Where Does the Small Scale Geothermal Power Plant Fit In the Grand Scheme of Things?

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1 Where Does the Small Scale Geothermal Power Plant Fit In the Grand Scheme of Things? Roger Hill Sandia National Laboratories Sandia is a multiprogram laboratory operated by Sandia Corporation, a Lockheed Martin Company, for the United States Department of Energy s National Nuclear Security Administration under contract DE-AC04-94AL85000.

2 Utility Systems Oil and Gas Gas Transmission Load Substation Wind Distribution Generator Coal Geothermal in utility portfolio or at the load

3 Geologic Assurance and Economic Feasibility National R&D helps to expand the geothermal resource base: Geophysics and geoscience to locate and define reservoirs Drilling research to reduce costs Improving capabilities and efficiencies of power plants. Decreasing quality of resource Decreasing information about resource Proven Reserves Probable Sub-Economic Resources Undiscovered Resources Undiscovered Resources Possible Sub-Economic Resources The McKelvey Diagram

4 Western Region Generating Cost-Risk Trends Western US Accelerated Geo $70 New Geo EIA Mix has higher cost and risk relative to 2003 Move to larger gas/coal shares adds to portfolio cost and risk, volatility Reduces Energy Diversity/ Security Geothermal and wind are ideally positioned to diversify the generating mix and reduce cost/risk Portfolio Cost ($/MWh) $60 $50 $40 $30 $20 $10 Sandia_2013_Accel_geo Old hydro Old Wind New Wind Old coal Old nuclear EIA Mix 2003 Old geothermal New Geo 3 EIA Mix 2013 New Geo 2 New Geo 1 New Nuclear New Coal New hydro Old Gas New gas Risk (standard deviation)

5 US Natural Gas Prod. Will Grow 13% Imports Will Grow 157% TCF Production LNG Imports Other Imports Source: DOE/EIA AEO2005

6 EIA has consistently underestimated gas prices 5 Wellhead Natural Gas Prices (2002$/Mcf) AEO 1997 AEO 1998 AEO 1999 AEO 2000 AEO 2001 AEO 2002 AEO 2003 AEO 2004 Source: Union of Concerned Scientists

7 Expected Trends in Future Energy System Evolution Energy safety, security, reliability, and sustainability have become important energy system design parameters This will change how energy systems are optimized and upgraded Sustainability Cost Effectiveness Case A Case B Security 0 This will impact future decisions on energy policy, supply, and use How do we efficiently and costeffectively transition to this new future infrastructure? Environmental Attractiveness Reliability

8 Source: Renewable Energy Atlas Electricity Generation

9 Policy Goals Projected Renewables to Meet Policy Goals The primary role of PIER Renewables is to help the State meet aggressive renewable energy policy goals by investing in high priority RD&D issues. Projected Renewables to Meet California Policy Goals 100 Total: 29,000 GWh (~11% Renewables) Target: 54,000 GWh (20% RPS) Target: 98,000 GWh (33% RPS w/ 3 GW Solar and 1.5 GW Biomass) Renewable Energy Generated Statewide ('000 GWh) Gap Small Hydro/Ocean Solar PV SolarCSP Biomass Geo Wind Gap Gap Data Sources: 2004, CEC Electricity Report which includes all renewables in the State, not just IOUs; 2010 and 2020, PIER Renewables Projections. Source: CEC

10 Fully Diversified Renewable Energy Portfolio New Mexico Proposed Rule One in which no less that 20% of RPS is met using wind, no less that 20% is met using solar, and no less than 10% is met using one of the other Renewables

11 Reasonable Cost Threshold New Mexico Proposed Rule, cont. The reasonable cost threshold for 2006 is 1% of customer s annual electrical charges, increasing by 1/5% until 2011, at which time it will be 2%, then increasing by1/% until 2015=3%

12 Geothermal Drilling Typical geothermal drilling is characterized by underpressured formations that aggravate lost circulation; hard, abrasive, fractured rock; complex geology; corrosive fluids; and, by definition, high temperature. This is clearly different than wells drilled in Oil & Gas reservoirs that are candidates for co-producing geothermal energy. There is relative low energy density of water vs. oil or gas and results in different energy produced.

13 You ve Heard of Combined Heat and Power? Geothermal offers combined: Heat Power and Pleasure! Sources: Geothermal Education Office

14 Roger Hill Sandia National Laboratories