As reported by triplepundit

Geothermal is the bastard child of renewable energy.

Constantly overlooked in articles and headlines in lieu of the much sexier solar and wind, which have become the go-to cleantech representatives, geothermal energy use could quietly double in the next six years.

It requires no fuel, can provide baseload power, and is emissions-free after initial plant construction. Yet not many people know about geothermal’s immense advantages and capabilities.

Here’s to changing that.

Without getting all Wikipedia on ya’, geothermal energy is basically using the natural heat below the earth’s crust to generate electricity–hence geo and thermal.

Though there are many ways to do that, the most common is to inject water into a pre-drilled hole. The naturally heated water is then introduced to heat transfer fluid. The hot water vaporizes the fluid, which drives a turbine, creating electricity.

That two-step process is intuitively called a binary cycle plant.

Gaining steam (pun intended) in the geothermal world is a process called enhanced geothermal systems, in which a heat transfer fluid is heated directly by being injected down hold drilled deep in dry rock.

For individual household applications, geothermal heat pumps pass air through a pipe below ground that stays a constant 50 to 60 degrees, heating in the winter and cooling in the summer, saving boatloads on utility costs in the process.

Not as exciting as getting power from giant wind turbines or panels that take in the sun’s rays, but clean, efficient, and deserved of our attention nonetheless.

And it’s much easier to get excited about geothermal power once you see the growth numbers.

Geothermal Energy Forecast

Global geothermal energy capacity will grow 89% between now and 2015, according to the most recent information available from GlobalData. Capacity will surge from 11,0007 MW at the end of 2008 to over 20,800 MW in the next six years.

Here’s the chart:

geothermal energy capacity

And in case you’re interested, here’s how the market share shakes out by region:

  • Asia-Pacific, 47.6%
  • North America, 42.3%
  • Europe, 10.0%
  • South America, <0.10%

Here in the States, forecast growth is on par with global growth on a percentage basis, with an estimated compound annual growth rate (CAGR) of 9.5% each. In the next six years, geothermal energy capacity in the U.S. will grow 89%, from 3,112 MW to 5,884 MW. That’s a world-leading sum.

Notable mentions in the geothermal growth category include Indonesia (3,200 MW by 2015), the Philippines (3,246 MW by 2015), and Mexico (1,481 MW by 2015). Iceland’s success with geothermal almost goes without saying.

As you can see, geothermal energy is no slouch, and probably deserves a bit more attention and respect, as does the investment potential of the sector.

Geothermal Energy Investment Forecast

Like most other market sectors, geothermal stocks have lost significant value over the past year. Here’s the visual:

geothermal energy stocks

That’s a two-year chart of Ormat Technologies (NSYE: ORA), U.S. Geothermal (AMEX: HTM), and Raser Technologies (NYSE: RZ), three of best pure play public geothermal companies around.

Losing 50% of your value in two years is no joke. But indicators are pointing to a rebound in the geothermal sector that will coincide with growth in geothermal capacity. It only makes sense, right?

The recently-passed stimulus did its part to ensure investing in geothermal energy remains attractive. The bill extends the production tax credit (PTC) until 2013, allowing project developers to recoup 30% of a new plant’s cost. The stimulus creates a cash grant program to support the industry as well.

It’s a win-win according to Geothermal Energy Association executive director Karl Gawell:

We estimate that the geothermal power industry has doubled its workforce in the US in the past two years, and the economic stimulus bill provides a framework of support that will continue if not accelerate growth in this industry adding tens of thousands of new jobs with even greater positive effects across the economy.

Federal incentives will lure private capital to the sector, allowing financing to go through for new projects. Banks will be more likely to lend given a 30% credit that gives stability to and reduces payback times.

Here’s Karl Gawell once again: “All of this adds up to making significant progress towards expanding our use of this largely untapped energy resource, which is good news for the environment and the economy.” A double bottom line. . . you don’t say?

What’s more, positive financials are once are once again returning to the sector.

Ormat recently reported strong fourth quarter results, beating even the high-end of estimates despite ongoing global financial recession.

This trend for Ormat, and other geothermal stocks, will only continue as western States move toward more aggressive renewable portfolio standard with targeted geothermal carve-outs. And Asian countries are also making a strong push to exploit geothermal energy, as noted earlier.

Most analysts have a price target on Ormat above $40.00, which implies a near doubling of price–in line with global and U.S. capacity growth estimates.

That should be enough to get anyone excited about geothermal.

Geothermal energy, despite its lackluster reputation, is gaining steam both as a clean energy source and investment catalyst.

Be sure to spread the word.

To learn more about Geothermal opportunities and the financial models available to make this investment affordable email george@hbsadvantage.com or call 856-857-1230

As reported in Huffington Post Green

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David Calvert / Ormat Technologies Inc.
Laying the groundwork: Ormat Technologies’ geothermal power plant in Reno, Nev., is a leader in using the renewable energy source.
Geothermal sources draw power firms in quest for renewables.
By Marla Dickerson
November 3, 2008
Reporting from Reno — Not far from the blinking casinos of this gambler’s paradise lies what could be called the Biggest Little Power Plant in the World.

Tucked into a few dusty acres across from a shopping mall, it uses steam heat from deep within the Earth’s crust to generate electricity. Known as geothermal, the energy is clean, reliable and so abundant that this facility produces more than enough electricity to power every home in Reno, population 221,000.

 

“There’s no smoke. Very little noise,” said Paul Thomsen, director of policy and business management for Ormat Technologies Inc., which owns the operation. “People don’t even know it’s here.”

Geothermal energy may be the most prolific renewable fuel source that most people have never heard of. Although the supply is virtually limitless, the massive upfront costs required to extract it have long rendered geothermal a novelty. But that’s changing fast as this old-line industry buzzes with activity after decades of stagnation.

Billionaire Warren E. Buffett has invested big. Internet giant Google Inc. is bankrolling advanced research. Entrepreneurs are paying record prices for drilling leases in places such as Nevada, where they’re prospecting for heat instead of metals.

“This is the new gold rush,” said Mark Taylor, a geothermal analyst with the consulting firm New Energy Finance in Washington. He credits high fossil fuel prices and concerns about global warming with jump-starting the U.S. industry, along with federal tax credits and state laws mandating the wider use of renewable energy.

Global investment in geothermal was around $3 billion last year, Taylor said. Although that’s a blip compared with the estimated $116 billion funneled into wind and solar, it’s still a 183% increase over investment in 2006. In a difficult year for alternative energy funding, the industry snagged $600 million through the first six months of 2008, Taylor said.

A lot of that new investment is in the United States, the world’s leader in geothermal energy. More than 80% of the country’s 3,000 geothermal megawatts lies in California. The Geysers, a network of 22 geothermal plants about 75 miles north of San Francisco in the Mayacamas Mountains, is the largest geothermal complex on the planet. Calpine Corp. owns the largest part of it.

The area around the Salton Sea in Imperial County is another hot spot. CalEnergy Generation, a subsidiary of Buffett’s Mid-American Energy Holdings, owns and operates 10 plants there. It plans three additional facilities in the next few years, CalEnergy President Steve Larsen said.

In October, the Bureau of Land Management said it planned to open more than 190 million acres of federal land in California and 11 other Western states for new geothermal development.

Nevada, the nation’s No. 2 geothermal producer, has 45 new projects underway, said Lisa Shevenell, director of the Great Basin Center for Geothermal Energy at the University of Nevada in Reno. An August lease sale of Nevada lands by the federal bureau brought in a record $28.2 million.

“I’ve been at this 25 years, and I’ve never seen anything like it,” said Shevenell, a research hydrologist. “Money is falling out of the sky.”

Geothermal has been harnessed for industry since at least the 1820s. Operators tap natural reservoirs of scalding water and steam trapped thousands of feet underground, drilling wells to bring the heat to the surface to power turbines that feed electricity generators.

Costing about 4 to 7 cents a kilowatt-hour, Taylor said, geothermal is competitive with wind power and significantly cheaper than solar. Geothermal facilities occupy a fraction of the space required by wind and solar farms. The energy is also more reliable. Plants crank electricity around the clock, irrespective of whether the sun is shining or the wind is blowing.

This so-called baseload generation is coveted by power companies, which are under pressure to boost their use of green energy. California utilities must generate 20% of their electricity from renewable sources by 2010. Nevada utilities must hit that target by 2015. Geothermal is a cornerstone of that effort, accounting for about two-thirds of the renewable portfolio of NV Energy, Nevada’s biggest utility.

“It’s a 24/7 predictable supply,” said Thomas Fair, the company’s head of renewable energy. “That means a lot to a utility.”

Greenhouse gas emissions are minimal in geothermal operations, and the size of the fuel supply defies imagination. There is 50,000 times more heat energy contained in the first six miles of the Earth’s crust than in all the planet’s oil and natural gas resources, according to the environmental organization Earth Policy Institute.

The challenge is extracting it. Geothermal energy production requires three things: heat from the Earth’s core, fractured rock to make it easy to get to and water to transport the heat to the surface.

Traditionally, developers have sought out pockets of hot water and steam hidden underground. Prime areas lie along continental plate boundaries, which is why California is such a hotbed.

Still, these reservoirs can be tricky to pinpoint. They’re also expensive to reach. A geothermal well can cost $5 million or more. The result: The U.S. currently derives less than 0.5% of its electricity from geothermal.

Some say the key to harnessing this energy source on a massive scale lies with a technology known as enhanced geothermal systems, or EGS for short. The idea is to engineer the necessary conditions by pumping water into the Earth’s crust and fracturing the hot rocks below. Heat from the Earth warms the water, whose resulting steam is channeled back to the surface, powering turbines to create electricity. The water is then pumped back underground.

Though still in its infancy, EGS has the potential to open up much of the planet to geothermal development. Tiny plants are already online in France and Germany. More than 30 EGS firms are engaged in exploration and development in Australia.

Google.org, the philanthropic arm of the Mountain View, Calif.-based search engine company, is trying to push EGS in the U.S. It recently gave $10 million to Southern Methodist University’s Geothermal Lab to update the nation’s geothermal resources map, as well as to two California companies — Potter Drilling and AltaRock Energy Inc. — that are working on EGS technologies.

Google is urging the U.S. government to spend big on geothermal R&D as part of the company’s push to encourage utility-scale renewable energy that’s cheaper than coal. About half the United States’ electricity is generated by that dirty fossil fuel. China, already the world’s largest emitter of carbon dioxide, is adding coal-fired plants at a swift rate.

EGS “is indeed the sleeping giant of renewable energy,” Dan Reicher, director for climate change and energy initiatives at Google.org, said during a recent industry conference in Reno. “It’s the killer ap.”

Some industry veterans such as Shevenell are miffed that EGS has grabbed the spotlight when there’s plenty of energy to be extracted quickly using conventional techniques. Still, she credits Google for helping pump life into a dormant sector.

“This country is in an energy crisis,” she said. “We need energy now, and this is a proven way to get it.”

Dickerson is a Times staff writer.

 

Jonathan G. Dorn

After emerging in 2006 from 15 years of hibernation, the solar thermal power industry experienced a surge in 2007, with 100 megawatts of new capacity coming online worldwide. During the 1990s, cheap fossil fuels, combined with a loss of state and federal incentives, put a damper on solar thermal power development. However, recent increases in energy prices, escalating concerns about global climate change, and fresh economic incentives are renewing interest in this technology.

Considering that the energy in sunlight reaching the earth in just 70 minutes is equivalent to annual global energy consumption, the potential for solar power is virtually unlimited. With concentrating solar thermal power (CSP) capacity expected to double every 16 months over the next five years, worldwide installed CSP capacity will reach 6,400 megawatts in 2012—14 times the current capacity. (See data.)

Unlike solar photovoltaics (PVs), which use semiconductors to convert sunlight directly into electricity, CSP plants generate electricity using heat. Much like a magnifying glass, reflectors focus sunlight onto a fluid-filled vessel. The heat absorbed by the fluid is used to generate steam that drives a turbine to produce electricity. Power generation after sunset is possible by storing excess heat in large, insulated tanks filled with molten salt. Since CSP plants require high levels of direct solar radiation to operate efficiently, deserts make ideal locations.

Two big advantages of CSP over conventional power plants are that the electricity generation is clean and carbon-free and, since the sun is the energy source, there are no fuel costs. Energy storage in the form of heat is also significantly cheaper than battery storage of electricity, providing CSP with an economical means to overcome intermittency and deliver dispatchable power.

The United States and Spain are leading the world in the development of solar thermal power, with a combined total of over 5,600 megawatts of new capacity expected to come online by 2012. Representing over 90 percent of the projected new capacity by 2012, the output from these plants would be enough to meet the electrical needs of more than 1.7 million homes.

The largest solar thermal power complex in operation today is the Solar Electricity Generating Station in the Mojave Desert in California. Coming online between 1985 and 1991, the 354-megawatt complex has been producing enough power for 100,000 homes for almost two decades. In June 2007, the 64-megawatt Nevada Solar One plant became the first multi-megawatt commercial CSP plant to come online in the United States in 16 years.

Today, more than a dozen new CSP plants are being planned in the United States, with some 3,100 megawatts expected to come online by 2012. (See data.) Some impressive CSP projects in the planning stages include the 553-megawatt Mojave Solar Park in California, the 500-megawatt Solar One and 300-megawatt Solar Two projects in California, a 300-megawatt facility in Florida, and the 280-megawatt Solana plant in Arizona.

In Spain, the first commercial-scale CSP plant to begin operation outside the United States since the mid-1980s came online in 2007: the 11-megawatt PS10 tower. The tower is part of the 300-megawatt Solúcar Platform, which, when completed in 2013, will contain ten CSP plants and produce enough electricity to supply 153,000 homes while preventing 185,000 tons of carbon dioxide (CO2) emissions annually. All told, more than 60 plants are in the pipeline in Spain, with 2,570 megawatts expected to come online by 2012.

Economic and policy incentives are partly responsible for the renewed interest in CSP. The incentives in the United States include a 30-percent federal Investment Tax Credit (ITC) for solar through the end of 2008, which has good prospects for being extended, and Renewable Portfolio Standards in 26 states. California requires that utilities get 20 percent of their electricity from renewable sources by 2010, and Nevada requires 20 percent by 2015, with at least 5 percent from solar power. The primary incentive in Spain is a feed-in tariff that guarantees that utilities will pay power producers €0.26 (40¢) per kilowatt-hour for electricity generated by CSP plants for 25 years.

In the southwestern United States, the cost of electricity from CSP plants (including the federal ITC) is roughly 13–17¢ per kilowatt-hour, meaning that CSP with thermal storage is competitive today with simple-cycle natural gas-fired power plants. The U.S. Department of Energy aims to reduce CSP costs to 7–10¢ per kilowatt-hour by 2015 and to 5–7¢ per kilowatt-hour by 2020, making CSP competitive with fossil-fuel-based power sources.

Outside the United States and Spain, regulatory incentives in France, Greece, Italy, and Portugal are expected to stimulate the installation of 3,200 megawatts of CSP capacity by 2020. China anticipates building 1,000 megawatts by that time. Other countries developing CSP include Australia, Algeria, Egypt, Iran, Israel, Jordan, Mexico, Morocco, South Africa, and the United Arab Emirates. (See map.)

Using CSP plants to power electric vehicles could further reduce CO2 emissions and provide strategic advantages by relaxing dependence on oil. In Israel, a tender issued by the Ministry for National Infrastructures for the construction of CSP plants and a 19.4¢ per kilowatt-hour feed-in tariff for solar power systems are sparking interest in developing up to 250 megawatts of CSP in the Negev Desert. This would produce enough electricity to run the 100,000 electric cars that Project Better Place, a company focused on building an electric personal transportation system, is planning to put on Israeli roads by the end of 2010.

A study by Ausra, a solar energy company based in California, indicates that over 90 percent of fossil fuel–generated electricity in the United States and the majority of U.S. oil usage for transportation could be eliminated using solar thermal power plants—and for less than it would cost to continue importing oil. The land requirement for the CSP plants would be roughly 15,000 square miles (38,850 square kilometers, the equivalent of 15 percent of the land area of Nevada). While this may sound like a large tract, CSP plants use less land per equivalent electrical output than large hydroelectric dams when flooded land is included, or than coal plants when factoring in land used for coal mining. Another study, published in Scientific American in January 2008, proposes using CSP and PV plants to produce 69 percent of U.S. electricity and 35 percent of total U.S. energy, including transportation, by 2050.

CSP plants on less than 0.3 percent of the desert areas of North Africa and the Middle East could generate enough electricity to meet the needs of these two regions plus the European Union. Realizing this, the Trans-Mediterranean Renewable Energy Cooperation—an initiative of The Club of Rome, the Hamburg Climate Protection Foundation, and the National Energy Research Center of Jordan—conceived the DESERTEC Concept in 2003. This plan to develop a renewable energy network to transmit power to Europe from the Middle East and North Africa calls for 100,000 megawatts of CSP to be built throughout the Middle East and North Africa by 2050. Electricity delivery to Europe would occur via direct current transmission cables across the Mediterranean. Taking the lead in making the concept a reality, Algeria plans to build a 3,000-kilometer cable between the Algerian town of Adrar and the German city of Aachen to export 6,000 megawatts of solar thermal power by 2020.

If the projected annual growth rate of CSP through 2012 is maintained to 2020, global installed CSP capacity would exceed 200,000 megawatts—equivalent to 135 coal-fired power plants. With billions of dollars beginning to flow into the CSP industry and U.S. restrictions on carbon emissions imminent, CSP is primed to reach such capacity.

Should you like to know more about solar opportunities in NJcontact HBS Solar 857-857-1230 or email george@hbsadvantage.com