be actively involved in the work of the organization. The committees are: Government Affairs, Western Issues, International Market Development, Public Relations, and Science & Technology. These committees meet on a monthly basis via teleconference and work to further GEA’s efforts to expand the geothermal industry. You can read more about these committees on our Web site: http://geo-energy.org/GEA_Committees.aspx.

Additionally, GEA has an international email list for those interested in the international geothermal market. Through this list we send out alerts on current topics, issues, and opportunities relating to the international geothermal industry.

If you are interested in joining a committee, being added to our international email list, and becoming a member, please email Juliana@geo-energy.org. You can read more about GEA membership here: http://geo-energy.org/membership.aspx.

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GEA Calls for Information for 2015 International and U.S. Geothermal Power Production & Development Report
GEA is gathering information for its 2015 International and U.S. Geothermal Power Production & Development Report. If you are a new company or organization involved in developing geothermal projects in the U.S., and you would like to submit information on that project for inclusion in the 2015 report, please contact Benjamin Matek at ben@geo-energy.org or at (202) 454 5291 no later than January 15, 2015.  We would like to release the report by February 26, 2013. You can also contact Benjamin Matek with questions on this or past reports. A copy of the 2014 industry report can be accessed through GEA’s Web site at http://geo-energy.org/reports.aspx.

Murkowski and Cantwell to Lead Senate Energy and Natural Resources Committee
The Senate Energy and Natural Resources Committee has announced changes in its ranks that have resulted from November’s election. On the Democrat side, incoming ranking member Maria Cantwell of Washington replaces Mary Landrieu of Louisiana and is expected to be friendlier to renewable energy than her predecessor. Massachusetts Democrat Elizabeth Warren will also be joining the committee. Moderates Tim Johnson, Mark Udall, Tammy Baldwin and Brian Schatz are leaving and will be replaced by Hawaii’s Mazie Hirono and independent Angus King of Maine.

On the GOP side, Sen. Lisa Murkowski (R-Alaska) will be Committee Chair. Freshmen Bill Cassidy of Louisiana, Cory Gardner of Colorado, Steve Daines of Montana, and Shelley Moore Capito of West Virginia are joining the panel.

Hatch Welcomes New Members to the Senate Finance Committee
Press Release (WASHINGTON)-–Finance Committee Ranking Member Orrin Hatch (R-Utah) today welcomed Senators Dan Coats (R-IN), Dean Heller (R-NV) and Tim Scott (R-SC) to serve on the Senate Finance Committee in the 114th Congress.

“The Finance Committee has long been at the center of every major economic debate. Whether it’s providing responsible tax relief to American families and job creators, increasing market access to domestic goods and products, or strengthening the nation’s entitlement programs to guarantee their solvency for future generations, our Committee has worked to develop smart policies to improve the prosperity of our great nation,” said Hatch. “With the addition of these three Senators, the Republican side of this committee will only be stronger, and I am confident we’ll be able to work with our counterparts on the other side of the aisle to help drive a robust agenda to meet the demands of the American people.”

The Finance Committee has the largest jurisdiction of any congressional committee overseeing over 50 percent of the nation’s budget, including America’s entitlement programs, Medicare, Medicaid and Social Security, all tax policy, international trade, several welfare programs and the nation’s debt.

Commerce Reestablishes Advisory Committee for Renewable and Efficiency Exports
The U.S. Department of Commerce has reestablished the Renewable Energy and Energy Efficiency Advisory Committee (RE&EEAC) for 2014-2015. Karl Gawell, Executive Director of the Geothermal Energy Association is once again serving on the committee along with other representatives of renewables and efficiency technologies, services, and platforms for electricity generation, transmission, and distribution. Contact Gawell at karl@geo-energy.org to learn more about the focus on federal agency support for increasing the competitiveness of these U.S. exports. To view the committee’s revised charter, the full List of Committee Members (2014-2015), and archives from active committees in past years, go to http://www.export.gov/reee.

DOE and Commerce to Lead Trade Mission to China
The Departments of Energy and Commerce are co-leading a trade mission to China in April 2015 and one of the topics up for discussion will be geothermal power, a key stakeholder sector for the two countries’ respective post-2020 climate targets. U.S. Secretary of Energy Ernest Moniz and U.S. Secretary of Commerce Penny Pritzker have invited companies that are interested in participating to apply by Friday, January 23, 2015. Visit the mission Web site: http://www.export.gov/ChinaMission2015. Contacts: DOE, Maria DiGiulian, (202) 586-7551, Maria.DiGiulian@hq.doe.gov; and Commerce, Office of Business Liaison,202-482-1360, BusinessLiaison@doc.gov.

Geothermal Competition Inspires Students
An article on renewablenergyworld.com spotlights the student competitors from the 2014 National Geothermal Student Competition. The first-place winner Phil Ulibarri, a student at Truckee Meadows Community College, is quoted: “Geothermal is a very important industry right now, especially here in Nevada,” said. “I think it’s a new area where I can make a difference, and one that I also find very interesting. That’s part of why I entered the competition, plus with my experience in communications, I thought it would be a unique challenge.” The competition was started in 2010 by the U.S. Department of Energy’s Geothermal Technologies Office.

CSU Seeks MS Students for Geothermal Research Opportunities
California State University in Long Beach is looking for two Geology majors to work directly on geothermal research and development. According to a job posting, “Two M.S. research assistantships (with tuition) are available for theoretical and field based studies in geothermal reservoir permeability. Assistantships are for two years and support progress toward the M.S. Degree in Geology with the California State University Long Beach Department of Geology. Please contact Prof. Matthew Becker (matt.becker@csulb.edu) with unofficial transcripts and GRE scores and see our website (http://www.csulb.edu/depts/geology/hydrogeology/) for more information.”

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