Utilities Turn To Geothermal to Combat Surging Energy Prices

With oil prices increasing, several utilities have initiated geothermal projects in the last month as a way to control energy prices and diversify their portfolios.

With oil prices increasing, several utilities have initiated geothermal projects in the last month as a way to control energy prices and diversify their portfolios.

U.S. Geothermal Inc., a Boise-based alternative energy company, held groundbreaking celebration for the first geothermal power plant in Idaho and the Pacific Northwest July 29, on the project site at Raft River, Idaho.

This new binary geothermal power plant will be constructed upon the same 8.2-square mile site where the world’s first experimental binary geothermal power plant was constructed and operated by the U.S. Department of Energy between 1974 and 1982.

U.S. Geothermal, which is scheduled to begin production at their new power plant next year, has a 20-year Power Purchase Agreement with the Idaho Power Company for delivery of an average of 10 megawatts of electricity average each month. Ultimately, the site could yield up to 90 megawatts of electricity, according to studies of the proven energy reservoir.

Meanwhile, Pacific Gas and Electric Company announced it has entered into contracts with IAE Truckhaven I, LLC and Northwest Geothermal Company to purchase up to a total of 169 megawatts (MW) of renewable geothermal energy — enough power to supply more than 125,000 PG&E customers.

The utility currently supplies 32 percent of its customer load from renewable resources: 20 percent from its large hydroelectric facilities and 12 percent from smaller renewable resources that qualify under the State’s Renewable Portfolio Standard (RPS) Program.

The geothermal project marks the fourth and fifth contracts originating from the 2005 RFO solicitation and bring the total renewable generation added as a result to 274 MW. PG&E is currently in discussion with additional market participants that submitted bids in the 2005 RFO solicitation and anticipates submitting additional contracts for renewable energy in the next few months.

Also last month, Western GeoPower Corp., a renewable energy development company, has announced the acquisition of a geothermal lease for the Unit 15 Steam Field covering 421 acres within the Geysers Geothermal Field in Northern California. The lease grants Western GeoPower the right to re-develop the geothermal reservoir and build a new plant for electricity generation.

“We expect that Unit 15 can be developed more quickly than the implementation of an exploration project, by taking advantage of an immediately available resource database, production history, regional infrastructure, systems efficiencies and technical experience,” says said Kenneth MacLeod, president and chief executive officer of Western GeoPower.

Commercial geothermal power has been generated continuously at the field since 1960 the company says, with the present generation level being about 900 megawatts.

The Unit 15 leasehold is situated in the southwestern region of The Geysers Field in Sonoma County and much of the leasehold lies within the presently known boundary of The Geysers Field. A commercial power plant of 62 megawatt (gross) capacity, known as P.G. & E. Unit 15, operated at the leasehold during 1979-1989.

The company expects the leasehold to be capable of supporting a power plant of up to 30 megawatt capacity and individual wells are expected to be capable of supplying up to 8 megawatts each. Western GeoPower will retain GeothermEx, Inc. of Richmond, California, to provide an independent assessment of the resource.

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  posted on 8/2/2006   Article Use Policy

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