POWER September 2014 - 70

RENEWABLES
3. One of many? The Salton Sea's 49.9-MW Hudson Ranch Power I power plant could be joined
by similar plants when the California water body shrinks further. Courtesy: Geoglobal Energy LLC
ers of Wildlife, and the Natural Resources
Defense Council.
Says state Assemblyman V. Manuel
Pérez, a Democrat who represents the desert
region and is one of the co-sponsors of
SB 1139, " Geothermal, with its ability to
provide base load power with negligible
greenhouse gas emissions, has the potential
to anchor Southern California's energy
needs, while keeping us on track to achieve
our state's emissions reductions goals. At
the same time, the development of these
resources could produce thousands of jobs
for our Coachella and Imperial Valley communities
while also serving as a source of
financing for Salton Sea restoration. "
Geothermal energy policy is also getting
The least-cost portfolio " is one with a diversity
of renewable resource technologies " -
which, says the geothermal industry, includes
geothermal power.
California has been on a solar buying
binge, the E3 report noted. Solar is heavily
subsidized at the federal and state level,
including Uncle Sam picking up some 30%
of the costs. " Geothermal does not have that
incentive, " says Gawell. On top of that federal
largess, solar projects in California are
exempt from property taxes. They also benefit
from photovoltaic arrays manufactured
overseas by companies that are subsidized
by their governments. Subsidies " should be
available to the range of clean power options
and not just one, " says the GEA.
California's existing RPS program discriminates
against geothermal, according
to industry officials. Bob Sullivan of
Ormat Technologies, one of the nation's
major geothermal developers, says, " California
has a preferred loading order, and
renewables are at the very top along with
distributed generation and efficiency. Then
fossil fuels start coming on. But geothermal
keeps getting overlooked. "
California's power supply program, Ormat's
Sullivan says, doesn't recognize the
value that geothermal represents in terms
of providing necessary ancillary services
such as frequency, inertia, and regulation.
Intermittent resources such as wind and
solar impose reliability burdens on the
grid that the state's power market does
not recognize. The E3 report said, " This is
particularly pressing in California where
70
significant changes are planned to the
state's existing thermal generation fleet,
including the retirement of coastal generators
utilizing once-through cooling. "
Some Hope on the Horizon
The California legislature, as this article
was being written, was moving a bill (SB
1139) that would give a boost to geothermal
energy, as well as provide a way to fund
environmental mitigation of the increasing
degradation of the Salton Sea (created by
an accidental 1905 flood), which bestrides
the San Andreas fault in the California desert.
The Salton Sea covers a large and valuable
geothermal resource that will become
available as the inland sea shrinks. The bill
would mandate adding 500 MW of geothermal
procurement by 2024. Many developers,
including the Imperial Irrigation
District, a major municipal power agency,
are eying the opportunity to tap as much as
2,000 MW in new capacity from the Salton
Sea territory (Figure 3).
However, the lake's retreat uncovers
some environmental threats, such as high
concentrations of selenium and other potentially
toxic minerals in the soil. Restoring
the area and mitigating the environmental
impacts will be expensive. The California
legislation would use some of the revenues
from geothermal generation in the area to
pay for the restoration and remediation
program. The legislation, which has passed
the state Senate and the key Assembly committee,
has the backing of environmental
groups, including the Sierra Club, Defendwww.powermag.com
state
attention in Nevada, where the legislature
last year passed a law taking the state out
of coal-fired power and creating competitive
opportunities for geothermal. The Nevada
legislation requires the retirement of at least
300 MW of coal-fired capacity this year and
another 250 MW by the end of 2017. To replace
the coal power, the state law requires
a competitive procurement of 100 MW, each
in three future annual buys. A GEA analysis
concludes, " It's expected that geothermal
power will win a portion of these 100 MW
[requests for proposals], but it is a competitive
process. "
Further north, the Oregon Public Utilities
Commission has tweaked its calculations of
the avoided costs for renewables to include
" integration costs " for projects under 10 MW.
The GEA notes, " The past methodology for
calculating avoided cost did not factor in the
true cost of other renewable power sources,
leaving out integration and other ancillary
costs. " Calculation of these costs will prove
to be a complex task, according to several
economists who have looked at valuing integration
of resources into the grid.
When it comes to promoting U.S. geothermal
energy projects, says the GEA's
Gawell, " There's not much moving at the
federal level. The dynamic changes are at
the state level. It's the states that drive the
game. " He's optimistic about prospects for
geothermal in the U.S., but says it's unlikely
that the industry will grow at the pace of the
international market.
Even so, the growth internationally is
good news for U.S. geothermal firms, says
Gawell. " Our companies have much to offer
foreign project developers in terms of
technology, strategy and experience. American
firms are experts in the problems other
countries are just getting to, " which represents
a major business opportunity for the
U.S. companies. ■
-Kennedy Maize is a POWER
contributing editor.
POWER | September 2014

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POWER September 2014

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