Leading news: Geothermal Can Help Hold the Clean Power Grid Together

This post brings you news from Capitol Hill including this week’s renewables forum and possible action on energy bills and tax extenders; geothermal can help meet climate preparedness goals; GEA member Enel Green Power signs a PPA for the first geothermal power plant in Chile; and KenGen is seeking expressions of interest on the Olkaria VI project.

IMG_20140930_104931_expodip_logoAbove: The GEA Geothermal Energy Expo is the world’s largest annual geothermal expo. This year’s event is just two months away, September 20-23, 2015 at the Peppermill Resort & Casino in Reno, Nevada. Come find out what other geothermal professionals from around the world are doing, view technology and chat with vendors. Our vendors provide support for geothermal resource exploration, characterization, development, production and management. Interested in getting into the geothermal industry? Come find the opportunities. http://geo-energy.org/new_expo/

Click below to read this week’s leading geothermal news.

*While Congress Holds Renewables Forum, Rumors Mount of Possible Action on Energy Bills and Tax Extenders
*Geothermal Energy Can Help Hold the Clean Power Grid Together, GEA Director Tells Congressional Forum
*OMB Asks Agencies for Climate Preparedness Objectives in Budget Plans for First Time
*Enel Green Power and Endesa Chile Sign Geothermal PPA
*KenGen Seeks EOI to Consultant on the Olkaria VI Geothermal Power Plant (due July 20)

While Congress Holds Renewable Forum, Rumors Mount of Possible Action on Energy Bills and Tax Extenders

Department of Energy official Doug Hollet spoke at the event. Hollet has worked extensively with the geothermal industry.
Department of Energy official Doug Hollett spoke at the Renewable Energy and Energy Efficiency EXPO and Policy Forum. Hollett has worked extensively with the geothermal industry.

The House and Senate Renewable Energy and Energy Efficiency Caucuses held their annual EXPO on July 9th, with over 600 visitors participating to learn more about clean energy technologies, including geothermal energy. GEA participated as an exhibitor with staffers Leslie Blodgett and Ben Matek answering questions about current industry developments, policy, geothermal investment, heat pumps and more from the throng of visitors. GEA’s Executive Director spoke at the companion Policy Forum coordinated by the Environmental and Energy Study Institute (see next story).

Meanwhile, rumors swelled about possible action in the House and Senate on energy legislation. House Energy and Commerce Committee and the Senate Energy Committee were reported to be looking to mark-up energy legislation in the coming weeks. Meanwhile, there were signals that the Senate Finance Committee might consider tax extenders legislation that could affect the lapsed PTC for geothermal energy and other renewable technologies. Senator Chuck Grassley (R-IA) was reported as saying he was working to ensure that an extension of the PTC would be acted upon. GEA will keep you informed of developments in the coming weeks.

GEA staff answer questions about geothermal energy at the Renewable Energy and Energy Efficiency EXPO and Policy Forum.
GEA staff discuss geothermal energy at the Renewable Energy and Energy Efficiency EXPO and Policy Forum.

Geothermal Energy Can Help Hold the Clean Power Grid Together, GEA Director Tells Congressional Forum
Press Release (Washington, DC) – At the July 9 Renewable Energy and Energy Efficiency EXPO and Policy Forum, Geothermal Energy Association (GEA) Executive Director Karl Gawell contrasted the slow U.S. market to the growing world market and called on U.S. lawmakers to take bipartisan action.  “In the world market, policymakers are working to address the upfront risk of geothermal projects and shortening lead times. Congress needs to take action on pending legislation to make similar progress in the U.S.,” Gawell said.

He added that geothermal projects are subject to extensive bureaucratic delays. “Geothermal development projects can go through as many as six NEPA analyses,” explained Gawell. As a result, geothermal projects cannot effectively take advantage of short-term tax incentives. “We need longer term incentives,” he explained.

Gawell noted a number of measures pending in the House and Senate that seek to support further geothermal energy development — S.562, S.822, S.1057, S.1155 and S. 1407, in the Senate, for example. “We urge the sponsors of the individual pieces — Senators Heller, Wyden, Tester, Risch, Crapo, Merkley, Murkowski and others (as well as Representatives Simpson, DeFazio and Gosar) – to work together on a bipartisan basis if an energy bill moves forward.” In general, the different geothermal-related measures are complementary and would reduce unnecessary bureaucracy, shorten lead times and address the high exploration risk of geothermal projects, he explained.

If these disparities are resolved, “geothermal power can be the glue that will help hold the clean power grid together,” Gawell explained. Geothermal energy offers:

  • Flexibility. Geothermal power is the only renewable resource that can provide both baseload and ancillary services such as load following, ramping and spinning reserve.
  • Reliability. Geothermal electricity production does not depend on the climate or weather and is reliably available.
  • A Small Footprint.  Geothermal power has a much smaller development footprint compared to other energy sources.  While there is always some degree of competition for land use, with geothermal there is greater balance between developing public lands and protecting their beauty and undisturbed habitats for future generations. At many sites around the world, geothermal plants are actually designed to camouflage into scenery and landscapes.
  • On-Site Job Creation. Geothermal power helps create and maintain high-paying jobs in both the clean energy and the oil and gas sectors. The average 50-MW facility will create permanent employment for about 100 people. Geothermal power facilities employ both clean energy and drilling engineers, blue collar welders, plumbers, electricians and technicians as well as white collar lawyers, executives and management.
  • Solid State and Local Tax Base.  In 2013, geothermal power producers paid $29 million dollars in annual property taxes. The typical 20-MW geothermal facility will pay between $6 million and $11 million dollars of property taxes over the 30-year life of its power sales contract.
  • Rents and Royalties.  Geothermal energy facilities paid about $26 million in Rents and Royalties to state, federal and local governments nationwide in 2014 of which a quarter (about $19.5 million) is returned to benefit state and local county governments.
  • Expanding the geothermal fleet to 15 GW would generate between $5 billion and $8.25 billion dollars in property taxes and close to $111 million annually in rents and royalties for state and local communities.

Today, utility-scale geothermal power facilities are producing clean baseload electricity in seven states and nearly 30 different countries. U.S geothermal power plants provide roughly 3,500 MW of baseload electrical capacity and worldwide there are roughly 13,000 MW of geothermal capacity operating. In many places – Costa Rica, the Philippines, Kenya, Turkey, California – geothermal power has become a major contributor to power system needs.

The potential for geothermal energy production is huge and largely untapped.  Just in the Western U.S., according to the U.S. Geologic Survey, there are between 3,675 MW and 16,457 MW in identified geothermal systems; between 7,917 MW and 73, 286 MW in undiscovered systems; and well over 100,000 MW in potential EGS, or Enhanced Geothermal Systems.

The GEA represents over 120 companies involved in the production and use of geothermal energy in the U.S. and around the world.  Despite the hiccups at home, GEA estimates that U.S. firms are very active in the world market and are involved in 80% of the countries developing geothermal power.

View the “Fuel Cells – Geothermal – Solar – Transportation – Waste-To-Energy – Wind” panel on Youtube: https://www.youtube.com/watch?v=Mi4DSskBxYA.

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OMB Asks Agencies for Climate Preparedness Objectives in Budget Plans for First Time
The Office of Management and Budget (OMB) is asking agencies to consider the effects of climate change on the construction and maintenance of federal facilities in budget plans for the first time. Specifically, all federal agencies are being asked to consider climate preparedness and resiliency objectives in submissions for next year. In a blog post OMB representative Ali Zaidi stated, “We are making it very clear that this is a priority in proposals for capital funding. Why? Because making our Federal facility investments climate-smart reduces our fiscal exposure to the impacts of climate change. It’s the right thing to do to run an efficient and effective government. And it’s the right thing to do to return the highest value to the American taxpayer.”

Enel Green Power and Endesa Chile Sign Geothermal PPA
Enel Press Release (Rome) July 9th – Enel Green Power S.p.A. (“Enel Green Power”), acting through its subsidiary Enel Green Power Chile Ltda (“Enel Green Power Chile”), and Empresa Nacional de Electricidad SA (“Endesa Chile”) have signed a long-term agreement for around 25 years of energy supply and sale of green certificates connected to a geothermal project and a photovoltaic project in Chile, as well as for around 20 years of energy supply and sale of green certificates connected to a wind power project in Chile.

The contract for an estimated total value of up to 3.5 billion US dollars will enable Enel Green Power Chile to develop three plants with a total installed capacity of approximately 300 MW, which will require around 800 million US dollars of investment.

Enel Green Power currently operates a portfolio of plants in Chile that have a combined installed capacity of around 600 MW, of which 340 MW from wind power, 154 MW from solar and 92 MW from hydro. Approximately 300 MW from the PPA with Endesa Chile and around 300 MW from other projects currently in execution will bring the company’s total installed capacity in Chile to about 1,200 MW.

For Enel Green Power this contract represents a related-party transaction, carried out through one of the Company’s subsidiaries, in accordance with the Procedure governing transactions with related parties adopted by Enel Green Power as established by applicable CONSOB (Italian Stock Exchange authority) regulations. Endesa Chile is a related party of Enel Green Power as they are both subject to the control of Enel S.p.A. In this respect, in light of the agreed terms and conditions, this contract is exempt from the above procedure since it is an ordinary transaction of major importance with terms and conditions equivalent to market or standard conditions.

Enel Green Power is the Enel Group company fully dedicated to the international development and management of renewable energy sources, with operations in Europe, the Americas and Africa. With a generation capacity equal to approximately 32 billion kWh in 2014 from water, sun, wind and the Earth’s heat – enough to meet the energy needs of more than 11 million households – Enel Green Power is a world leader in the sector thanks to its well-balanced generation mix that provides generation volumes well over the sector average. As of today, the company has an installed capacity of more than 9,800 MW from a mix of sources including wind, solar, hydropower, geothermal and biomass. The company has about 740 plants operating in 15 countries.

KenGen Seeks EOI to Consultant on the Olkaria VI Geothermal Power Plant (due July 20)
KenGen is seeking consultants for the Design, Finance, Supply, Construction, Commissioning & Maintenance of the 140-MW Olkaria VI geothermal power plant through Public Private Partnership (PPP). World Bank is providing financing. Parties are asked to express their interest by 20 July 2015.

Via TendersUnlimited, “The objective of the Transaction Advisor (TA) assignment is to assist KenGen with the competitive procurement of a Project Sponsor/Developer for the design, finance, supply, construction, commissioning, operation and maintenance of the 140-MW Olkaria VI Geothermal Power Plant through a PPP arrangement. The TA will prepare a feasibility study consistent with the PPP Act, recommend the best PPP model for the procurement, advise KenGen on the optimum risk allocation and the resultant contract structure, develop transaction documents for the procurement and provide transaction advisory support through to financial close of the project.”

Phase I tasks will include: Project Feasibility Assessment; Technical and Commercial Options Analysis, Project Due Diligence: Economic and Social Cost Benefit Analysis (ECSBA), Financial Viability Assessment, Legal Due Diligence. Site Due Diligence, Environmental and Disaster Risk Assessment, Procurement Options and PPP Structure Analysis: Options Development, Evaluation and Selection, Risk allocation framework and Heads of Toms lor Project Contracts, Financial Modeling and Market Sounding, Summary Recommendations, Project Implementation Plan and Feasibility Study Report; Support to KenGen on Securing PPP Committee Approval and Al Other Government Approvals.

Expressions of Interest documents should be sealed in plain envelopes with consultancy reference and name clearly marked on top should be delivered in person, sent by mail or by email to the address shown below or placed in the tender box at our offices on the 7* floor, Anniversary Towers, North Tower.

Postal Address: Project Implementation Unit, Attention: Procurement Specialist, PO Box 21190-00100, Nairobi, Kenya. Telephone No:+254-20-2210271/4. Physical Address: Project Implementation Unit, Attention: Procurement Specialist, 7th Floor, Anniversary Towers, North Tower; Building No.19 Monrovia Street/University Way, Nairobi, Kenya. E-mail: procurement.ifDDD@piu.oo ke, Info.ifppp@piu.go.ke, info@pppunit.go.ke. Deadline for submission of Expression of Interest is Monday 20th July 2015 at 1600hrs Kenyan local time. View more at http://www.tendersunlimited.com/i/4a94e55045f362_5520f3621.

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