Geothermal Redux

EarthTalk’s Ethan Goffman caught up with Karl Gawell, Executive Director of the Geothermal Energy Association, to find out more about the promise of geothermal as a carbon-busting alternative to fossil fuel derived power…

Or read the transcript below…

Earth Talk: So briefly, why is geothermal such a useful source of energy and what does it provide that other sources don’t.

gawell Geothermal ReduxKarl Gawell: First of all, geothermal energy is a natural resource, it’s not just one form of energy, so you’re looking at the heat of the Earth. And the good thing about geothermal is that the heat of the Earth is an enormous resource. I mean people can see it I think when they think of the sun, the solar energy you look outside you see the sun coming down and you realize wow! That’s a tremendous amount of energy. But they don’t realize that the Earth is hot. And the heat can be used in different ways. It can be used at shallow depths for heat pumps. It can be used at deeper depths for power in direct use and direct conversion for agricultural and industrial purposes. A wide range of applications is widely available and we’re just beginning to learn how to tap that resource.

E: Okay, great. And could you compare a little to other renewable energies like solar and wind.

K.G.: I think we do compare because we’re often the price leaders. Geothermal, wind and solar have struggled for years to see who’s going to be price leader. We see cost reductions in not just solar but we’re very competitive within. Part of the message for today is that renewables across the board are getting more competitive and that geothermal is going to be part of that mix. And I personally compare it to solar in terms of how to think about it. As I said a minute ago, you can think of solar and think of all the ways you can use it. People don’t think of the Earth as hot, but it is hot and there are various applications. You can see people who are using it to raise agricultural products outside of Boise, Idaho, or for that matter the state capital in Boise, which is heated by geothermal heat, the power in California with 5 percent of the power, where you have geothermal heat pumps in Wisconsin, New York and other areas. So we can use the heat of the Earth in different applications, different ways.  It depends on what’s economical in your region.

E: And yet we don’t hear about like we do other renewables and it doesn’t seem to be proceeding as fast. So what are the major barriers preventing a faster development of geothermal resources?

K.G.: I think fast and slow development is, in the energy business you’re at the top of the hill one day, you’re at the bottom of the hill the next so you have to look at the longer term trends. In terms of the longer term trends I think you see continued growth in geothermal particularly worldwide. The U.S. market has been slow the last couple years but the world market continues to grow. In fact, we had as many power plants put online this last year around the world as we’ve had in twenty years, in any one year in the past twenty years. So geothermal’s showing good growth worldwide. And why are we probably less known?  Well, I think it depends on where you’re at because often it’s a regional resource.  So for example you see photovoltaic cells going on homes in Maryland, Illinois, California.  Geothermal power is pretty much a western states’ resource right now because of the economics of drilling for the resource at depth. And that’s its biggest problem; its biggest problem is working with the resource. We have to find right now we produce pretty much from natural systems. The estimate is worldwide there might be 200 gigawatts of natural systems. In the U.S. we have tapped many of the prime resources and something like two thirds of the remaining resources are still hidden. According to the Geologic Survey they’re yet to be found. We don’t have the technology to reliably find geothermal resources at depth as for example you might have with oil and gas.  But around the world we’re developing high-grade resources and we’re learning. We’re developing better technology, better science.  As we move forward you’ll see the expansion of geothermal continue to grow.

E: And what about the financing side, like how are companies paying for geothermal?

K.G.: The hardest part of the financing is not the power plant or the operation, it’s the up-front cost of exploration. And the problem with geothermal is you’re going to drill some wells to prove a resource and you’re going to have some dry holes. And geothermal wells are large and expensive. You might spend five or ten million dollars on a production well, and nobody wants a five or ten million dollar dry hole. So the risk is considered significant.  In fact that’s one of the areas we’ve seen worldwide being addressed. One of the things leading to this worldwide boom in geothermal is the fact that the World Bank and others have put funds into reducing the geologic risk of geothermal energy to move down to a kind of social cost return. Instead, in the U.S. where we have very high-risk capital to get the first few wells, which ends up making the whole project expensive and frankly many projects don’t go forward.

E: And it does seem geothermal is booming more in other countries even though historically the U.S. has been a leader. Especially developing countries. So could you comment on what countries are moving forward and what the potential is?

K.G.: As I said we have something close to 100 to 200 gigawatts of geothermal conventional reservoirs. And in many countries they simply look past them. So the first barrier is the knowledge. People understand, Kenya for example is beginning to understand it has a resource in its backyard which can give not just power to those who need it but also give economic growth and jobs to the local communities as well. As they’ve learn to do that, they’ve started to develop more and more of their geothermal resources and putting that online and we’re seeing more and more of that around the world and it really is something close to eighty countries looking at geothermal development. More than half of those are emerging economy countries, where you see strong economic growth with a real need for the power that translates not just into more economic growth, but in many of these countries also means basic services for health care and basically quality of life becomes a big issue. So we’re seeing growth in Indonesia, East Africa, Mexico, Central America, and developed areas of the world where there’s strong economic growth and the need for power. And geothermal resources are there to develop, there moving forward with strong growth.

E: And of course the Western development path depended on dirty fuels that fueled climate change. China kind of followed us that way.  So perhaps you can comment on geothermal and developing countries and why that’s such a helpful trend.

K.G.: Well, it’s sort of ironic. We track the world market and every year we put out a report on where the market is.  But as we track that report we also get a sense of what’s causing that market to move forward. And I know that Ben [Matek] our industry analyst and myself, as we’ve interviewed companies around the world, realized that one of the driving forces in the developing world is the need for power. But the other is that many of these countries are signatories to the climate treaty. So they’re looking for power, but they’re also looking for clean power and that’s driving their interest in geothermal. In the United States for example I think we’re faltering. We’re still trying to show leadership in climate but it’s not really there outside of probably California and a few states laws which are moving forward. So we don’t have the policy driver that says we’re going to pay a little extra to get clean power that doesn’t endanger future civilizations.

E: So the U.S. is actually falling behind some developing countries.

K.G.: I think the commitment isn’t as strong in this country. I mean, the administration has made its case, but we have no climate law in this country which really drives policy, we’ve not signed the treaties. There still are barriers moving forward in terms of United States politics. And it’s not as clear in many of these countries where you see geothermal being developed, their signatories to the treaties, they’re moving forward and they’ve made a commitment nationally to say, we want clean power. And they’re finding out you can do it, the technologies are there, geothermal, wind, solar, renewable technologies are there and you put them together in the right mix for your country you’ve got clean power, economic power and economic growth without damaging the environment.

E: Okay, thanks very much.

K.G.: Sure, you’re welcome.

For more information, check out the website of the Geothermal Energy Association