Utility Geothermal Working Group Findings

1
Utility Geothermal Working Group Findings

• Prepared for
• The GRC Annual Meeting
• September 10-13, 2006
• Guy Nelson, UGWG Team Leader

2
Utility Geothermal Working Group

• And the Geothermal Resources Council
• Guy Nelson, Team Leader
• [phone]
• Gnelson181_at_aol.com

3
What is the Utility Geothermal Working Group?

• The UGWG is a group of utilities and ancillary
  associations formed under the US Department of
  Energys (DOE) Geopowering the West (GPW)
  Initiative

4
UGWG Support

• UGWG is supported by a number of organizations,
  including
• Bonneville Power Administration (BPA)
• DOE
• Geothermal Resources Council (GRC)
• Western Area Power Administration (Western)

5
UGWG Mission

• To accelerate the appropriate integration of
  three geothermal technologies into mainstream
  applications
• Power Generation
• Direct Use
• GeoExchange

6
Some UGWG Members

• Arizona Public Service BPA
• State Working Groups GRC
• Sandia National Lab Western
• Idaho National Lab Ormat, Intl
• South San Joaquin ID Palo Alto Utilities
• Salt River Project Redding Electric
• Seattle City Light Springfield UB

7
Prior 2006 Webcasts

• Power Generation January 24
• Direct Use March 14
• GeoExchange April 18
• Transmission Issues June 7
• Tale of Two Buildings August 2
• And monthly teleconference meetings (first
  Wednesday of the month 9-11am PDT

8
GRC Annual Meeting

• UGWG Annual Meeting in conjunction with the GRC
  meeting
• UGWG Members encouraged to submit papers for the
  GRC meeting
• 2 sessions are designed to address Utility Issues
  (Monday and Wednesday)

9
Major Finding (Affirmation)Cost Effective Energy
Efficiency is the first choice
10
Duct Loss and Testing
11
Geothermal Power Production

• UTILITY GRADE POWER
• ? Modular power plants are readily expanded as
  needs increase
• ? Power costs competitive with current fossil
  fuel technologies
• ? Base Load power produced 24/7 _at_ over 90
  Capacity Factor
• ? Fuel Risk assumed by project operator not by
  consumer
• SUSTAINABLE ENVIRONMENTALLY SAFE
• ? Many projects operating for decades at 98
  availability
• ? Geothermal is non-combustion - near zero
  emissions
• MINIMAL SURFACE USE- INDEPENDENT OF WEATHER
• FIELD PROVEN TECHNOLOGIES - 8,000 MW WORLD WIDE
• STRAIGHT FORWARD TO INSTALL, OPERATE AND
  MAINTAIN
• ? Projects developed over 3 year period - OM
  by local staff

12
Binary Cycle Power Plant
13
Average Capital and Delivered Costs
22000
Capital Cost (US/kW)
Solar Photovoltaic
4000
3000
New Geothermal without PTC
2000
Coal
Wind without PTC
1000
Cost of delivered energy (US/kWh)
Gas
0
0.04
0.06
0.08
0.10
0.14
0.16
0.12
0.86
0.18
0.88
0.20
0
0.02
Source International Energy Agency Ormat
14

• PROJECT DEVELOPMENT 20 MW net
• 1. Exploration resource assessment 5.0 M
• 12 Months time frame
• 2. Well field drilling and development
  15.0
• 12 Months time frame after completion of item
  1
• 3. Power plant, surface facilities,
  transmission 30.0
• 18 Months time frame with overlap of item 2
• 4. Other costs 10.0
• Commitment fees
• Legal Accounting fees
• Consultants,
• Interest during construction, and
• Debt service and operating reserve
• Construction contingencies and Developers fee
  
• 12 Month process which should begin after
  completion of item 1
• 5. TOTAL FINANCED COST FOR 20 MW PROJECT 60 M
• To be provided as construction phase financing
  

15
GEOTHERMAL PAINS AND PLEASURES

• Lifetime supply of fuel capitalized no fuel
  price risk.
• Only operating costs escalate tied to
  inflation index.
• Best economics if power plants run full output.
• Base load operation effective use of
  transmission lines.
• Purchasing utility can get energy
  environmental attributes.
• Commercial capacity may be more/less than
  predicted.
• PPAs should allow for long term changes in geo
  resource.
• Development permitting stringent project
  delays common.
• Air cooled systems require no water consumption
  
• but output may vary by /- 20 winter/summer.
  

16
UGWG Draft Steps to Implementing a Successful
Geothermal Power Project

• 1. Delineated geothermal resource, with
  bankable
• report, defining probable long term
  performance.
• 2. Financible Power Purchase Agreement from a
  
• Creditworthy purchaser.
• 3. Defined permitting path without pitfalls.
• 4. Credible developer with proven track record
  and
• experienced supply/subcontract team.
• 5. Control of entire geothermal resource to
  preclude
• competing interests for same fluid/steam
  supply.
• 6. Use of Proven Technologies.

17
Future 2006 UGWG Activitiesin conjunction with
Western, UWIG, NREL, APPA, and NRECA

• Intro to RECs Oct 4
• REC Markets Oct 11
• Project 25x25 Nov 1
• Central Solar Option Nov 17
• Power Generation Dec 6
• CREBs Dec 7

18
Contact Information

• Guy Nelson, UGWG Team Leader
• [phone]
• Gnelson181_at_aol.com