This post brings you several new bills that have been introduced that would directly affect U.S. geothermal industry development; an update on crucial California legislation; and news from the World Geothermal Congress and other updates on international geothermal industry progress.
Above: A new study led by the China National Renewable Energy Centre that uses U.S. DOE research models envisions geothermal heating supplying 3% of China’s primary energy by 2050. Read more in “U.S.-China Climate Relations Build” in this post.
Click below to read this week’s leading geothermal news from the Geothermal Energy Association, the geothermal industry trade association with offices in Washington, DC.
*GEA Members Shaping U.S. and International Industry Dialogue
*Wyden Bill Sets 10-Yr Goals for Geo Development, Authorizes Cost-Share Exploration/Drilling
*House Appropriations Recommends $46M for Geothermal, $9M below FY 2015
*America COMPETES Bill Includes Geothermal But Would Cut EERE Funding
*PTC Elimination Act Would End Subsidies by 2025
*Measures Directing Baseload Geothermal/Renewable Study and Expanding Direct Access Advance in California Legislature
*Geothermal Industry and State of California Celebrate Geothermal Awareness Month
*U.S. Geothermal Industry Joins Conference Hosted by Australia & New Zealand
*U.S.-China Climate Relations Build with New Emissions Reduction Feasibility Report
*U.S. Steps Up Clean Energy Efforts in Central America & Caribbean
*Caldwell Ranch Proves Possibilities for Reopening Abandoned Wells
*Renewable Energy Sources Provide Over 75% of New U.S. Generating Capacity During Q1 2015
GEA Members Shaping U.S. and International Industry Dialogue
Yasmin Romitti – GEA works hard to advance the geothermal industry and business for your company. As a company involved in the geothermal industry, we wanted to call two upcoming events to your attention:
First, GEA’s annual National Geothermal Summit is coming up quickly on June 3-4 in Reno, Nevada. The Summit brings together members of the U.S. industry with state and regional decisionmakers. This year’s Summit will highlight how geothermal power helps stimulate economic development and achieve environmental quality.
Then in the Fall, the GEA Geothermal Energy Expo 2015 and the Geothermal Resources Council Annual Meeting are co-located in Reno on September 20-23. The GEA’s annual Expo event is the largest annual industry exhibition in the world.
Both events offer opportunities for your company to grow its business. You can learn more about these events on GEA’s Website http://geo-energy.org/default.aspx and contact Kathy Kent, firstname.lastname@example.org.
Remember that GEA members receive a significant added discount and benefits for event registration and consider joining GEA today. As a GEA member your participation will be critical as we endeavor to expand the use of this clean, renewable, sustainable energy source and shape the industry of tomorrow.
Wyden Bill Sets 10-Yr Goals for Geo Development, Authorizes Cost-Share Exploration/Drilling
Coinciding with Earth Day on April 22, Senator Ron Wyden (D-Ore.) introduced a new geothermal bill, S. 1057 or the Geothermal Energy Opportunities (GEO) Act with bipartisan support from Senate Energy Committee Chair Senator Murkowski (R-AK). The bill sets ten-year goals for the BLM, USGS and DOE to (a) have approved 15,000 MW in new geothermal capacity, and (b) identify sites capable of producing 50,000 MW from a full range of geothermal technologies. It requires reports to Congress on progress toward these geothermal goals.
“Finding new ways to produce clean energy, create good-paying U.S. jobs and reduce carbon emissions is critical to protecting the environment and American consumers,” Wyden said in a statement. “This 45th anniversary of Earth Day puts a spotlight on the importance of protecting our environment. I’m going to keep working on ways to reduce carbon emissions and fight climate change not just on Earth Day, but every day of the year.”
“Across the globe, geothermal markets show strong growth when governments help address the high risk of exploration,” said Karl Gawell, GEA’s Executive Director. “By supporting exploration for new geothermal sites, Senator Wyden’s GEO Act would spur new geothermal development in the U.S. and help U.S. firms stay competitive in the world market.”
For the BLM, the bill specifies responsibility to identify and facilitate development of priority areas for geothermal. It allows non-competitive leasing of up to 640 acres of adjoining lands where discovery has been made, incorporating legislation Wyden introduced earlier this year – the Geothermal Production Expansion Act. It also authorizes non-competitive geothermal leases for co-production from federal oil and gas wells.
For DOE, the bill authorizes cost-share grants for industry exploration drilling and related activities. DOE programs for direct uses and geothermal heat pumps are also authorized.
The bill directs the federal share of geothermal royalties to support federal agency geothermal efforts, and authorizes such sums as are necessary to be appropriated.
A press release from Wyden’s office said that through the public-private grant program partnerships, developers will “report their findings, contributing to a nationwide map of geothermal potential that will reduce the risk and drive down the cost of geothermal energy for the future.” Wyden’s home state of Oregon alone has the potential to produce at least 1,100 MW from geothermal resources – enough energy to power about a million homes. View Wyden’s summary of the bill: http://www.wyden.senate.gov/download/?id=74FD2197-3C9A-4CFA-A49D-089C1E75CD7B&download=1.
House Appropriations Recommends $46M for Geothermal, $9M below FY 2015
The House Appropriations Committee approved its Energy and Water Development Appropriations Bill, which provides for geothermal: “Geothermal Technologies.—The Committee recommends $46,000,000 for Geothermal Technologies, $9,000,000 below fiscal year 2015 and $50,000,000 below the budget request. Within available funds, the recommendation provides $27,000,000 for Enhanced Geothermal Systems, of which $21,000,000 is for ongoing activities for the Frontier Observatory for Research in Geothermal Energy project.”
All of DOE’s energy efficiency and renewable programs were cut in the approved bill. The 2015 appropriation was $1,923,935,000, and the administration reported a budget estimate of $2,722,987,000 for FY 2016 but was recommended $1,657,774,000 in the Energy and Water Development Appropriations Bill.
America COMPETES Bill Includes Geothermal But Would Cut EERE Funding
Representative and Chairman Lamar Smith (R-Texas) and the Science, Space, and Technology Committee Democrats have introduced the America COMPETES Reauthorization Act of 2015 or H.R. 1806. The bill provides for “technological innovation through the prioritization of Federal investment in basic research, fundamental scientific discovery, and development to improve the competitiveness of the United States, and for other purposes.” It authorizes geothermal programs, however, it cuts funding to programs that support geothermal. The DOE’s Office of Energy Efficiency and Renewable Energy is cut 37% from its current level to $1.2 billion in 2016. It also cuts funding to ARPA-E.
Sciencemag.org summarizes complaints from the research community. The bill would: “Narrow the scope of research at the Nation-al Science Foundation (NSF) by designating some scientific disciplines as more important to the nation than others; Sharply reduce NSF’s authority to fund the social sciences and the geosciences; Restrict NSF’s ability to build large new scientific facilities by requiring the agency to follow new, controversial, accounting practices; Curtail climate change research at the Department of Energy (DOE); Block the government from using DOE research findings in writing regulations; and squeeze the budgets for DOE’s applied research program and its fledgling Advanced Research Projects Agency- Energy (ARPA-E).”
For geothermal, the bill specifies: “The Secretary shall conduct a program of research, development, demonstration, and commercial application for geothermal energy, including technologies for — (i) improving detection of geothermal resources; (ii) decreasing drilling costs; (iii) decreasing maintenance costs through improved materials; (iv) increasing the potential for other revenue sources, such as mineral production; and (v) increasing the understanding of reservoir life cycle and management.”
Notably, a joint statement from Chairman Smith along with Senator John Thune (R-S.D.), Chairman of the Senate Committee on Commerce, Science, and Transportation expresses their intention to work together to reauthorize agencies under the America COMPETES Act.
PTC Elimination Act Would End Subsidies by 2025
H.R. 1901, a bill introduced by Representatives Kenny Marchant (R-Texas) and Mike Pompeo (R-Kansas) would eliminate the wind Production Tax Credit (PTC) through an amendment to the Internal Revenue Code of 1986. The bill’s purpose is “to phaseout and repeal the credit for electricity produced from certain renewable resources, to reduce the corporate income tax, and for other purposes.”
The American Energy Alliance supported the “PTC Elimination Act” in an alert that explained the repeal. The bill tightens eligibility requirements for new projects, ends an inflation adjustment provision and repeals the original statute, which will end subsidies by 2025.
However, a related comment made to the public by chief executive Jeff Immelt of prominent stakeholder GE seems to counter the likelihood of the bill being passed. “There is nothing we see today that indicates that the PTC is not going to get rolled over in some capacity,” Immelt was quoted. The bill was referred to the House Committee on Ways and Means on April 21.
Measures Directing Baseload Geothermal/Renewable Study and Expanding Direct Access Advance in California Legislature
Ben Matek and Karl Gawell – The Californian Senate Utilities, Energy, and Communications Committee advanced two bills to the Appropriations Committee linked with the future of geothermal power Tuesday morning. SB 539 and SB 286 were sponsored by State Senators Ben Hueso and Robert Hertzberg, respectively. Both bills received overwhelming support with zero “No” votes but under vastly different circumstances; SB 539 passed with little discussion, while SB 286 passed Appropriations for now but with many Senators voicing problems with the current draft of the bill and suggesting several amendments they expect to see in the next revision.
SB 539 instructs the California Energy Commission to study barriers related to developing new renewable baseload power by 2017. SB 539 moved forward with little discussion and no expressions of opposition. It requires the CEC in consultation with the CPUC and the ISO to:
(a) … conduct a study to examine both of the following: (1) The barriers to developing new baseload in-state renewable electrical generation facilities, as defined in Section 25741, including geothermal electrical generating facilities, and maintaining existing contracts with baseload in-state renewable electrical generation facilities, and (2) Potential solutions to those barriers, including how to level the playing field for those baseload in-state renewable electrical generation facilities.
(b) The commission shall report the results of the study and recommendations to the Legislature by January 1, 2017.
Meanwhile S.B. 286 faced more contention when brought to the committee floor. The bill would double the limit on Direct Access (DA) service to allow a greater number of nonresidential customers investor-owned utilities receive electric service from an entity other than an IOU. This bill received divided support from those present as some utilities and utility reform groups were strongly opposed to this bill.
Arguments in support of the bill made by some were that the bill would encourage competition and reduce prices for electricity. As a result, California businesses will have the tools to make cost-effective decisions and provide flexibility to meeting the state’s renewable energy goals. In addition, the bill would provide new customers for Energy Service Providers (ESP) in geothermal whose contracts are facing expiration.
Opponents argued that ESPs rely on a short-term business model that undercuts the long-term planning needed to meet California’s ambitious energy and environmental goals as well as to finance its capital-intensive energy infrastructure. The IOUs also argued that the migration of customers to DA service saddles IOU ratepayers with millions in stranded costs, despite the existence of a CPUC process to allocate such costs.
SB 286 was passed but many senators raised concerns that they would not vote for the bill in the future unless issues are addressed concerning how this bill would treat out-of-state RECs, how this bill would interact with other climate goals and whether it would increase costs for ratepayers.
Geothermal Industry and State of California Celebrate Geothermal Awareness Month
The State California recognizes the month of May 2015 as Geothermal Awareness Month through a resolution of the State Legislature. Geothermal Awareness Month aims “to raise awareness of the significant contributions geothermal energy makes to California’s Renewable Portfolio Standard and towards meeting the state’s environmental goals to reduce greenhouse gas emissions,” according to the resolution. “The Legislature considers geothermal resources important to California’s future and recognizes the environmental and economic values of existing and future geothermal energy for the state and local communities.”
Lawmakers encouraged citizens to show their support on that day by learning more about geothermal energy in California and supporting public events planned by the geothermal industry.
Geothermal opportunities are also highlighted in the resolution. For example, developing Imperial County’s Salton Sea Known Geothermal Resource Area could substantially improve the economy of one of the most impoverished counties in the state, where the unemployment rate is over 22%. In Sonoma County, construction of two proposed projects is expected to result in an estimated $12 million in one-time sales tax revenue, $7 million in new annual property tax revenues, and millions of dollars in additional royalties.
In celebration of Geothermal Awareness Month and Earth Day 2015, GEA member Calpine Corporation is set to host a celebration on Saturday, May 2 that includes guided tours of its geothermal power plants as well as music, booths and live entertainment. The event will go from 10:00 a.m. to 3:00 p.m. and is located at the Calpine Geothermal Visitors Center, 15500 Central Park Road, Middletown.
U.S. Geothermal Industry Joins Conference Hosted by Australia & New Zealand
This week members of the U.S. geothermal industry headed to the World Geothermal Congress in Melbourne, Australia. The conference is held every five years in a different location. Members of the Geothermal Energy Association participating in the event include Ormat Technologies, Power Engineers and GeothermEx.
The U.S.-East Africa Geothermal Partnership, GEA’s sister organization under the Power Africa umbrella of the U.S. administration, was in attendance at the event and exhibiting its work in the East Africa Geothermal Rift Valley. Countries such as Iceland and Turkey took the opportunity to showcase their geothermal work (see icelandreview.com and aaenergyterminal.com).
View photos and updates from the event on Twitter by searching hashtag #WGC2015.
Australia and New Zealand were the cohosting countries of the event. New Zealand is among the top five countries in the world in terms of geothermal capacity and had a large presence at the conference, with Energy Minister Simon Bridges delivering the keynote address. Read the Hon. Bridges’s address: http://business.scoop.co.nz/2015/04/20/nzs-renewable-advantage-wcg-opening-address/. Listen to a press meeting with the Hon. Bridges and a group of New Zealand’s industry representatives: http://www.geothermalpress.com/press-meeting-nz-minister-of-energy-resources-recording/.
U.S.-China Climate Relations Build with New Emissions Reduction Feasibility Report
Using U.S. DOE research models, the China National Renewable Energy Centre along with a variety of Chinese organizations published a climate footprint reduction feasibility study this week. While geothermal power plays a very small role in China’s electricity, the study envisions geothermal heating supplying 3% of China’s primary energy by 2050.
The “China 2050 High Renewable Energy Penetration Scenario and Roadmap Study” states that it is both technologically and economically feasible for the top emitting nation to rely on renewables for more than 60% of energy needs by 2050. Wang Zhongying, director of the China National Renewable Energy Center, told press the high use of renewables in Germany and other European countries shows that China can do it too.
The study is a step in a partnership between the U.S. and China to move forward on bilateral emissions reductions agreements as the international community looks toward U.N. climate talks in Paris this December. View “China 2050 High Renewable Energy Penetration Scenario and Roadmap Study”: http://www.scribd.com/doc/262478415/China-2050-High-Renewable-Energy-Penetration-Scenario-and-Roadmap-Study.
U.S. Steps Up Clean Energy Efforts in Central America & Caribbean
U.S.-Central America-Caribbean relations this month included increased focus on renewable energy efforts. On April 9, President Obama launched a new Clean Energy Finance Facility for Central America and the Caribbean, a $20 million facility to provide early-stage funding in clean energy projects (whitehouse.gov). Speaking in Panama City, Panama the same day, U.S. Secretary of State John Kerry said: “We can encourage governments, businesses, and consumers to rely less on costly fossil fuels. That means investing more in mass transit, in renewable energy sources like solar, wind, geothermal, sustainable hydro.”
Caldwell Ranch Proves Possibilities for Reopening Abandoned Wells
Three previously abandoned wells at The Geysers have been re-studied and confirmed at 11.4 MW, according to an update from The Department of Energy, which partnered with Calpine Corporation for the Caldwell Ranch Exploration Project. “The technology demonstrates that fields can rejuvenate in the proper settings,” according to DOE’s Website. “Letting a portion of a geothermal field lie idle for three or more years, allowing the reservoir to reheat, and then reopening or redrilling previously abandoned wells, provides a successful model at The Geysers. This could potentially expand the capacity there by 9 MW. In fact, this model can be replicated where conditions are similar— where there are decreases in reservoir pressure resulting from heat stored in the rock mass.”
Renewable Energy Sources Provide Over 75% of New U.S. Generating Capacity During Q1 2015
SUN Day Campaign Press Release (Washington DC) – According to the latest “Energy Infrastructure Update” report from the Federal Energy Regulatory Commission’s (FERC) Office of Energy Projects, wind, solar, geothermal, and hydropower combined provided over 75 percent (75.43%) of the 1,229 megawatts (MW) of new U.S. electrical generating capacity placed into service during the first quarter of 2015. The balance (302 MW) was provided by natural gas.
Specifically, during the quarter, eight new “units” of wind came on line with a combined capacity of 647 MW — accounting for 52.64% of all new generating capacity for the quarter. It was followed by 30 units of solar (214 MW), one unit of geothermal steam (45 MW), and one unit of hydropower (21 MW). Five units of natural gas provided the new capacity from that sector.
FERC reported no new capacity from biomass sources for the quarter nor any from coal, oil, or nuclear power.
The numbers for the first three months of 2015 are similar to those for the same period in 2014 when renewable energy sources (i.e., biomass, geothermal, hydropower, solar, wind) provided 1,422 MW of new capacity and natural gas 159 MW while coal and nuclear provided none and oil just 1 MW. Renewable energy sources accounted for half of all new generating capacity last year.
Renewable energy sources now account for 16.92% of total installed operating generating capacity in the U.S.: water – 8.53%, wind – 5.65%, biomass – 1.38%, solar – 1.03%, and geothermal steam – 0.33%. Renewable energy capacity is now greater than that of nuclear (9.11%) and oil (3.92%) combined. Moreover, as noted, total installed operating generating capacity from solar has now reached and surpassed the one-percent threshold. *
“The trend lines for the past several years have been consistent and unmistakable,” noted Ken Bossong, Executive Director of the SUN DAY Campaign. “Each month, renewable energy sources – particularly wind and solar – increase their share of the nation’s generating capacity while those of coal, oil, and nuclear decline.”
The Federal Energy Regulatory Commission released its most recent 5-page “Energy Infrastructure Update,” with data through March 31, 2015, on April 23, 2015. See the tables titled “New Generation In-Service (New Build and Expansion)” and “Total Installed Operating Generating Capacity” at: http://www.ferc.gov/legal/staff-reports/2015/mar-infrastructure.pdf.
* Note that generating capacity is not the same as actual generation. Generation per MW of capacity (i.e., capacity factor) for renewables is often lower than that for fossil fuels and nuclear power. According to the most recent data (i.e., as of December 2014) provided by the U.S. Energy Information Administration, actual net electrical generation from renewable energy sources now totals 13.2% of total U.S. electrical production (see: http://www.eia.gov/electricity/monthly); however, this figure almost certainly understates renewables’ actual contribution significantly because EIA does not fully account for all electricity generated by distributed renewable energy sources (e.g., rooftop solar).