This post brings you news from this week’s Senate Energy Committee hearing on Energy Supply Legislation; how current legislation directly impacts the geothermal industry; two new reports from the Geothermal Energy Association; and more.
The Geothermal Energy Association (GEA) will be holding its fifth annual National Geothermal Summit on June 3-4 at the Grand Sierra Resort and Casino in Reno, NV. The National Geothermal Summit is the leading forum for western state policy discussions, bringing together the geothermal industry for a dialogue with state and federal policy makers.
Click below to read this week’s leading geothermal news.
*Senate Energy Committee Hears Testimony on Package with Geothermal Bills
*Legislation Would Enhance Reliability and Spur Oil, Gas and Renewable Jobs, Geothermal Industry Tells Senate Committee
*Senator Udall Introduces Federal Renewable Energy Standard
*House to Consider America COMPETES Reauthorization
*Geothermal Power Ready to Meet Future Power System Needs, New Report Concludes
*New GEA Snapshot of the Global Geothermal Market Released
*Ex-Im Charter Set to Expire June 30
*Bank of America Issues $600 Million in Notes to Back Renewables
*Baseload Clean Energy Partners acquires the Blue Mountain Geothermal Power Plant
*U.S. Geothermal Inc. Reports First Quarter 2015 Results, Reaffirms 2015 Guidance
*Bernie Sanders Supports Geothermal Energy
Senate Energy Committee Hears Testimony on Package with Geothermal Bills
At Tuesday’s Hearing on Energy Supply Legislation, Committee Chair Senator Lisa Murkowski (R-AK) gave a short speech on geothermal energy. The Energy and Natural Resources Committee heard testimony from representatives of the Bureau of Ocean Energy Management at the U.S. Department of the Interior; American Public Power Association; Pacific Gas and Electric Company; Natural Resources Defense Council; American Petroleum Institute and University of Alaska Fairbanks.
The Geothermal Energy Association provided written testimony for the record (see next story).
Murkowski asked specifically how to better support geothermal in Alaska. “We’ve got great prospects out in Nome; what more can we be doing to encourage this but also take this model and replicate it elsewhere?” she said, and also pointed out that policies grouping traditional geothermal as a mature technology may make these projects ineligible for certain federal assistance.
“We’ve got some projects going on with low temperature geothermal that in other parts of the country they would have said, ‘it’s not even possible to do that, don’t even start.’ But we know that in places like Chena we’ve taken low temperature geothermal and powered a little resort. We have made it possible, but can we take what we’ve done in Alaska and take that elsewhere?”
Brent Sheets, Deputy Director of Alaska Center for Energy and Power at University of Alaska Fairbanks responded that innovative ways of assessing the resource can be taken to other places. Alaska also has more remote communities than the lower 48 and is innovating microgrid models that can work with geothermal and other resources and these technologies are already being taken up in the private sector, he said.
The hearing saw notable discussion around the idea of a nationwide standard for generating renewables, with Franz Matzner, Director of the Beyond Oil Initiative, Government Affairs Program at the Natural Resources Defense Council focusing part of his testimony on the proposed Renewable Energy Standard (S.1264). He said, “Across the country, 29 states and D.C. have mandatory renewable energy targets in place, providing strong market signals to drive investments in clean energy. Seven more have non-binding goals. Between 1998 and 2013, approximately 68 percent (51 GW) of non-hydro renewable capacity additions have occurred in states with binding renewable portfolio standards.”
Major geothermal bills are included in the package:
The Geothermal Exploration Opportunity Act, S.562, was introduced by Senator Dean Heller (R-NV) earlier this year and and co-sponsored by Senator Jim Risch (R-ID). It seeks to streamline the federal exploration permitting by creating a limited categorical exclusion for geothermal exploration activities on public lands.
S. 1057,The Geothermal Energy Opportunities (GEO) Act, introduced by Senator Ron Wyden (D-OR) and co-sponsored by Senator Jon Tester (D-MT), has provisions to create public-private partnerships to improve geothermal data and reduce drilling risk, including a grant program for exploration drilling.
Legislation Would Enhance Reliability and Spur Oil, Gas and Renewable Jobs, Geothermal Industry Tells Senate Committee
Press Release, Washington, D.C. — This week the Geothermal Energy Association applauded a bi-partisan set of legislation before the Senate Energy Committee, which heard testimony on May 19. The bills “would help expand geothermal power by addressing some of the most important barriers to geothermal development in the U.S.” according to Karl Gawell, Executive Director of the Geothermal Energy Association, GEA. GEA singled out 562, S. 1057. (Note S. 822 is included as a provision of S. 1057.)
S.562, Sponsored by Senator Heller (R-NV), would provide help for new geothermal projects to shorten delays at one of the most critical and risky phases of development – exploration, GEA explained. “Given the multiple NEPA processes required for geothermal development, and the inclusion of a restriction for lands involving extraordinary circumstances, we believe this process improvement can be made without risk to the environment,” GEA said. This legislation would provide geothermal exploration the same treatment afforded oil and gas exploration under the 2005 Energy Policy Act – a limited categorical exclusion — with the additional restriction for lands or resources viewed as involving extraordinary circumstance.
S. 1057, Sponsored by Senator Wyden (D-OR) proposes several initiatives that GEA supported. It would:
• set a 50,000MW National Geothermal Goal;
• direct federal agencies to identify priority areas for development;
• allow federal oil and gas lease holders to obtain a non-competitive geothermal lease to facilitate coproduction of geothermal from their wells — today 25 billion barrels of hot water is produced annually from oil and gas wells within the United States that is wasted;
• authorize cost shared exploration of geothermal energy resources;
• re-authorize the use of geothermal lease revenues to support the expansion of our knowledge of the resource base; and
• facilitate new discoveries, by allowing the limited non-competitive leasing of adjacent lands where a new discovery has been made.
According to GEA, the Wyden bill would “help spur the discovery and development of the substantial untapped geothermal energy resources here in the U.S.”
“The clean baseload geothermal energy produced as a result of these important measures will help the nation achieve a more diverse and reliable electricity supply, even as it reduces emissions, helps state and local economies, and creates jobs in both the oil and gas, and the renewable sectors,” GEA stated.
Senator Udall Introduces Federal Renewable Energy Standard
A bill introduced in Congress would require utilities to generate 30% of their electricity from renewable sources by 2030. If passed and enacted this would be the first federal Renewable Energy Standard (RES). The effort is led by New Mexico Sen. Tom Udall and is co-sponsored by fellow New Mexico representative Sen. Martin Heinrich, Massachusetts Sen. Ed Markey, Colorado Sen. Michael Bennett, Hawaii Sen. Mazie Hirono, Oregon Sen. Jeff Merkley and Rhode Island Sen. Sheldon Whitehouse.
Several of the senators offered statements on the bill: “A national Renewable Electricity Standard will help slow utility rate increases and boost private investment in states like New Mexico—all while combatting climate change,” said Udall. “Investing in homegrown clean energy jobs just makes sense, and that’s why I’m continuing my fight for a national RES.”
“Our record droughts, burning forests, dying fish and melting ice caps all point to the urgency of taking on climate change,” added Merkley. “The only answer is burning less fossil fuel and moving toward renewable energy. Senator Udall’s bill would accelerate that transition and is a key to saving both our economy and our environment from the ravages of climate change.”
House to Consider America COMPETES Reauthorization
H.R. 1806, the America COMPETES Reauthorization Act of 2015, will be considered on the House floor this week. The bill 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.”
Geothermal Power Ready to Meet Future Power System Needs, New Report Concludes
Press Release, Washington, DC – Geothermal power plants, that now service over 3 million American households, can provide both flexible and base-load power that will be needed in the future, according to a new report published today by the Geothermal Energy Association. “While baseload power has its advantages and benefits, the future electricity grid, dominated by variable energy resource (primarily wind and solar), will have particularly important values for technologies that can be flexible,” states Ben Matek, GEA’s Industry Analyst and Research Projects Manager and author of the report.
“Geothermal energy is the few renewable energy sources to date that can provide a full range of both ancillary services and baseload power to a power system,” asserts Matek. The report, Firm and Flexible Power Services Available from Geothermal Facilities, documents previous geothermal project utilization as flexible capacity, highlighting experiences in Hawaii and California. “For most geothermal power plants, flexibility is more of an economic issue than a technical one,” the report concludes.
The report examines some of the suggestions recent studies have made to encourage flexible geothermal power through solicitations and contracts, and reviews the broad categories of ancillary services possible from geothermal plants.
“State and regional power officials have been asking what role geothermal power can play in the low-carbon power system of the future,” Karl Gawell, GEA’s Executive Director stated. “This report replies, ‘geothermal is ready’ to be part of a climate friendly power system and points out that what is needed are the right policies to facilitate its expanded role.”
This report, and the issues it raises for geothermal power’s future, will also be discussed by leading state officials, utility representatives, and geothermal industry leaders at the GEA Geothermal Summit, June 3-4, in Reno, Nevada. For more information about the Geothermal Summit go to: http://www.geo-energy.org/NationalGeothermalSummit/Main.aspx . The report, Firm and Flexible Power Services Available from Geothermal Facilities, is available to download in PDF format at http://www.geo-energy.org/.
New GEA Snapshot of the Global Geothermal Market Released
Washington, DC (May 15, 2015) – The Geothermal Energy Association today released a new publication highlighting the continued growth and development of the international market for geothermal power. The report, The International Geothermal Market At a Glance, provides a snapshot of the nearly 80 countries moving forward with over 630 geothermal power projects.
The report shows the global reach of geothermal power with an illustrative graphic depicting the countries with already installed geothermal power capacity and/or developing projects. It also provides a brief overview of the global market by region, emphasizing the number and expanse of developing projects worldwide.
Notable highlights of today’s geothermal market include a total 11.5-12.3 GW of capacity on-line as of the end of 2014 and over 630 projects under development dispersed throughout 80 countries. Marked growth is shown in Chile, Indonesia, Germany, Japan, Kenya, the Philippines and Turkey, each boasting 20-60 geothermal power projects in development. North America and the South Pacific show current market dominance at operating capacities of 4,553 MW and 4,318 MW, respectively.
The report, The International Geothermal Market At a Glance, as well as the International Developing Geothermal Power Project List are available to download in PDF format at http://www.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 outreach projects. For more information, please visit http://www.geo-energy.org.
Ex-Im Charter Set to Expire June 30
Congress is considering whether to reauthorize the charter of the Export-Import Bank of the United States (Ex-Im Bank), set to expire on June 30, 2015. An alert from the firm Hogan Lovells stated that if the bank is allowed to expire, “the bank may not take on any new obligations. But the bank may acquire new obligations up until close of business on June 30, even if those obligations mature after June 30.”
GEA signed a letter of support for reauthorization of Ex-Im Bank that was led by the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM). The letter states,
TO THE MEMBERS OF THE UNITED STATES CONGRESS:
The undersigned organizations from across the country are writing to urge your support for long-term reauthorization of the U.S. Export-Import Bank (Ex-Im) before its charter expires on June 30. Ex-Im provides loans, loan guarantees and export credit insurance to help cover financing gaps for American exporters. It helps level the playing field for U.S. companies seeking new sales in fiercely competitive global markets.
Last year, Ex-Im provided financing or guarantees for $27.5 billion in U.S. exports, thereby supporting more than 164,000 American jobs at 3,300 companies. The Bank’s support is especially important to small and medium-sized businesses, which account for nearly 90 percent of the Bank’s transactions. Tens of thousands of smaller companies that supply goods and services to large exporters also benefit from Ex-Im’s activities.
Not only does Ex-Im directly support American jobs, it operates at no cost to the U.S. taxpayer. Ex-Im charges fees for its services, follows rigorous accounting and risk-management standards, and its loans are often backed by the collateral of the goods being exported. As a result, Ex-Im’s default rate has consistently been less than two percent over the past eight decades, a default rate lower than commercial banks.
Failure to secure a long-term reauthorization of Ex-Im would amount to unilateral disarmament in the face of other governments’ far more aggressive export credit programs, which have provided their own exporters with significant financing support in recent years. The export credit agencies of our top trading partners provide nearly half a trillion dollars in official export credit financing annually to their exporters — about 18 times more export credit assistance to their exporters than Ex-Im did for U.S. exporters last year.
If Ex-Im is not reauthorized before June 30, American companies would be put at a unique disadvantage in global markets, resulting immediately in lost sales and lost jobs. U.S. businesses of all sizes would be deprived of a vital financing source at a time when boosting exports is increasingly vital to growing our nation’s economy and jobs.
We urge you to support Ex-Im’s swift reauthorization.
Bank of America Issues $600 Million in Notes to Back Renewables
Bloomberg.com via SUN Day Campaign — Charlotte, North Carolina-based Bank of America Corp., the second-largest U.S. bank, has issued $600 million in bonds to fund energy-efficiency and renewable-power projects. That’s the bank’s second offering of so-called green bonds after a $500 million issuance in 2013. The bonds are part of a pledge to commit $50 billion over 10 years for low-carbon projects through funding and banking services. Investors this year may buy as much as $80 billion in bonds that support clean energy, according to research from Bloomberg New Energy Finance. That would be the most sold since 2010, when most lenders first offered them.
Baseload Clean Energy Partners acquires the Blue Mountain Geothermal Power Plant
Press Release (Seattle, WA) May 20 — Baseload Clean Energy Partners (BCEP), a yieldco owned and operated by AltaRock Energy, is announcing the acquisition of Blue Mountain Power LLC. Located in northern Nevada, Blue Mountain Power owns the 49.5 MW Faulkner 1 geothermal power plant supplying electricity to Nevada’s public utility, NV Energy. BCEP is purchasing 100% of the equity, plus the assumption of remaining debt, for an undisclosed sum from EIG Global Energy Partners. The company is planning an improvement program to increase the plant output.
Baseload Clean Energy Partners was established for the purpose of building the leading portfolio of clean, baseload power assets by leveraging the unique advantages of next generation enhanced geothermal energy (EGS). Faulkner 1 is Nevada’s second largest geothermal plant and contributes to BCEP’s overall goal of acquiring projects that benefit substantially from improvements using more advanced technology.
“Our goal is to bring online a new set of clean, baseload power assets and the first step is demonstrating that enhanced geothermal power provides attractive financial returns compared to other forms of clean energy”, said Aaron Mandell, Chief Executive Officer of BCEP. “Many legacy geothermal projects have suffered performance declines, but improvements in how the underlying resource is managed will enable this form of energy to compete head-to-head with coal.”
Geothermal power has unique characteristics that make it attractive to electric utilities. At a time when solar energy is rapidly being ramped up and energy storage is being integrated into the power grid, geothermal fills a unique void as it compliments intermittent generation from renewables. “This segment of the market will continue to grow as clean power further displaces fossil fuels”, Mandell added. “It’s a sector that can provide growing, tax-advantaged cash flows for infrastructure-oriented investors.”
BCEP’s pipeline of clean energy projects is fed by a combination of targeted acquisitions and traditional development. Qualified projects range in scale and all meet pre-determined performance criteria, including near term distributable cash flows, a strong underlying energy resource and a short return on investment for capital improvement projects.
U.S. Geothermal Inc. Reports First Quarter 2015 Results, Reaffirms 2015 Guidance
Press Release (May 15, 2015) — U.S. Geothermal Inc. (NYSE MKT:HTM)(TSX:GTH), a leading and profitable renewable energy company focused on the development, production, and sale of electricity from geothermal energy, announced today its financial and operating results for the First 3 months ending March 31, 2015 (the “First Three Months” or “First Quarter”), reaffirmed guidance for 2015, and highlighted notable achievements for the First Three Months. This earnings release should be read in conjunction with U.S. Geothermal’s financial statements, and management’s discussion and analysis (“MD&A”), which are available on the Company’s website at http://www.usgeothermal.com and have been posted on SEDAR at http://www.sedar.com and at the U.S. Securities and Exchange Commission website at http://www.sec.gov.
Revenue for the First Three Months of 2015 was $8.47 million, compared to $8.50 million for the prior year period. Adjusted EBITDA for the First Three Months of 2015 was $5.13 million, compared to $5.26 million for the prior year period, while EBITDA was $4.72 million for the First Three Months of 2015 compared to $5.09 million for the prior year. Net Income for the First Three Months of 2015 was $1.76 million, compared to $2.55 million in the prior year period. Net Income attributable to U.S. Geothermal as adjusted for the First Three Months of 2015 was $1.17 million, or $0.01 per share, compared to $1.34 million, or $0.01 per share in the prior year period.
“We are very pleased with the high availability of our operating plants during this first quarter, with corresponding financial results fully meeting our expectations,” said Dennis Gilles, U.S. Geothermal’s Chief Executive Officer. “Starting the year with a strong quarter, in spite of the unseasonably warm weather experienced during this first quarter, positions us well for achieving the financial results provided as guidance. This continuing strong operational and financial condition supports our continued growth of the company; both from developing our internal project pipeline and through strategic acquisitions.”
U.S. Geothermal reaffirms 2015 full-year guidance for Operating Revenue estimated between $28 and $33 million, 2015 Adjusted EBITDA estimated at between $15 and $19 million, 2015 EBITDA estimated between $12 and $16 million, and provides 2015 full-year guidance for Net Income as Adjusted of between $1.9 and $5.9 million.
For the complete press release and more on the Company visit the Website: http://www.usgeothermal.com.
Bernie Sanders Supports Geothermal Energy
In a Reddit.com Q&A, presidential hopeful Bernie Sanders (D-Vermont) said geothermal energy is a cost-effective way to address the global climate crisis. He said: “I believe that climate change is perhaps the most significant planetary crisis that we face and we have got to be extremely bold in transforming our energy system away from fossil fuels and towards energy efficiency and sustainability. The fact is that investing in solar, wind, geothermal and energy efficiency is far more cost-effective than nuclear plants. Further, I do not support more nuclear power plants when we do not know how we get rid of the toxic waste from the ones that already exist.”