Geothermal Energy Market Potential

Geothermal Energy Market Potential

Geothermal power is the use of geothermal heat to generate electricity. Geothermal comes from the Greek words geo, meaning earth, and therme, meaning heat.

The utilization of geothermal energy for the production of electricity dates back to the early part of the twentieth century. For 50 years the generation of electricity from geothermal energy was confined to Italy and interest in this technology was slow to spread elsewhere. In 1943 the use of geothermal hot water was pioneered in Iceland. Estimates of exploitable worldwide geothermal energy resources vary considerably.

The largest dry steam field in the world is The Geysers, about 90 miles (145 km) north of San Francisco. The Geysers began in 1960 which has 1360 MW of installed capacity and produces about 1000 MW net. Calpine Corporation now owns 19 of the 21 plants in The Geysers and is currently the United States' largest producer of renewable geothermal energy. The other two plants are owned jointly by the Northern California Power Agency and Santa Clara Electric. Since the activities of one geothermal plant affects those nearby, the consolidation plant ownership at The Geysers has been beneficial because the plants operate cooperatively instead of in their own short-term interest. The Geysers is now recharged by injecting treated sewage effluent from the City of Santa Rosa and the Lake County sewage treatment plant. This sewage effluent used to be dumped into rivers and streams and is now piped to the geothermal field where it replenishes the steam produced for power generation.

Another major geothermal area is located in south central California, on the southeast side of the Salton Sea, near the cities of Niland and Calipatria, California. As of 2001, there were 15 geothermal plants producing electricity in the area. CalEnergy owns about half of them and the rest are owned by various companies. Combined the plants have a capacity of about 570 megawatts.

Geothermal energy can be used as an efficient heat source in small end-use applications such as greenhouses, but the consumers have to be located close to the source of heat. Geothermal energy has a major environmental benefit because it offsets air pollution that would have been produced if fossil fuels were the energy source. Geothermal energy has a very minor impact on the soil - the few acres used look like a small light-industry building complex. Since the slightly cooler water is reinjected into the ground, there is only a minor impact, except if there is a natural geyser field close by.

This report explores the factors associated with utilizing the actual potential of geothermal energy. The report covers all the technological details, along with issues and challenges faced during the utilization of geothermal energy. Major projects, power plants, players in the industry, the major role of the United States in the global geothermal industry, the active role of the U.S. Department of Energy, and the various environmental benefits of using geothermal energy are all explored in-depth in this report.

Executive Summary 6

Introduction 7
Historical Background 7
Present Status of Geothermal Utilization 7
Nature of Geothermal Resources 8
Looking at the Earth’s Thermal Engine 8
Geothermal Systems 11
Formation of Geothermal Reservoir 15

Defining & Classifying Geothermal Resources 16

Geothermal Exploration 20
Exploration Methods 21
Exploration Programs 22

Utilization of Geothermal Resources 24
Electricity Generation 26
Direct Heat Uses 29

Geothermal Power Plant Electricity Generation 36
Flashed Steam Plants 36
Dry Steam Plants 37
Binary Power Plants 37
Hybrid Power Plants 38

Non-Electrical Use of Geothermal Energy 39

Economic Considerations 41

Environmental Impact 44
Sources of Pollution 44

Reducing Carbon Emissions from Geothermal Power in U.S. 47
Geothermal Resource in the U.S. 48
Potential for Power Production 51
WGA Estimates of Short-Term Power Production Potential 52
Technology Development Economics 53
Infrastructure Performance & Emissions Indicators 56
Challenges and Opportunities 58
Conclusion 60

Environmental & Energy Benefits of Geothermal Heat Pumps 61
Overview 61
Energy Benefits 61
Environmental Benefits 62
Greenhouse Gas Mitigation and Emissions Reductions 62
Ozone Layer Damage 62
Human Health 62
Role of the U.S. Department of Energy 63
Impressive Market Growth 63
Case Study – Fort Polk Army Base 63

Geothermal Sustainability 65
Introduction 65
Renewability & Sustainability 65
Effects of Heat/Fluid Production from a Geothermal Reservoir 66
“Mining” Geothermal Resources? 67
Geothermal Regeneration Time Scales 67
Geothermal Heat Pumps 67
Doublet System Using a Hydrothermal Aquifer 68
Low-Enthalpy Resources 69
High-Enthalpy Two-Phase Reservoir 69
Enhanced Geothermal System (EGS) 70
Summary 70
Looking at a Sustainable Production Level 71
Conclusion 72

Geothermal Heat Pumps for Medium & Large Buildings 73
Improving the Bottom Line 73
Roadmap for Success 74
How a GHP System Works 74
Comfort & Security 75
Case Study – World’s Largest GHP System 75

DOE’s Geothermal Program 76
Geoscience and Supporting Technologies 77
Exploration and Drilling Research 77
Energy Systems Research and Testing 78

Present & Future of Geothermal Energy 80

Case Study: Utilization of Geothermal Energy in Railway Tunnels 81

Major Projects 82
Chena Hot Springs 82
The Geysers 82
Puna Geothermal Venture 83
Desert Peak 83
Blundell Geothermal Plant 83

Leading Players 85
Calpine Corporation 85
Caithness Energy 85
Nevada Power, Co. 87
Northern California Power Agency 89
Ormat International, Inc. 90

Appendix 92

Glossary 100


List of Figures & Tables

Figures
Figure 1: The Earth's Crust, Mantle, & Core. Top Right: A Section through the Crust & the Uppermost Mantle 9
Figure 2: Schematic Cross-Section Showing Plate Tectonic Processes 10
Figure 3: World Pattern of Plates, Oceanic Ridges, Oceanic Trenches, Subduction Zones, & Geothermal Fields 11
Figure 4: Representation of an Ideal Geothermal System 12
Figure 5: Model of a Geothermal System 13
Figure 6: Formation of a Geothermal Reservoir 15
Figure 7: Diagram Showing the Different Categories of Geothermal Resources 17
Figure 8: Diagram Showing the Utilization of Geothermal Fluids 25
Figure 9: An Atmospheric Exhaust Geothermal Power-Plant 26
Figure 10: A Condensing Geothermal Power-Plant 27
Figure 11: A Geothermal Binary Power Plant 28
Figure 12: Flow Diagram of the Geothermal District Heating System of Reykjavik. 30
Figure 13: Application of Ground-Coupled Heat Pump System 31
Figure 14: A Heat Pump in Heating Mode 32
Figure 15: Growth Curves for Some Crops 33
Figure 16: Effect of Temperature on Growth or Production of Food Animals 34
Figure 17: Flashed Steam Plant 36
Figure 18: Dry Steam Plant 37
Figure 19: Binary Cycle Plant 38
Figure 20: Cascade Uses of Geothermal Energy 42
Figure 21: Geothermal Temperatures at 6 Kilometer Depth 47
Figure 22: Recoverable EGS Energy Distribution with Depth 49
Figure 23: WGA Supply Curve for Geothermal Power Generation, Alternate Cases, LCOE versus Cumulative Generating Capacity 53
Figure 24: Geothermal Supply Curves 55
Figure 25: Carbon Emissions Displaced by Geothermal Power 58
Figure 26: The Earth's Interior 92
Figure 27: Residential GeoExchange Unit 92
Figure 28: Geothermal Power Plant 93
Figure 29: Conceptual Illustration of a Two-Well Enhanced Geothermal System 93
Figure 30: Schematic Showing How a Binary-Cycle Power Plant Works 94
Figure 31: Ground-Water Source Heat Pump 94
Figure 32: Horizontal Loop System 95
Figure 33: Vertical Loop System 95
Figure 34: Comparison Between GHP and Conventional Systems: Electricity Used (kW/ton) 96
Figure 35: Geothermal Power Plant at The Geysers, California 96
Figure 36: World Geothermal Provinces 97
Figure 37: U.S. Geothermal Provinces 97
Figure 38: Flash Steam Power Plant 98
Figure 39: Direct-Heat Uses 99

Tables
Table 1: Classification of Geothermal Resources (°C) 18
Table 2: Energy & Investment Costs for Electric Energy Production from Renewables 43
Table 3: Energy & Investment Costs for Direct Heat from Renewables 43
Table 4: Probability & Severity of Potential Environmental Impact of Direct-Use Projects 44
Table 5: Estimates of U.S. Geothermal Resource Base Total Stored Thermal Energy Content 48
Table 6: Projected New Hydrothermal Power Capacities in the Western U.S. through 2015 52
Table 7: Estimated Generation Costs from 2005 MYPP Reference Cases 54
Table 8: Relative Flashed-Steam Power Plant Emissions per Megawatt of Capacity 57
Table 9: Global Geothermal Potential 80
Table 10: Geothermal Energy Resource Base Compared with Oil Reserves 98