Leading news: Don’t Forget About Baseload Renewable Energy

This post brings you news about geothermal baseload benefits, the latest in the Salton Sea discussion, guidance from the IRS, and EIA forecast, international opportunities, and more.

This week’s geothermal energy graph: Speaking at a recent GEA event, Katherine Young, Senior Energy Analyst at National Renewable Energy Laboratory said, “Geothermal development projects can go through as many as six National Environmental Policy Act analyses.” Delays are caused by a variety of reasons, including competing priorities at agencies, lack of geothermal-specific funding, lack of training or inconsistencies at field offices, weather, fear of litigation, and more. Categorical Exclusions at certain points of project exploration are being discussed as a way to decrease the too-lengthy time frame for geothermal project development in the U.S.

Click below to read this week’s leading news.

*GEA: Don’t Forget About Baseload Renewable Energy, New Paper Urges
*GEA: California Water Board Should Consider Geothermal Values in Salton Sea Discussion
*IRS Releases New Guidance on Renewable PTC
*EIA Issues Short-Term Forecast for Electricity and Heat Generation from Renewables
*Video: GEA’s Gawell Interviewed on EarthTalk
*Mexico: CFE to Offer 3 Geothermal Tenders
*The Philippines: Bids Invited for IPP Administrator at Unified Leyte Geothermal
*Scotland: Geothermal Energy Challenge Fund Launched

GEA: Don’t Forget About Baseload Renewable Energy, New Paper Urges
Press Release (Washington, DC) March 10 – The March 2015 edition of Electricity Journal publishes a paper arguing that the value of baseload renewables, such as geothermal, needs to be better recognized.  “Misinformation about baseload renewables has distorted the discussion about the least-cost future renewable energy mix,” authors Ben Matek and Karl Gawell argue.  “There are renewable baseload power sources with generation profiles that can economically replace other retiring electricity sources megawatt for megawatt, thereby avoiding incurring additional costs from purchasing and then balancing renewable intermittent power sources with storage or new transmission,” they state in the paper.  Both authors work for the Geothermal Energy Association (GEA), an industry trade group.

The GEA analysts assert that while there is no one-size-fits-all solution, the renewable energy sector will need to reevaluate the values of baseload renewables to address today’s power challenges and the dangers of climate change.  Baseload renewables provide numerous benefits that seem to have all but disappeared from the renewable energy conversation, including lower cost, better grid security, and a more optimal use of transmission infrastructure, they assert.

Instead of just looking at short-term least-cost criteria, broader questions need to be asked when choosing between technologies, according to the paper.  “To determine the best path forward, a number of system-wide issues need to be addressed,” they write.  “First, what combination of technologies really produces lowest system-wide costs when considering emission profile and reliability? And second, what mix of electricity sources will have the lowest cost considering both replacement costs and operation and maintenance costs over a period of several decades?”

The authors conclude, “In choosing a path to a new generation mix, the values, performance characteristics and availability of baseload renewable resources should be examined. The value of diversity should be recognized and integrated into future planning, and the total cost and performance of different mixes of technologies should be examined for each power system or balancing authority, particularly as these systems call upon larger amounts of renewable generation to meet system power needs.”

The paper is free to download at Elsevier’s Electricity Journal website titled The Benefits of Baseload Renewables: A Misunderstood Energy Technology

GEA: California Water Board Should Consider Geothermal Values in Salton Sea Discussion
This week the Geothermal Energy Association provided comments to the California State Water Resources Control Board regarding geothermal energy’s potential benefits to Salton Sea restoration efforts. The Imperial Irrigation District will convene key stakeholders on March 18 regarding those efforts. The comments are signed by Karl Gawell, Executive Director of the GEA, and read:

Dear Chair and Members of the Board:

On behalf of the hundreds of businesses who make up the membership of the Geothermal Energy Association (GEA) we wish to express our interest in the Imperial Irrigation District’s petition requesting your board to convene key stakeholders and discuss Salton Sea restoration efforts. GEA is a trade association composed of U.S. companies who support the expanded use of geothermal energy and are developing geothermal Resources worldwide for electrical power generation and direct-heat uses. The Salton Sea is one of the largest geothermal resources in the world, and its future is often tied to the course of efforts to restore the environmental and economic health of the region.

By any measure, the Salton Sea has significant geothermal power potential. The Salton Sea, according to the CEC’s 2004 report, has a most likely field generation capacity of 1750 MW. (http://www.energy.ca.gov/reports/500-04-051.PDF) A more recent 2013 study by EES Consulting concluded that “The total economic and achievable resource potential near the Salton Sea is estimated at 2,000 MW for projects located on IID, federal, and privately owned land.”
The economic value of producing electricity from these resources would be substantial. In addition, we estimate that if the Salton Sea added 2,000 MW of geothermal production that would add 2,340 permanent jobs at the area’s power plants, and to build the new power plants would create 6,200 construction jobs (in person-years).

Of course, while revenues and jobs are important, they represent only some of the benefits geothermal development would have to the region. Geothermal power has one of the smallest footprints on the environment and has operational values that support an efficient and reliable power system. Geothermal power provides high value baseload power that can substitute for coal or nuclear plants megawatt for megawatt. Geothermal power uses transmission lines efficiently and has other energy security and environmental values. For example, the externality value to the state from this additional generation could add $100 million annually in public health and environmental benefits.

We hope that any dialogue about the Salton Sea will also consider the value of its geothermal resources and the benefits their utilization can mean.

IRS Releases New Guidance on Renewable PTC
This week the IRS released Notice 2015-25, 2015-13 IRB 1, which updates prior “Begun Construction Guidance” for renewable electricity production tax credits under section 45.

An alert from Wilson Sonsini Goodrich & Rosati regarding the new notice states, “In order to reflect the one-year extension of when construction must begin for purposes of the renewable electricity production tax credit under section 45, or the energy investment tax credit under section 48, Notice 2015-25 provides that all references to January 1, 2014 in the Begun Construction Guidance are replaced with January 1, 2015. Accordingly, if a taxpayer can establish that it meets either the significant physical work test or the 5 percent safe harbor found in the Begun Construction Guidance prior to January 1, 2015, the taxpayer can establish the beginning of construction.

“Similarly, Notice 2015-25 provides that the continuous construction/continuous efforts safe harbor found in the Begun Construction Guidance is updated such that if a qualifying facility is placed in service prior to January 1, 2017, the facility will be considered as having satisfied the continuous construction test or the continuous efforts test.”

EIA Issues Short-Term Forecast for Electricity and Heat Generation from Renewables
Via Sustainable Energy Coalition/SUN DAY Campaign and U.S. Energy Information Administration — EIA projects that total renewables used for electricity and heat generation will grow by 2.9% in 2015. Conventional hydropower generation increases by 6.0%, while non-hydropower renewables generation increases by 1.4%. In 2016, total renewables consumption for electric power and heat generation increases by 1.8% as a result of a 3.6% decline in hydropower and a 4.6% increase in non-hydropower renewables. Wind is the largest source of non-hydropower renewable generation, and it is projected to contribute 5.0% of total electricity generation in 2016. EIA expects continued growth in utility-scale solar power generation, which is projected to average 74 gigawatthours per day in 2016. Utility-scale solar capacity will increase by more than 60% between the end of 2014 and the end of 2016. Despite this growth, utility-scale solar power averages only 0.6% of total U.S. electricity generation in 2016.

Video: GEA’s Gawell Interviewed on EarthTalk
Karl Gawell, Executive Director of the Geothermal Energy Association, spoke with EarthTalk’s Ethan Goffman this week. He spoke about the wide range of geothermal applications, comparisons to solar and wind, trends of the energy business, the site-specific nature of geothermal applications, the costs and risks of drilling, emerging economy countries, the lack of a U.S. national climate law, and more. Watch the video: http://earthtalk.org/geothermal/.

Mexico: CFE to Offer 3 Geothermal Tenders
Mexico’s CFE (Federal Electricity Commission) will offer tenders for three geothermal projects in the states of Michoacan, Puebla and Baja California Sur, between 2015 and early 2016. In Spanish: news.radiocentro.com/entry/anuncia-cfe-concurso-para-tres-centrales-geotermicas.

The Philippines: Bids Invited for IPP Administrator at Unified Leyte Geothermal
Bidding is open for the independent power producer administrator of the bulk capacity of the Unified Leyte geothermal power plants. Power Sector Assets and Liabilities Management Corp. (PSALM) is privatizing the assets of the state-run National Power Corp. and is requesting letters of interest by March 24. Bidding procedures will be issued from March 30 to April 15, and a pre-bid conference is set for May 6. Final submission deadline is August 12, 12 noon. See http://manilastandardtoday.com/2015/03/11/psalm-opens-bidding-for-leyte-geothermal-plant-contracts/.

Scotland: Geothermal Energy Challenge Fund Launched
A £250,000 Geothermal Energy Challenge Fund has been launched in Scotland for research on geothermal energy for local communities, with awards between £10,000 and £50,000. Qualifying projects will explore Scotland’s geothermal heat potential, utilising minewater, hot sedimentary aquifers, hot dry and hot wet rocks. The deadline for applications is April 30, and more information is available at www.scottish-enterprise.com/geothermal.

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