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Frequently Asked Questions

  1. What is geothermal energy?
  2. How can geothermal resources be used?
  3. Where can I find more information on geothermal resources, specifically electrical generation?
  4. Why is geothermal energy "environmentally friendly"?
  5. Why is geothermal considered a renewable energy resource?
  6. Does technology exist to extend reservoir life?
  7. What is the geothermal power capability in the United States and how does it compare to the overall electrical power generation capacity?
  8. Why has there not been greater development of US geothermal capacity?
  9. What has changed over the last five years to make geothermal energy a financially attractive source of electricity
  10. Please identify the improvements in geothermal power generation.
  11. What has given rise to growth in the demand for electricity?
  12. What do you mean by Green Power?
  13. What is the implication of natural gas supply on geothermal power?
  14. Please provide the history of the Raft River Geothermal Project.
  15. Identify what the DOE accomplished at Raft River.
  16. Why has there never been commercial electricity production at Raft River?
  17. What is the potential of Raft River?
  18. Please explain the difference between gross and base load (net power) production.
  19. How does Geothermal compare with WindPower?
  20. Could you elaborate on Question, How does Geothermal compare with WindPower?
  21. Are there any other considerations when comparing the two alternatives?
  22. Do any other publicly traded geothermal corporations exist?

What is geothermal energy?

Geothermal energy is heat ("thermal") derived from the earth ("geo"). It is the thermal energy contained in the rock and fluids, that fill the fractures and pores in the rocks that form the earth's crust.

How can geothermal resources be used?

High and Moderate temperature geothermal resources can be used to generate electricity. Low temperature geothermal resources can be used for a wide range of direct uses, e.g. district and space heating, industrial processes, greenhouses, aquaculture and spas.

Where can I find more information on geothermal resources, specifically electrical generation?

Some excellent sources of information include:

Why is geothermal energy "environmentally friendly"?

Unlike coal fired and natural gas fired power generation plants, the state of the art geothermal binary cycle plant produces virtually no emissions. When compared to natural gas, a 100 MW geothermal power generator offsets 190,000 pounds of NoX and SoX (nitrogen dioxide and sulphur dioxide) per year. Additionally, it eliminates 780 million pounds of CO2 emissions. The reduction in emissions, when compared to coal fired plants, is even greater. The binary cycle technology was pioneered at Raft River, Idaho in the early 1980s.

Why is geothermal considered a renewable energy resource?

All types of geothermal energy are renewable as long as the rate of heat extraction does not exceed the rate at which the thermal reservoir it depends upon is renewed by heat from the earth's magna. Geothermal reservoirs that tap the earth's heat for energy production typically have 30 to 50 year life as the plant's equipment wears out. Indeed the world's first geothermal power plant at Larderello, Italy was commissioned in 1913 and is still producing. The Geysers, California facility has been in production since the early 1960s.

Does technology exist to extend reservoir life?

Yes, in particular with binary plants since the water produced from the fracture system can be re-injected back into the fracture system and reheated by the source rock. Currently, Calpines, the owner of Geysers, is constructing a $163 million, 41-mile pipeline to move the effluent water from the City of Santa Rosa's sewage system for injection into the geothermal reservoir. The Raft River property of US Geothermal Inc. ("USGEO") will involve a binary system to save and re-inject water back into the fractures for reheating. The scheduled reservoir modelling will identify where to position injectors for the maximum benefit.

What is the geothermal power capability in the United States and how does it compare to the overall electrical power generation capacity?

In 1999, geothermal energy provided 0.4 % of US electricity generation, 14.3 million Megawatts hours (MWhr), enough electricity to service 1,400,000 average households. US geothermal capacity was 2,850 MW located primarily in California and Nevada.

Why has there not been greater development of US Geothermal capacity?

The development of geothermal power thorough the 1990s has been impeded by two factors: location and cost. In respect of location, most geothermal reservoirs are located in the Western States and specifically in areas which enjoyed excess electrical capacity. For example, Raft River in Idaho and the Newberry Caldera in Oregon are within the Bonneville Power Authority (BPA) system, which distributes hydropower from the Columbia River dams. Local electrical distributors like Idaho Power, and Pacific Power could service their clients by purchasing from the BPA the lowest cost electricity in the USA.

In respect of costs, prior to recent technological advances, the cost of developing geothermal reservoirs, building generators and operating them was between 6 cents and 8 cents per kilowatt hour (Kwh). The major sources of new electrical power generation in the 1990s and until recently was coal and natural gas. These sources were competitive in the 4 to 6 cent per Kwh range.

What has changed over the last five years to make geothermal energy a financially attractive source of electricity?

Four factors have contributed to the current focus on geothermal energy:

  • Advancements in technology, which have improved the efficiency and reduced the cost of geothermal power generation.
  • Growth in electricity demand in the Western States.
  • The Green Power movement.
  • Volatility in natural gas markets.

Please identify the improvements in geothermal power generation.

Technology has lead to greater efficiencies in geothermal power generation due to (a) improvements in submersible pumps, (b) improvements in turbine efficiency (c) 3-D reservoir modelling techniques. When the Department of Energy (DOE) tested one of the world's first binary power plant at Raft River in the early 1980s, the highest volume pump they could use was a 600 gallons per minute (gpm) line shaft unit. Today, submersible pumps are utilized that exceed 2,800 gpm with greater energy efficiency and less maintenance. New turbine technology, like the GE Rotoflow Expansion Turbine delivers 20% and greater output. Additionally, the application of 3-D reservoir models, using tracer elements to map the fracture system will ensure that development wells are located for maximum productivity. Preliminary engineering at Raft River indicates that by applying these new technologies, wells that produced 1.3 net MW are now capable of approximately 3.4 net MW.

What has given rise to growth in the demand for electricity?

Simply, the Western States in which the geothermal reservoirs are located have the greatest increase in population in the USA over the last decade. More households mean more electricity is consumed. For example, the combined population of Idaho, Washington and Oregon in 1960 was 5,289,000. This reference year is important because, with the exception of the Hungry Horse dam, in Northwest Montana, the Columbia River hydro-dams, which the Army Corps of Engineers had commenced in the early 1940s, had been completed. The US Census Bureau population estimate for the same three states on June 1, 2001 was 10,782,000. The projection for 2010 is 12,018,000. Additionally, the state of Utah, which borders the Raft River location, grew from 891,000 in 1960 to 2,270,000 in 2001 and is projected to have a population of 2,551,000 in the year 2010.

What do you mean by Green Power?

Green Power represents sources of power that are non-polluting. These sources include solar, wind, geothermal as well as run-of the-stream hydro. Currently, the Green Power movement is gaining momentum from three initiatives, (a) voluntary green power purchases where consumers pay a premium to their local utility to in-turn purchase green power, (b) state and federal government departments being mandated to purchase green power, (c) state legislated renewable energy portfolio standards (RPS) which set targets for utilities to ensure that a minimum percentage of their supply is from green power. Nevada has instituted a RPS, which requires a minimum 15% green power component by the year 2013 scaled from 5% in 2003. New Mexico has adopted a 10% RPS, and California adopted a 20% RPS. Arizona, Oregon and Idaho are also in various stages of discussion, adoption or implementation of a RPS.

What is the implication of natural gas supply on geothermal power?

The growth of electrical demand, in the Western States, has been met through the 1990s and early in this decade by the construction and commissioning of combined cycle natural gas powered generators. These facilities meet current federal emission requirements, can be constructed in a short timeframe, and if scaled in the 250 MW size and greater, they cost approximately $850,000 to $900,000 per MW of capacity. However, in comparison to geothermal and wind power, they have higher operating costs due to the purchase price of natural gas. The Energy Information Agency, in a report to Secretary Spencer Abraham, in December 2001 (entitled US Natural Gas Markets: Mid-Term Prospects For Natural Gas Supply), has determined that the reserve/life index of new gas reservoirs has fallen to 3.9 years. Additionally, in order to maintain deliverability at current levels, the rate of well drilling must be maintained. Accordingly, the wellhead price of natural gas must be high enough to generate new activity. Since mid-2000, wellhead prices have varied from $1.80 per MCF to over $9.00 per MCF. One-megawatt hour (MWhr) requires approximately 5.5 MCF of natural gas. The cost to deliver gas from the wellhead, depending upon your location in the USA, varies between $1.50 and $3.00 per MCF. Therefore delivered prices in the $5.00 to $6.00 range are not unusual. At $6.00 per MCF, the feedstock price is 3.3 cents per Kwh upon which you must add operating costs and recovery of capital. During the winter of 2001, delivered gas prices achieved $12.00 per MCF in California and the Pacific Northwest. Whereas well drilling activity for 2002 is 60% to 65% of 2001 activity, history is likely to be repeated. Geothermal energy has no feedstock cost.

Please provide the history of the Raft River Geothermal Project.

During the Carter Administration of the late 1970s, the DOE was given a mandate to develop new non-petroleum sources of domestic energy. Raft River, Idaho was identified as a location for research because as early as the late 19th century local ranchers had discovered hot geothermal water while drilling irrigation wells. Additionally, the location is approximately 50 miles from the DOE's Idaho National Energy Laboratory, which administered the project.

Identify what the DOE accomplished at Raft River.

The DOE from 1975 through 1983 expended over $40 million. In addition to drilling 5 producing wells, 2 injectors and a number of monitoring well they also developed the world's first binary power plant with a 7 MW capacity. The binary cycle technology was a major breakthrough since it proved that electricity could be generated from moderate temperature (100ºC to 300ºC) geothermal reservoirs. They also built a fish farm and a hothouse for growing orchids.

Why has there never been commercial electricity production at Raft River?

Under US law the DOE cannot compete with private industry. When Raft River was closed down in 1983 the Pacific Northwest had a surplus of the lowest cost electricity. This situation was due to the availability of excess capacity in the BPA system and coal-fired expansion initiated in the 1970s by regional utilities including Utah Power, Idaho Power, Avista and Pacific Power. Accordingly, none of these utilities were interested in taking over the project. The site was "mothballed" and was later sold by the DOE in 1984.

What is the potential of Raft River?

The BPA ranks Raft River as the Number 1 geothermal location in the Northwest based on temperature of the reservoir. The US Geological Survey estimates that the field has the potential to deliver 100 to 200 MW. This opportunity would require the drilling of a number of new production wells. GeothermEx Inc. believes that, subject to the completion of their reservoir appraisal, the 5 existing production wells can deliver between 20 and 22 MW(gross), which translates to between 14 and 17 MW(net) base load production.

Please explain the difference between gross and base load (net power) production.

Binary power plants have a very high utilization rate. The US industry average over 98% operating efficiency. The binary fluid, isobutene, must be cooled down before it is recycled for vaporization in order to run the turbines. When the atmospheric temperature is high, power is used to run large fans in order to move the ambient heat from the binary fluid. Therefore the amount of deliverable electricity on a hot August day can be as much as 30% to 35% lower than in mid-February. Additionally, the well pumps and other mechanical systems in the plant consume electricity. New technology, referred as the Kalina cycle, has been developed to significantly reduce this differential.

How does Geothermal compare with WindPower?

WindPower has been the most successful source of Green Power to date, with 4,261 MW of capacity. The reasons include a very successful political lobby, the existence of a federal Production Tax Credit, and that wind generation can be installed in all 50 states. (The credit will be available to Geothermal retroactive to January 1, 2002 upon the Senate/ House Conference on the Energy Bill is completed).

Geothermal, because of its high efficiency, is more competitive in the long-term.

Could you elaborate on Question, How does Geothermal compare with WindPower?

According to statistics maintained by the National Wind Coordinating Committee (NWCC), the average cost of new installed wind generation is $1 million per MW. The operating efficiency is 28%, per the NWCC, simply because atmospheric conditions aren't always favourable. Annual average production is 2,453 MW hours per MW of capacity. The average capital cost component of one-kilowatt hour of windpower is 2.04 cents after 20 cumulative years of production. The cost falls to 1.63 cents after 25 years and 1.36 cents after 30 years.

Geothermal varies between $1.7 million and $2.1 million depending on plant scale. Based on an operating efficiency of 97%, annual production is 8,497 MW hours per MW of capacity. Assuming $1.9 million per MW, the average capital cost component of one-kilowatt hour of geothermal is 1.12 cents after 20 cumulative years of production. The cost falls to 0.89 cents after 25 years and 0.75 cents after 30 years. Operating costs for both sources of electricity is almost identical and average 1 cent per kilowatt-hour.

Are there any other considerations when comparing the two alternatives?

Yes, the ambient heat given off from a geothermal facility can be used as a heat source for hothouses, aquaculture or central heating. A second consideration is that as explained in Question #18, geothermal plants, at certain times in the year will produce electricity significantly higher than the base load. This additional electrical generation has not been incorporated in the analysis as provided in the answer to Question #19 nor have any sales of ambient heat.

Do any other publicly traded geothermal corporations exist?

Yes, there are two that are listed on Toronto Stock Exchange. Continental Ridge Resources Inc (symbol: KRI) has drilled one test hole on the Blue Mountain project in northern Nevada. Whereas, they have encountered a heat source, it will require a ten well program to determine there if there is a commercial reservoir. USGEO, at Raft River, already has an established reservoir with production and injection wells in place.

North Pacific GeoPower Corp. (symbol: NPP), has the Meager Creek property in west-central British Columbia. Meager Creek is an advanced project with several test holes, but is located in a mountainous area where access is difficult and the site is over 70 miles from the BC Hydro power grid. The permitting and capital cost for an interconnecting power transmission line will be substantial. USGEO has a 138 KVA power transmission line linked to the Idaho Power and BPA electrical grid that crosses the Raft River property.