Fresh Interest in Geothermal Bubbling to the Surface
A new era of investment has cropped up as current companies grow revenues in
delivering production equipment
A number of articles in February discuss the potential of geothermal energy. Forbes (Lawrence): “Rumblings in the geothermal power sector have been highlighted in early 2013 by several important developments.” The article points to a startup, AltRockEnergy (funded by Google, Khosla Ventures, Kleiner Perkins, and Vulcan), that has achieved cost reductions through “multiple engineered geothermal areas from a single drilled well at its Newberry project outside of Bend, OR. JP Morgan, meanwhile, has purchased an interest in eight existing geothermal plants owned and operated by a US-based subsidiary of Ormat Technologies.” The article believes this signals a likely expansion in the next decade in geothermal power. There are cautions. “Although the levelized cost of geothermal power is competitive with fossil fuel-based plants, the drilling required to exploit resources involves significant risk and requires large capital outlays, with often speculative ROI potential.”
New technology developments grow the field. An article in AltEnergyMag.com (Cobb) notes: “Historically, geothermal development was restricted to areas with substantial tectonic activity or volcanism, such as The Geysers field in California … [However], recent technological developments are feeding increased geothermal development in areas with little or no tectonic activity or volcanism:
• Low Temperature Hydrothermal—Energy is produced from subsurface areas with naturally occurring high fluid volumes at temperatures ranging from less than boiling to 300°F (150°C).
• Geopressure and Coproduced Fluids Geothermal—Oil and/or natural gas are produced together with electricity generated from hot geothermal fluids drawn from the same well.
• Enhanced Geothermal Systems (EGS)—Subsurface areas with low fluid content but high temperatures are “enhanced” with injection of fluid and other reservoir engineering techniques. EGS resources are typically deeper than hydrothermal resources and represent the largest share of total geothermal resources capable of supporting larger capacity power plants.
Building on an installed base. An article on NASDAQ.COM (StreetAuthority) reports that “There are already 3200 MW of geothermal generating capacity in place just in the United States—the energy equivalent of burning 70 million barrels of oil annually. According to the World Geothermal Congress, current global capacity of 10,500 MW is forecast to rise by more than 70% to reach 18,500 MW in 2015.” This article touts a particular company, Ormat Technologies. It both builds geothermal power plants and sells electricity and has a product division. The product division designs and manufactures power units for other companies.
That article states, “there is an active market for this equipment, as well as ongoing maintenance and service. Through the first three quarters of 2012, Ormat's product division chalked up $150 million in sales, more than double the $67 million from the first three quarters of 2011. And there is more on the horizon, as evidenced by a healthy order backlog of $192 million, compared with $50 million just two years ago.”