Geothermal power on the rise

November 10, 1:11 PMEnergy ExaminerJohn Guerrerio

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The US has abundant geothermal resources.
Wikipedia Commons

The US generates over 3,000 megawatts of electrical power from geothermal resources (that is roughly 3 large coal-fired power plants), making it the global leader.  As of June 2009, geothermal and other renewables accounted for a mere 3% of total US net electricity generation.

This should leave plenty of room for growth for renewables and the geothermal industry in particular.

A recent report from Islandsbanki, a bank in Iceland, found that the US "could generate another 40,000 megawatts from geothermal resources, while the development of new enhanced geothermal systems could bring an additional 517,800 megawatts online". (NYT)

Of course, this is long-range thinking.  Currently plaguing the industry is an investment bottleneck of sorts.

Geothermal projects require investment for both the drilling phase and the construction phase.  According to the report, "current projects need a combined investment sum of US $26 billion, of which $11 billion are equity investment needs and $15 billion is construction financing". 

Geothermal energy shows great promise for utilities facing renewable power generation quotas because of its reliable baseload capacity.  Unlike the intermittency problems faced in the wind and solar industries, geothermal is always on once it is built and is competitive with fossil-fuel derived power prices.

Still, investment in geothermal power plant construction lags behind solar and wind development. 

All power plants work essentially in the same way; they turn water into steam, which then spins a turbine to generate electricity.  Coal power plants heat the water by burning coal, requiring a constant supply of coal, water to turn into steam, and a system for removing toxic emissions; solar power plants heat the water by focusing the sun's rays, requiring mirrors to focus the sun's energy, some kind of storage system like molten salt, and water to turn into steam; geothermal power plants heat the water using the heat from the earth's crust, requiring only water to turn into steam.

The stimulus package and the US Treasury Grant program seek to offer some incentives to investors that help them get back into the business of financing renewable energy projects.  Whether investors flock toward the still sleeping giant in geothermal energy remains to be seen.