Oregon Geothermal Working Group Meeting

1

• Oregon Geothermal Working Group Meeting
• November 3, 2005
• Curtis Framel
• DOE Western Regional Office
• Curtis.Framel_at_ee.doe.gov

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Agenda
900 AM Welcome introductions, Carel DeWinkel,
Oregon DOE 915 AM GPW Initiative Status
Report, Curtis Framel, USDOE 945 AM Highlights
from the GRC Annual Meeting, Al Waibel and Alex
Sifford 1000 AM The New Energy Bill, Curtis
Framel, USDOE 1015 AM Utility Geothermal Working
Group, Randy Manion, WAPA 1030 AM Break 1045
AM RPS Efforts in Salem, Troy Gagliano, RNP 1145
AM PURPA Update, Carel DeWinkel, Oregon DOE 1200
Lunch 130 PM Lake County Geothermal
Prospects Crump Geyser, Brian Fairbank, NGP,
Inc. Lakeview, Phil Rendahl, Geothermal Power,
LLC Christmas Valley, Vicki McConnell or Clark
Niewendorp, DOGAMI 300 PM Newberry Volcano
Project, Jim Hansen, AHZ, LLC 330 PM Next Steps
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GeoPowering the WestThe Time is Right
This modest investment by the Federal government
has the potential to stimulate billions of
dollars in investment and tens of thousands of
new jobs, and in turn make Nevada the Saudi
Arabia of geothermal energy.

• Goals
• 1. Reduce the transactional costs of geothermal
  power and direct use development by removal,
  reduction, or mitigation of institutional
  barriers.
• 2. Characterize geothermal energy as clean, safe
  and reliable so that it is appropriately valued
  in the utility sector.

Senator Harry Reid, Nevada
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Market Factors and Barriers Overview

• Transactional Costs
• Technical Unfamiliarity
• Power Market Expectations
• Leasing, Permitting, and Public Policies
• Environmental, Tribal, and Public Perception

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GPW Approach Short Version
A state-focused strategy GPW builds state-level
support for increased use of geothermal energy.
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GPW Partners

• Idaho National Laboratory
• National Renewable Energy Laboratory
• Sandia National Laboratories
• Tribal Groups
• Geothermal Industry, Utilities, Universities . .
  .
• State Energy Offices (and other state agencies)

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GPW Tasks

• State-based activities
• Geologic assessments
• Interagency facilitation and collaboration
• Utility sector support
• RD technology transfer.

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Geologic Assessments

• Identify and enlist geoscience experts
• Assemble geothermal resource data
• Interface with U.S. Geologic Survey on national
  update

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Interagency Facilitation Collaboration

• Cataloging assessing impediments and
  institutional issues
• Engaging various agencies, such as the U.S. BLM,
  U.S. Forest Service, U.S. Dept. of Agriculture,
  U.S. Dept. of Defense, and the U.S. EPA
• Engaging utility organizations (e.g., WAPA,
  APPA)

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Utility Sector Support

• Identify or target likely geothermal
  energy-buying utilities or other potential
  utility sector stakeholders
• Assess geothermal performance with utilities or
  stakeholders currently buying geothermal energy
• Increase awareness of the competitiveness of
  geothermal power with other generation
  technologies, especially the baseload advantage
• Create greater utility and retail customer
  acceptance of geothermal technologies

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GPW Check Up
In 2004, GPW underwent a peer review the
following areas were noted for improved health of
the initiative.

• Focus on state level collaboration, such as
  state working groups
• Coordinate information, communications, and
  outreach activities
• Address and develop partnerships with utility
  industry
• Encourage greater federal and state interagency
  coordination regarding barriers and policy.

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GPW Measures of Success?
Between January and May 2005, there were 483 MW
of power purchase agreements signed. Karl
Gawell, GEA, July 29, 2005
If you look at what has happened in the
geothermal industry in terms of projects that are
under development since the project GPW started
five years ago, we probably have 500 to 700
million dollars of projects in the hopper. I
think again that we are at the level of awareness
that what GPW has done is an element in making it
work. So go back to those who say "What are we
getting?" We're getting ½ billion dollars or more
in new projects that are in the hopper that
wouldn't have been there had it not been for this
multi-pronged effort to get geothermal
development going.  GPW is the educational and
outreach element that tied everything together. I
think you can make that claim and industry would
back it up, certainly I would. - Dan Schochet,
ORMAT, June 8, 2004
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GPW - We Learn From Each Other
GPW seeks ways to interact with stakeholders and
participants like the states to enhance
awareness of geothermal potential and development
opportunities. Sharing experiences, solutions,
and lessons-learned with each other is a key
benefit of GPW.
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• Oregon Geothermal Working Group Meeting
• November 3, 2005
• Curtis Framel
• DOE Western Regional Office
• Curtis.Framel_at_ee.doe.gov

15
The New Energy BillWhat Does it Mean for
Geothermal Development
President Bush signed the energy bill on August
8th. Credit Eric Draper, White House
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President Bush, upon signing the 2005 Energy
Bill, said

• The bill offers new incentives to promote clean,
  renewable geothermal energy. When you hear us
  talking about less dependence on foreign sources
  of energy, one of the ways to become less
  dependent is to enhance the use of renewable
  sources of energy.

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The geothermal provisions are a dramatic
improvement in the law. They will encourage the
rapid expansion of geothermal energy use in the
West. Karl Gawell, exec. director,Geothermal
Energy AssociationVitally needed provisions
in the Energy Policy Act of 2005 will breath new
life into U.S geothermal industry
development.Ted Clutter, exec. director,
Geothermal Resources Council
What Does it Mean for Geothermal
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Production Tax CreditSection 45

• A 1.9 cents/kWh credit is in place, and
  developers may claim this credit for ten years
  instead of only five years, as was the case until
  the new energy legislation went into effect. The
  generation facility must be placed in service
  by December 31, 2007.

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Utility Cooperatives

• This provision allows cooperatives to pass any
  portion of the production tax credit to their
  members, thus sharing financial incentives with
  investors.

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Clean Renewable Energy Bonds

• This provision creates a new Clean Renewable
  Energy Bond (CREB) to provide cooperatives, other
  not-for-profit electric companies, and Indian
  Tribal governments incentives for building new
  geothermal and other qualified energy projects.

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Royalties

• Old law 50/50 split between federal and state
  governments.
• New law States get 50, federal and local
  governments get 25 each.

For a small county like Churchill, its a big
deal. Commissioner Norman Frey, Churchill
County (Nevada) The new 25 split could mean
about 1.5 million for Churchill County, which
could go toward the library or senior center,
according to Commissioner Frey.
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Leasing

• Old law BLM often failed to process lease
  applications or hold lease sales. Most leases
  sold non-competitively.
• New law There will be regular lease sales at
  least every two years in states with geothermal
  resources, and all leases will be subject to
  competitive bidding.

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Direct Use GeothermalUsed by ranchers,
communities and others for purposes other than
electricity production.

• Uses a simpler procedure for leasing on federal
  lands and establishing a fee schedule instead of
  royalty payments.
• State and local governments are now allowed to
  use geothermal resources for public purposes at a
  nominal charge.

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Direct Use Geothermal

• There are 18 geothermal district-heating systems
  operating in the western United States.
• Over 270 cities in the western U.S. are close
  enough to geothermal reservoirs to use district
  heating.

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Federal Purchase Requirement

• The President, acting through the Secretary of
  Energy, shall seek to ensure that, to the extent
  economically feasible and technically
  practicable, the federal governments' electricity
  consumption shall be from renewable energy by the
  following amounts
• Not less than 3 in fiscal years 2007 through
  2009.
• Not less than 5 in fiscal years 2010 through
  2012.
• Not less than 7.5 in fiscal years 2013 hence
  forward.

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Benefits

• Clean power and job creation

A recent estimate produced for the Western
Governors Associations geothermal task force
indicates a near-term potential to expand power
production to 8,300 MW in eleven western states
presently at 2800 MW in just four
states. According to the Geothermal Energy
Association, this would result in the creation
of over 100,000 new power plant, manufacturing,
and construction jobs.
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State of Oregon

• Adding this energy resource to the growing
  opportunities associated with indigenous
  resources for environmental and economic
  development in Oregon power and direct use.