This post brings you updates from GEA and its member companies; the U.S. Clean Power Plan and its effects on geothermal growth; the U.S. meeting with Indonesia regarding geothermal development; and geothermal initiatives from DOE, USGS and BLM.
The map above shows areas of eastern Oregon, northeastern California, southwestern Idaho, and northernmost Nevada that are part of a joint study between the USGS Water and Energy Mission Areas. The study will quantify groundwater resources and geothermal energy potential.
Click below to read this week’s leading geothermal news.
*GEA to Hold Annual Members Meeting and Board Elections
*Updates on Clean Power Plan and Its Effects on Geothermal Growth
*The United States Engages with Indonesia to Advance Cooperation on Geothermal Energy
*Ormat Technologies Reports 2015 Second Quarter Results
*U.S. Geothermal Inc. Advances Two Significant Development Projects
*Nevada Gets DOE-Funded Lithium Extraction Project
*USGS Studies Groundwater and Geothermal in Northwest
*BLM Seeks Comments on Utah Geothermal Proposal (due Aug. 25)
*First Geothermal Power Plant in Malaysia Signs PPA, Seeks Partners
The meeting will be held in conjunction with the GRC Annual Meting & GEA Geothermal Energy Expo, September 20-23 at the Peppermill Resort Spa Casino. Registration is now open. To register for the Geothermal Energy Expo only (General Attendees: $350 for three days; other discounts apply), go to http://geo-energy.org/new_expo/. To register for Geothermal Resources Council Annual Meeting-Technical Sessions (includes entry to the Expo; General Attendees: $895 for three days using early registration; other discounts apply), go towww.geothermal.org.
Updates on Clean Power Plan and Its Effects on Geothermal Growth
Benjamin Matek, GEA staff — A lot has changed in the details of the Environmental Protection Agencies latest Clean Power Plan. This rule is a quite different proposal than was presented to the American public last year. An army of lawyers and consultants on all sides of the issue are working on their analyses of what it means. But, knowing that we’ve had only a short time to look at it, here are some preliminary notes:
To start, the way EPA set state goals is different than before. To maximize the range of choices available to states in implementing the standards and to utilities in meeting them, EPA is establishing interim and final statewide goals in three forms that will gives states more flexibility. A rate-based state goal measured in pounds per megawatt hour (lb/MWh); A mass-based state goal measured in total short tons of CO2; A mass-based state goal with a new source complement measured in total short tons of CO2.
This proposal is different than the previous rule where EPA calculated a formula including energy efficiency, new nuclear, and existing renewable energy sources to find the Best System of Emission Reduction (BSER) for the lower 48 states.
Additionally, in this new rule energy efficiency was not included as “Building Block” for BSER. However, while energy efficiency is no longer a building block EPA anticipates that, due to its low costs and large potential in every state, demand-side energy efficiency will be a significant component of state compliance plans under the CPP.
Other big changes include pushing the implementation of the plan back to 2022 but including an incentive program called the Clean Energy Investment Program for 2020 and 2021. This new deadline will give states eight years instead of six to comply with the first rate or mass based targets the plan proposes. The EPA is providing a Clean Energy Incentive Program to reward early investments in renewable energy generation and demand-side energy efficiency measures that generate carbon-free MWh or reduce end-use energy demand during 2020 and/or 2021. State participation in the program is optional.
So how does this new rule effect geothermal growth in the United States? One noticeable change is two big geothermal states are left out of this rule, Hawaii and Alaska. However, all other states are affected and this might not matter for Hawaii with its recent passing of a 100% RPS by 2045.
The remaining 46 states (Vermont and D.C. are also excluded) now need to adopt and submit a state plan by September 6th, 2016 that establishes standards of performance for the affected Electrical Generating Units in its jurisdiction in order to implement the BSER. So it depends on the plan some of the key geothermal western states decide to implement.
GEA is working together with GRC and GeoExchange to provide all of the states key information they will need to include the benefits of geothermal in their planning.
It will be important for the geothermal industry to engage states as they are developing their plan to make them aware of their geothermal resources. EPA requires the state rulemaking process must meet the minimum public participation requirements of the implementing regulations as applicable including a public hearing and meaningful engagement with all members of the public and vulnerable communities.
Also in order for a state to comply using renewable energy technologies, the generation must be “incremental” opposed to existing. Generation from renewable generating capacity that already existed prior to 2012 is not counted toward reducing future emissions.
So in short, the rule could spur growth in states that must find ways to acquire more renewable energy, either through out of state RECs or building new capacity of their own. New pieces of the rule are in the federal plan that states have to adopt if they don’t come up with their own approved plan, and EPA will be taking comments on it for the next 90 days.
For more information visit the EPA Clean Power Plan homepage at: http://www2.epa.gov/cleanpowerplan.
The United States Engages with Indonesia to Advance Cooperation on Geothermal Energy
Press Release — On August 6th, the United States and Indonesia conducted a workshop with regulatory, financial, and technical experts, as well as high-level government officials, to advance geothermal development in Indonesia. The United States and Indonesia agree to increase collaborations and explore opportunities over the coming weeks and months to accelerate private investment in geothermal energy. The workshop included discussions of international best practices for geothermal energy development and exploration of opportunities to streamline current policies, rules, and regulations, while also preserving the integrity of local concerns to protect the environment. Experts also explored world-class approaches to reduce risks associated with geothermal development, to increase the efficiency of government processes and to create the financial certainty necessary to increase overall levels of geothermal energy investment.
Developing this clean energy supply has the potential to support long-term, low emission economic growth and to help Indonesia meet its climate change target of a 26 percent reduction in greenhouse gas emissions by 2020, or 41 percent reduction with international support, compared to business-as-usual. The workshop illustrates how the United States is working with its partners to mitigate the causes of global climate change.
For updates, follow the Bureau of Energy Resources on Twitter. For more information, please contact Edward Dunn, Public Diplomacy Officer, at DunnEA2@state.gov, or +62-213435-9523, and/or Jenifer Joyce, Public Diplomacy Officer, at JoyceJ@state.gov, or +1 (202) 647-7959.
Ormat Technologies Reports 2015 Second Quarter Results
Press Release (RENO, Nevada) August 3 — Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the second quarter ended June 30, 2015.
Second Quarter Highlights and Recent Developments:
• Total revenues of $140.5 million, compared to $127.6 million in the second quarter of 2014;
• Electricity revenues of $90.9 million, compared to $91.7 million in the second quarter of 2014;
• Product segment revenues of $49.6 million, compared to $35.9 million in the second quarter of 2014;
• Operating income increased by 27.0% to $38.6 compared to $30.4 million in the second quarter of 2014 (excluding an $8.1 million write off);
• Net income attributable to the company’s shareholders of $14.4 million or $0.28 per share (diluted), compared to $9.1 million or $0.20 per share in the second quarter of 2014;
• Adjusted EBITDA of $67.8 million, compared to $61.8 million in the second quarter of 2014;
• Declared a quarterly dividend of $0.06 per share for the second quarter of 2015;
• Closed and received $162.3 million cash from Northleaf Capital Partners for a 36.75% equity investment in certain power plants;
• Closed $42 million loan agreement to refinance the Amatitlan power plant in Guatemala with Banco Industrial S.A. and its affiliate Westrust Bank. Funding is expected shortly; and
• Signed an approximate $100.0 million EPC contract in Chile;
Isaac Angel, chief executive officer of Ormat, stated, “Our balanced business model enabled Ormat to deliver another quarter of solid, double-digit revenue growth largely driven by 38.0% growth from our Product segment. We essentially matched last year’s revenue in our Electricity segment, mainly due to the McGinness Hills complex performance, overcoming lower oil and natural gas prices, as well as reduced generation at Puna due to last summer’s hurricane, which impacted our revenue in this segment. The enhancements implemented in our power plants that improved the efficiency of our operating portfolio along with the new capacity that came on line increased the margins in the Electricity segment despite the significant impact of the lower oil and natural gas prices on our revenue. Higher revenue and improvements in our consolidated gross margin drove a 27.0% increase in our operating income excluding an $8.1 million write off in the second quarter of 2014, demonstrating again the strength of our balanced business model.”
“We remain confident in the multi-year plan we outlined at our analyst day in March,” continued Mr. Angel. “We are focused on expanding our geographic reach and broadening our technology offering with a vision to position Ormat as a leading provider of renewable energy. We remain excited about the growing number of opportunities before us and believe the tailwinds expected from the potential PTC extension and other regulatory initiatives in the regions we are targeting, will complement our efforts.”
For the full release, visit http://www.ormat.com/news/latest-items/ormat-technologies-reports-2015-second-quarter-results.
U.S. Geothermal Inc. Advances Two Significant Development Projects
Press Release (BOISE, IDAHO) Aug 06 — U.S. Geothermal Inc. (GTH)(nyse mkt:HTM), a leading renewable energy company focused on the development, production, and sale of electricity from geothermal energy, is pleased to announce it is advancing two significant development projects. The Company’s wholly owned subsidiary, U.S. Geothermal Guatemala, S.A., started drilling well EC-2 at the El Ceibillo Project today. Additionally, the Company has successfully completed a flow test program on the three largest production wells at the WGP Geysers project in northern California confirming the existence of approximately 30 MW of steam. Together, both projects have the capability of adding some 80 megawatts of electricity to the company’s annual capacity
At the El Ceibillo project in Guatemala, drilling started on Well EC-2 which has a planned depth of 1,968 feet (600 meters). EC-2 will test a high temperature anomaly identified by a 2014 temperature gradient drilling program. Drilling was suspended after well EC-1 was drilled in June of 2013 until the project schedule for the concession could be modified. The Ministry of Energy and Mines approved the modified project schedule on July 21, 2015. The 8 day public comment period, which followed that approval, concluded without receiving any comments. We expect to receive the amended concession contract before the end of August.
At the WGP Geysers project, located about 1 1/2 hours north of San Francisco, in Sonoma County, the three production wells with the highest flow rates were tested. All three wells produced superheated steam with estimated flow rates at or above the rates measured when the wells were first drilled during 2008 and 2009, confirming that the wells are open and available for production. An independent, world recognized geothermal consulting firm, GeothermEx Inc., designed and monitored the flow tests, and collected test data for their analysis. The reservoir report is expected by the end of August, and will be used to guide final development of the project.
“With approximately 30 megawatts of steam drilled, tested and ready for production at Geysers, we are actively pursuing discussions in support of a power purchase agreement for this, our most advanced stage development project” said Dennis Gilles, CEO of US Geothermal. “Additionally, our geothermal concession in Guatemala holds great promise and we anticipate that the drilling results from our next few wells will allow us to confirm the geothermal resource. We expect to be able to produce from 25 to 50 megawatts of electricity when the project is completed. The government of Guatemala strongly supports renewable energy, and we look forward to continuing to work with them to make the development of this first, 100% private geothermal concession a big success.”
Nevada Gets DOE-Funded Lithium Extraction Project
Esmeralda Minerals LLC (subsidiary of Pure Energy Minerals), SRI International and the U.S. Department of Energy are collaborating to develop novel cost-effective methods for lithium extraction from geothermal brines. In a press release, the project is described, “to develop and validate a new generation of highly selective ion exchange resins to separate metals from geothermal fluids more efficiently and at lower cost than current processes. Selective high-capacity sorbents have the potential to extract metals more efficiently and lower the cost of production of lithium materials. The research will be conducted using lithium-enriched brines collected from Esmeralda Minerals LLC’s lithium brine project in Clayton Valley, Nevada.”
USGS Studies Groundwater and Geothermal in Northwest
The U.S. Geological Survey, the Oregon Water Resources Department, the Idaho Department of Water Resources and the California Department of Water Resources are conducting an assessment of the groundwater resources and geothermal energy potential within parts of the Northwest Volcanic Province. Previous geothermal research has identified high geothermal heat flow and potential for large-scale electricity production, according to USGS. “The research encompasses large areas that have been under drought conditions for several years and data acquired by the study will aid water managers in their efforts to meet the needs of water users in these areas,” said Erick Burns, USGS scientist and project chief for this study. Estimates of groundwater quantity by sub-region are expected for publication in late 2016.
BLM Seeks Comments on Utah Geothermal Proposal (due Aug. 25)
Enel Cove Fort LLC has submitted its proposal to drill up to six geothermal wells on federal lands in Millard and Beaver counties, Utah. The proposal includes testing, drilling, delivery pipelines and access roads. The Bureau of Land Management Utah Cedar City Field Office is seeking public comment on its environmental assessment, particularly new technical or scientific information relevant to the proposed action. Please reference “Cove Fort Geothermal” and submit to: BLM Cedar City Field Office, Attn: Ed Ginouves, 176 East DL Sargent Drive, Cedar City, UT 84721 or by e-mail: firstname.lastname@example.org. For more information, https://www.blm.gov/ut/enbb/index.php.
First Geothermal Power Plant in Malaysia Signs PPA, Seeks Partners
Tawau Green Energy (TGE) has provided updates on the geothermal power project in Malaysia. A PPA has been signed with the state utility and the project is approaching exploration drilling with an estimated 3 x 40 MWe gross progressive development. In an email to GEA, TGE representatives said they are open for interested partnering parties or investors for the project.
TGE further states: “Renewable Energy PPA has been signed with the state electricity utility (Sabah Electricity Sdn. Bhd.) for off-taking at MYR0.45/kWh for the first stage development of 30MWe (nett) with a commisioning date of end 2017. The project is now ready for exploration drilling and an impressive level of development infrastructure and access road has been installed to date including 2 multi well pads, a cleared and leveled power plant site, site office complex, site warehouse etc. From the surface exploration data the Tawau field looks to be a moderate temperature geothermal resource suitable for a 3 stage (3 x 40MWe gross) progressive development. It is likely that the resource will need to have pumped production and it will almost certainly need to have organic Rankine cycle plant.”