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February 12, 2012

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Nevada gaining in development of geothermal energy

Associated Press

Saturday, Aug. 14, 2010 | 12:12 a.m.

With an installed capacity of a little more than 400 megawatts, Nevada's ability to take geothermal heat and turn it into electricity is second in the U.S. only to California.

In fact, if Nevada was a country, it would be the ninth-largest producer of geothermal energy in the world, just behind Japan, according to the Geothermal Energy Association.

Now, the Silver State is poised to significantly increase its 13 percent share of total U.S. geothermal capacity — perhaps even overtake California as the nation's top geothermal energy producer.

With 86 projects in the works that could potentially boost capacity anywhere from an extra 2,120 megawatts to 3,686 megawatts, Nevada now is No. 1 in the nation for geothermal capacity under development. By comparison, total U.S. capacity is 3,087 megawatts.

"Nevada is a state where so much has been happening," said Karl Gawell, executive director of the Washington, D.C.-based Geothermal Energy Association. "Not only is the state doing well in terms of new projects under development, but utilities in Nevada have also learned to work with geothermal. They have gained a lot of experience in the field, including how to work collaboratively with geothermal development."

California remains king in geothermal capacity, accounting for more than 2,500 megawatts of the nation's current capacity.

But Nevada is quickly gaining.

The state's potential capacity under development eclipses California's range of 1,674 megawatts to 2,000 megawatts. About 20 companies are either operating plants or have projects under development in Nevada.

In the last year alone, three plants came online _ two by Enel Green Power and one by Nevada Geothermal Power. The developers include a mix of traditional players such as Ormat Technologies and newcomers such as Magma Energy. Vancouver-based Magma, which owns two of the 20 active geothermal plants in Nevada, currently has 15 new projects under development.

Nevada's ability to attract geothermal companies is not just about its bountiful geothermal resources, said Alison Thompson, vice president of corporate relations for Magma Energy. The company has U.S. operations based in Reno.

"Nevada is a very sophisticated state when it comes to geothermal," Thompson said. "Most people there are aware of geothermal. You also have a labor force that's very well-trained and well-informed about geothermal. And unlike some other states, Nevada has done a good job of offering up land for lease through the (Bureau of Land Management), which allows more players to get in the game."

In contrast, stricter regulations combined with infrastructure challenges are slowing down California's momentum for geothermal development.

"California has a lot of untapped resources, but it's very difficult to develop anything there," Gawell said. "California also has transmission problems that are far greater than what Nevada is looking at. In some cases, you can't even get power from California to California. You've got excess reserves in Southern California that you can't even get to L.A. right now because the power system is so congested over there."

Despite Nevada's geothermal boom, the state is not exempt from the industry's challenges.

"Even though geothermal has been around for over a hundred years, it's still in its infancy as far as the technology for development," Thompson said. "Seeing underground and finding the best places to drill is still an imperfect science. It's not like the oil and gas industry."

The difficulty of identifying ideal areas to drill is the reason why estimates for potential geothermal capacity vary wildly. Not all of the 86 sites under development in Nevada will likely pan out.

"Drilling is expensive, and it isn't always successful," said Tom Fares, vice president of renewable energy for NV Energy. "Even when you know the resource is there, identifying the precise location to drill and the actual capacity is a challenge."

Another challenge for developers is that some cash-strapped rural counties want to enact permit regulations to tap geothermal development as a funding resource, said Tom Clark, a renewable energy lobbyist.

Churchill County, for example, is proposing a special-use permit for each exploratory well a developer wants to dig. Clark said such a requirement would add to the cost of geothermal development.

Striking geothermal pay dirt at a site means having access to a resource that can produce decades worth of energy, Fares said.

The growth of the state's geothermal industry especially benefits northern Nevada, which accounts for the bulk of geothermal capacity in the Silver State. Ormat, a leading geothermal company, has its global headquarters in Reno.

In July, the Geothermal Energy Association held an event in Las Vegas so investor-owned utilities, power cooperatives and public power authorities across the country could learn from Nevada's experience with geothermal. Fares said that kind of event helps raise Nevada's profile in the industry.

"When you have geothermal companies moving here, they tend to put a lot of their intellectual capital at work here in Nevada as well," Fares said. "That creates a critical mass of talent that will be an asset for an industry over time and feeds future growth."

NV Energy plans to build new north-south transmission line from Ely to the Las Vegas area by January 2013.

The new line is expected to provide better access to northern Nevada geothermal energy and southern Nevada solar energy.

The line also increases Nevada's transmission capacity and gives the north better access to the regional grid, making it easier to sell geothermal power.

Clark said that as solar and wind gain more steam, geothermal should emerge as a dependable part of a diverse green energy portfolio.

"Geothermal is the Nordstrom of renewable energy," Clark said. "If you build it, then you'll have small renewable projects coming in to take advantage of the new transmissions developed for geothermal.

"If we do things right, build the infrastructure and attract all these companies, then we can be the Silicon Valley of renewable energy," he said.

Information from: Reno Gazette-Journal, http://www.rgj.com

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