[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
DEVELOPING UNTAPPED POTENTIAL:
GEOTHERMAL AND OCEAN POWER
TECHNOLOGIES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND
ENVIRONMENT
COMMITTEE ON SCIENCE AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
MAY 17, 2007
__________
Serial No. 110-32
__________
Printed for the use of the Committee on Science and Technology
Available via the World Wide Web: http://www.science.house.gov
______
U.S. GOVERNMENT PRINTING OFFICE
35-236 PDF WASHINGTON DC: 2008
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COMMITTEE ON SCIENCE AND TECHNOLOGY
HON. BART GORDON, Tennessee, Chairman
JERRY F. COSTELLO, Illinois RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas F. JAMES SENSENBRENNER JR.,
LYNN C. WOOLSEY, California Wisconsin
MARK UDALL, Colorado LAMAR S. SMITH, Texas
DAVID WU, Oregon DANA ROHRABACHER, California
BRIAN BAIRD, Washington KEN CALVERT, California
BRAD MILLER, North Carolina ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois VERNON J. EHLERS, Michigan
NICK LAMPSON, Texas FRANK D. LUCAS, Oklahoma
GABRIELLE GIFFORDS, Arizona JUDY BIGGERT, Illinois
JERRY MCNERNEY, California W. TODD AKIN, Missouri
PAUL KANJORSKI, Pennsylvania JO BONNER, Alabama
DARLENE HOOLEY, Oregon TOM FEENEY, Florida
STEVEN R. ROTHMAN, New Jersey RANDY NEUGEBAUER, Texas
MICHAEL M. HONDA, California BOB INGLIS, South Carolina
JIM MATHESON, Utah DAVID G. REICHERT, Washington
MIKE ROSS, Arkansas MICHAEL T. MCCAUL, Texas
BEN CHANDLER, Kentucky MARIO DIAZ-BALART, Florida
RUSS CARNAHAN, Missouri PHIL GINGREY, Georgia
CHARLIE MELANCON, Louisiana BRIAN P. BILBRAY, California
BARON P. HILL, Indiana ADRIAN SMITH, Nebraska
HARRY E. MITCHELL, Arizona VACANCY
CHARLES A. WILSON, Ohio
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Subcommittee on Energy and Environment
HON. NICK LAMPSON, Texas, Chairman
JERRY F. COSTELLO, Illinois BOB INGLIS, South Carolina
LYNN C. WOOLSEY, California ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona W. TODD AKIN, Missouri
JERRY MCNERNEY, California RANDY NEUGEBAUER, Texas
MARK UDALL, Colorado MICHAEL T. MCCAUL, Texas
BRIAN BAIRD, Washington MARIO DIAZ-BALART, Florida
PAUL KANJORSKI, Pennsylvania
BART GORDON, Tennessee RALPH M. HALL, Texas
JEAN FRUCI Democratic Staff Director
CHRIS KING Democratic Professional Staff Member
MICHELLE DALLAFIOR Democratic Professional Staff Member
SHIMERE WILLIAMS Democratic Professional Staff Member
ELAINE PAULIONIS Democratic Professional Staff Member
ADAM ROSENBERG Democratic Professional Staff Member
ELIZABETH STACK Republican Professional Staff Member
STACEY STEEP Research Assistant
C O N T E N T S
May 17, 2007
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Nick Lampson, Chairman, Subcommittee
on Energy and Environment, Committee on Science and Technology,
U.S. House of Representatives.................................. 11
Written Statement............................................ 11
Statement by Representative Bob Inglis, Ranking Minority Member,
Subcommittee on Energy and Environment, Committee on Science
and Technology, U.S. House of Representatives.................. 12
Written Statement............................................ 13
Prepared Statement by Representative Jerry F. Costello, Member,
Subcommittee on Energy and Environment, Committee on Science
and Technology, U.S. House of Representatives.................. 13
Statement by Representative Jerry McNerney, Member, Subcommittee
on Energy and Environment, Committee on Science and Technology,
U.S. House of Representatives.................................. 12
Witnesses:
Dr. Jefferson Tester, Meissner Professor of Chemical Engineering,
Massachusetts Institute of Technology
Oral Statement............................................... 14
Written Statement............................................ 16
Mr. Paul A. Thomsen, Public Policy Manager, ORMAT Technologies,
Inc.
Oral Statement............................................... 29
Written Statement............................................ 30
Dr. Annette von Jouanne, Professor of Power Electronics and
Energy Systems, Oregon State University
Oral Statement............................................... 38
Written Statement............................................ 39
PowerPoint Presentation...................................... 43
Biography.................................................... 57
Mr. Sean O'Neill, President, Ocean Renewable Energy Coalition
Oral Statement............................................... 57
Written Statement............................................ 58
Biography.................................................... 64
Mr. Nathanael Greene, Senior Policy Analyst, Natural Resources
Defense Council
Oral Statement............................................... 64
Written Statement............................................ 66
Biography.................................................... 72
Discussion
Past Funding Cuts to Geothermal Energy Research................ 72
Geo-pressured Resources........................................ 73
U.S. Army Corps of Engineers and Ocean Power Technologies...... 73
H.R. 2313 Recommendations...................................... 74
Geothermal Generating Capacity................................. 74
Locations for Geothermal Energy Production..................... 75
Geothermal Technology Readiness................................ 75
Geothermal Generating Capacity................................. 76
Geothermal's Impact on the Economy............................. 77
Not in My BackYard (NIMBY) and Cost Concerns for Renewables.... 78
Wave Energy Technology Readiness............................... 80
Solar Augmented Geothermal Energy (SAGE)....................... 81
Geothermal Energy Transportation............................... 82
Geothermal Production Tax Credit............................... 83
Geothermal Resource Assessment................................. 83
Environmental Benefits From Geothermal......................... 84
Appendix 1: Answers to Post-Hearing Questions
Dr. Jefferson Tester, Meissner Professor of Chemical Engineering,
Massachusetts Institute of Technology.......................... 86
Mr. Paul A. Thomsen, Public Policy Manager, ORMAT Technologies,
Inc............................................................ 88
Appendix 2: Additional Material for the Record
H.R. 2304, the Advanced Geothermal Energy Research and
Development Act of 2007........................................ 96
Section-by-Section Analysis of H.R. 2304......................... 110
H.R. 2313, the Marine Renewable Energy Research and Development
Act of 2007.................................................... 112
Section-by-Section Analysis of H.R. 2313......................... 118
Statement of UTC Power........................................... 119
DEVELOPING UNTAPPED POTENTIAL: GEOTHERMAL AND OCEAN POWER TECHNOLOGIES
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THURSDAY, MAY 17, 2007
House of Representatives,
Subcommittee on Energy and Environment,
Committee on Science and Technology,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:05 a.m., in
Room 2325 of the Rayburn House Office Building, Hon. Nick
Lampson [Chairman of the Subcommittee] presiding.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
hearing charter
SUBCOMMITTEE ON ENERGY AND ENVIRONMENT
COMMITTEE ON SCIENCE AND TECHNOLOGY
U.S. HOUSE OF REPRESENTATIVES
Developing Untapped Potential
Geothermal and Ocean Power
Technologies
thursday, may 17, 2007
10:00 a.m.-12:00 p.m.
2325 rayburn house office building
Purpose
On Thursday, May 17, at 10:00 a.m., the Energy & Environment
Subcommittee of the House Committee on Science and Technology will hold
a legislative hearing on two renewable energy bills.
H.R. 2304, introduced by Mr. McNerney of California, directs the
Secretary of Energy to support research, development, demonstration,
and commercial application of advanced technologies to locate and
characterize geothermal resources and produce geothermal energy. The
bill is co-sponsored by Mr. Gordon of Tennessee and Mr. Lampson of
Texas.
H.R. 2313, introduced by Ms. Hooley of Oregon, directs the
Secretary of Energy to support research, development, demonstration,
and commercial application of technologies to produce electric power
from renewable marine resources, including: waves, tidal flows, ocean
currents, and thermal gradients.
Witnesses
Dr. Jefferson Tester is the H.P. Meissner Professor of
Chemical Engineering at the Massachusetts Institute of Technology. Dr.
Tester is an internationally recognized expert in Enhanced Geothermal
Systems and he served as chair of the MIT-led panel that produced the
report: The Future of Geothermal Energy, released in January, 2007.
Mr. Paul Thomsen is Public Policy Manager for ORMAT
Technologies, Inc., a leading provider of geothermal exploration,
development, and power conversion technologies. Mr. Thomsen is
responsible for ORMAT's federal, State and local legislative programs.
He is testifying today on behalf of both ORMAT and the Geothermal
Energy Association.
Dr. Annette von Jouannne is a Professor in the School of
Electrical Engineering and Computer Science at Oregon State University
in Corvallis, Oregon. She specializes in Energy Systems, including
power electronics and power systems, and she leads the Wave Energy
program at OSU.
Mr. Sean O'Neill is President of the Ocean Renewable Energy
Coalition (OREC), a trade association representing the marine renewable
energy industry.
Mr. Nathanael Greene is a Sr. Energy Policy Specialist with
the Natural Resources Defense Council. His areas of expertise include
utility regulation, renewable energy, energy taxes and energy
efficiency.
Overarching Questions
The hearing will address the following overarching questions:
Geothermal
1. What is the current state of development of geothermal
energy technologies? Are they mature? If not, what major
research, development, and demonstration work remains to be
done to increase their commercial viability?
2. What new opportunities might be created by the development
of Enhanced Geothermal Systems?
3. What are the largest obstacles to the widespread
commercial development of geothermal energy? How can these
hurdles be addressed?
4. What is the appropriate role for the Federal Government in
supporting RD&D in marine renewable energy technologies?
5. Are there environmental concerns associated with
geothermal energy development? What are they? Can they be
mitigated?
6. Does the bill under consideration--the Advanced Geothermal
Energy Research and Development Act of 2007--address the most
significant RD&D barriers to the widespread development of
geothermal energy? How can the bill be improved?
Ocean Power
7. What is the state of development of marine power
technologies? Are they mature? Does this assessment vary by
resource (i.e., waves vs. tidal vs. currents vs. thermal)? If
these technologies are not mature, what major research,
development, and demonstration work remains to be done to make
marine renewable energy technologies commercially viable?
8. What are the largest obstacles to the widespread
commercial development of marine renewable energy? How can
these hurdles be addressed?
9. What is the appropriate role for the Federal Government in
supporting RD&D in marine renewable energy technologies?
10. Are there environmental concerns associated with marine
renewable energy development? What are they? Can they be
mitigated?
11. Does the bill under consideration--the Marine Renewable
Energy Research and Development Act of 2007--address the most
significant RD&D barriers to the widespread development of
marine power technologies?
Overview of Geothermal Energy
Hydrothermal Systems
Geothermal energy is heat from the Earth's core that is trapped in
the Earth's crust. In locations where high temperatures coincide with
naturally-occurring, underground, fluid-filled reservoirs, the
resulting hot water or steam can be tapped and used either to generate
electricity or for direct use (e.g., heating buildings, greenhouses, or
aquaculture operations). Such locations are referred to as hydrothermal
(hot water) resources, and they have been the focus of traditional
geothermal energy development.
By tapping hydrothermal resources, the United States has become the
world's largest producer of electric power from geothermal energy.
About 2,800 megawatts (MW) of geothermal electrical generating capacity
is connected to the grid in the United States; 8,000 MW of geothermal
generating capacity is installed worldwide. Geothermal energy is
currently the third largest source of renewably-generated grid power in
the United States, behind hydropower and biomass. In 2003, it accounted
for seven percent of U.S. electricity generated from renewable sources.
The largest geothermal development in the world is at The Geysers in
Northern California. This series of plants, which started to come
online in 1960, has a cumulative capacity of over 850 MW and satisfies
nearly 70 percent of the average electrical demand for the California
North Coast region.
Although the United States is the world leader in hydrothermal
development, significant potential remains untapped. The U.S.
Geological Survey (USGS) has estimated there to be 22,000 MW of
hydrothermal resources sufficient for electrical power generation in
the United States. However, many of these resources remain hidden and
unconfirmed. H.R. 2304 contains provisions to support research and
development of advanced technologies to assist in locating and
characterizing hidden hydrothermal resources, and to encourage
demonstration of advanced exploration technologies by the geothermal
industry.
Enhanced (or Engineered) Geothermal Systems (EGS)
Enhanced Geothermal Systems (EGS) differ from hydrothermal systems
in that they lack either a natural reservoir (i.e., the cracks and
spaces in the rock through which fluid can circulate), the fluid to
circulate through the reservoir, or both. In EGS development, sometimes
referred to as ``heat mining,'' an injection well is drilled to a depth
where temperatures are sufficiently high; if necessary, a reservoir is
created, or ``cracked,'' in the rock by using one of various methods of
applying pressure; and a fluid is introduced to circulate through the
reservoir and absorb the heat. The fluid is extracted through a
production well, the heat is extracted to run a geothermal power plant
or for some direct use application, and the fluid is re-injected to
start the loop all over again.
Although it has been the subject of preliminary investigations in
the United States, Europe, and Australia, the EGS concept has yet to be
demonstrated as commercially viable. However, experts familiar with the
resource and the associated technologies believe the technical and
economic hurdles are surmountable. In January, 2007, a panel led by the
Massachusetts Institute of Technology produced a report entitled The
Future of Geothermal Energy, which contained an updated assessment of
EGS potential in the United States. The authors of the report estimated
the Nation's total EGS resource base to be ``greater than 13 million
quads or 130,000 times the current annual consumption of primary energy
in the United States.'' \1\ After accounting for the fact that the
actual amount of recoverable energy will be much lower, due to
technical and economic constraints, the authors conservatively estimate
that two percent of the EGS resource could be economically
recoverable--an amount that is still more than 2,000 times larger than
all the primary energy consumed in the United States in 2005.\2\ In
other words, if the technological hurdles to EGS development can be
overcome, the potential of the resource is enormous. H.R. 2304 contains
provisions to support research and development of advanced technologies
to advance the commercial viability of EGS development, and to
encourage demonstration of reservoir engineering and stimulation
technologies by the geothermal industry.
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\1\ The Future of Geothermal Energy, Massachusetts Institute of
Technology, 2006; pp. 1-15.
\2\ Ibid, pp. 1-17.
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Applications of Geothermal Energy
Electric power: Geothermal power plants pump hot fluid
(usually water or brine) from the Earth and either use it to power a
turbine directly, or run it through a heat exchanger to boil a
secondary fluid into a gas, which then powers a turbine, to create
electricity.
Direct use applications: Geothermal water of at least
70+F can be used directly for heating homes or offices,
growing plants in greenhouses, heating water for fish farming, and for
other industrial uses. Some cities (e.g., Boise, Idaho) pipe geothermal
hot water under roads and sidewalks to keep them clear of snow and ice.
District heating applications use networks of piped hot water to heat
buildings throughout a community.
Benefits of Geothermal Energy
Base load power: Unlike most renewable energy sources,
electric power from geothermal energy is available at a constant level,
24 hours a day. Because of this lack of intermittency, geothermal power
may provide baseload power production.
Pollution prevention: A geothermal steam plant emits almost
50 times less carbon dioxide (CO2) than the average U.S.
coal power plant per kilowatt of electricity produced.\3\ Every year,
geothermal electricity plants prevent 4.1 million tons of CO2
emissions that coal-powered plants would have generated. A geothermal
plant's cooling towers emit mostly water vapor, and emit no
particulates, hydrogen sulfide, or nitrogen oxides. Plants that employ
binary conversion technology emit only water vapor, and in very small
amounts.
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\3\ According to the National Renewable Energy Lab, http://
www.nrel.gov/geothermal/geoelectricity.html
Jobs and security: Geothermal energy can be produced
domestically, thereby providing jobs for Americans and reducing
security concerns associated with dependence on foreign sources of oil
and natural gas. The large size of the resource, both in the United
States and overseas, creates significant market opportunities for
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geothermal technology companies.
Cost
Electricity from The Geysers sells for a wholesale price of $0.03
to $0.035 per kilowatt-hour (kWh), while electricity from newer
geothermal plants (using lower temperature resources) costs between
$0.05 and $0.08 wholesale per kWh. Wholesale prices for electricity
produced from EGS reservoirs is likely to be higher in the initial
stages of developing the technology, but projections by the MIT panel
that produced The Future of Geothermal Energy anticipate that it would
fall to a comparable level (i.e., $0.05 to $0.08 per kWh) by the time a
100 MW of cumulative capacity have been developed in the United States,
which amounts to bringing only a few EGS projects online.\4\
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\4\ The Future of Geothermal Energy, Massachusetts Institute of
Technology, 2006; pp. 1-30.
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Direct use of geothermal resources is cost-competitive in many
applications. For example, according to DOE, commercial greenhouses
heated with geothermal resources, instead of traditional energy
sources, average an 80 percent savings on fuel costs--about five to
eight percent of average total operating costs.
Issues
Subsidence and production declines: At some geothermal power
plants, energy production may gradually decline over time, through a
loss of water/steam or declining water temperatures. If water or steam
is removed from an underground reservoir, the land above the reservoir
may slowly start to sink. Municipalities can inject their treated
wastewater into the underground reservoir to replenish the hot water
supply and avoid land subsidence. Newer geothermal plants tend to
employ binary conversion technology, which re-injects the geofluid into
the ground after extracting the heat, thereby replenishing the
reservoir. Since almost no fluid is lost in these systems, reservoir
depletion and subsidence are less significant concerns.
Induced seismicity: Good hydrothermal resources usually
coincide with areas of volcanic activity and so are almost always
seismically active to begin with, and developing a geothermal resource
can cause additional earthquakes. These induced quakes are usually
small and imperceptible by humans, registering only two to three on the
Richter scale. The process of developing EGS resources may also induce
some seismic activity through the act of cracking the rock to create an
underground reservoir. Experience to date suggests that the induced
quakes from EGS development are also quite small, but this is an area
that warrants further study. H.R. 2304 calls for the Secretary of
Energy to study induced seismicity as a consequence of EGS development.
Water use: Geothermal projects require access to water
throughout development and operation. Water is used during well
drilling, reservoir stimulation, and circulation. Cooling water is also
used in most plants for condensing the hot working fluid after it has
powered the turbine. In locations where water resources are in high
demand, as in the western U.S., water use for geothermal projects
requires careful management and conservation. Steps must also be taken
to ensure that geothermal development does not contaminate groundwater
and that noxious geofluids that are produced from deep wells are not
disposed of on the surface.
Geothermal Energy Programs at DOE
The United States has been involved in geothermal energy R&D since
the 1970s. The program reached a high point in FY 1980 with funding of
approximately $150 million (1980 dollars). Since then, funding has
gradually declined to its present level of $5 million (2007 dollars) in
FY 2007.
Historically, many important technological advances have emerged
from DOE-supported work at the national labs and U.S. universities. The
current geothermal program has allocated its FY 2007 budget of $5
million to support work on two EGS development projects, assess the
potential of using hot water co-produced with oil and gas drilling to
produce electricity, and to close down remaining program operations and
establish an historical archive of the program.
In the Energy Policy Act of 2005, Section 931(a)(2)(C) included a
broad authorization for research, development, demonstration, and
commercial application programs for geothermal energy, with a focus on
``developing improved technologies for reducing the costs of geothermal
energy installations, including technologies for (i) improving
detection of geothermal resources; (ii) decreasing drilling costs;
(iii) decreasing maintenance costs through improved materials; (iv)
increasing the potential for other revenue sources, such as mineral
production; and (v) increasing the understanding of reservoir life
cycle and management.''
While broad-ranging, the EPACT authorization lacks specific
provisions for cost-shared programs with industry partners (which have
led to many advances in geothermal technology in the past and
facilitated adoption of those advances by the private sector) and it
makes no specific mention of developing Enhanced Geothermal Systems
(EGS), an area of significant potential. Also, the authorization
expires after FY 2009. Despite the authorization in EPACT '05, the
Administration requested zero dollars for geothermal programs at DOE
for FY 2007 and FY 2008 and is currently making plans to shut down the
geothermal program.
As justification for terminating the geothermal program, the
Administration has claimed that geothermal technologies are mature--a
claim disputed by geothermal researchers and the industry. Recent
indications suggest DOE officials may be open to reexamining investment
in geothermal R&D, particularly in light of the opportunities in
Enhanced Geothermal Systems that were highlighted in the recent MIT
report: The Future of Geothermal Energy.
Overview of Marine Renewable Energy
Marine Renewable Energy refers to energy that can be extracted from
ocean water. (In some contexts the term may also encompass offshore
wind developments, but that is beyond the scope of H.R. 2313 and this
hearing.) For purposes of H.R. 2313, the marine renewable energy refers
to energy derived from ocean waves, tidal flows, ocean currents, or
ocean thermal gradients. Each is these is described in greater detail
below.
Moving water contains a much higher energy concentration, measured
in watts per meter (for waves) or watts per square meter (for tides and
currents), than other renewable resources, such as wind and solar. This
creates an opportunity to extract comparable amounts of energy with a
smaller apparatus. The challenge lies in developing technologies to
effectively and efficiently harness the energy contained in ocean
movement or thermal gradients and use it to generate electric power, or
for other purposes.
Their potential debated for many years, marine renewable energy
technologies appear to be on the verge of a technological breakthrough.
Prototypes or small demonstration installations have recently been
hooked into the power grid in Australia, Portugal, the United Kingdom,
and the United States. H.R. 2313 would support technology research and
development to ensure that U.S. companies are competitive in this
emerging global market, and that emerging technologies are developed in
an environmentally sensitive way.
Waves: Ocean waves are really a super concentrated form of
solar energy. The sun makes the wind blow, and the wind blowing across
the ocean surface creates waves. Waves may travel unimpeded through the
ocean for thousands of miles, accruing significant amounts of
mechanical energy. Wave power devices extract energy directly from
surface waves or from pressure fluctuations below the surface.
According to a study by the Electric Power Research Institute
(EPRI),\5\ the total annual wave energy resource in the United States
is approximately 2,300 TWh per year (2,300 terawatt hours = 2,300
billion kilowatt hours). If we were to harness 24 percent of that
resource, at 50 percent efficiency, it would generate an amount of
electricity roughly comparable to all of our current output from
hydroelectric sources ( 270 TWh per year, or approximately seven
percent of current U.S. electricity generation\6\ ).
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\5\ EPRI Offshore Wave Power Feasibility Demonstration Project,
Final Report; http://www.epri.com/oceanenergy/attachments/wave/reports/
009-Final-Report-RB-Rev-
2-092205.pdf
\6\ Energy Information Administration, http://www.eia.doe.gov/
fuelelectric.html
Wave-power rich areas of the world include the western coasts of
Scotland, northern Canada, southern Africa, Australia, and the
northeastern and northwestern coasts of the United States. In the
Pacific Northwest alone, DOE estimates that wave energy could produce
40-70 kilowatts (kW) per meter (3.3 feet) of western coastline.\7\
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\7\ http://www.eere.energy.gov/consumer/
renewable-energy/ocean/index.cfm/mytopic=50009
Wave energy can be converted into electricity through either
offshore and onshore systems. Offshore systems are situated in deep
water, typically between 40 and 70 meters (131 and 230 feet). Most
offshore systems take the form either of a single point absorber, which
is a vertical buoy design, similar in appearance to a navigation buoy,
or an attenuator, which is a long, segmented tube that generates energy
as waves flow along its length, flexing the adjacent segments against
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one another and powering hydraulic pumps inside.
Onshore wave energy systems are situated on the shoreline and
exposed to oncoming waves. Oscillating water column designs enclose a
column of air above a column of water. As waves enter the air column,
they cause the water column to rise and fall, alternately compressing
and depressurizing the air column, which powers a turbine. The tapchan,
or tapered channel system, consists of a tapered channel, which feeds
into a reservoir constructed on cliffs above sea level. The narrowing
of the channel causes the waves to increase in height as they move
toward the cliff face. The waves spill over the walls of the channel
into the reservoir and the stored water is then fed through a turbine.
Pendulor devices consist of a rectangular box, which is open to the sea
at one end. A flap is hinged over the opening and the action of the
waves causes the flap to swing back and forth, powering a hydraulic
pump and a generator.
Tidal Flows: Tides are controlled primarily by the Moon, and
so can legitimately be thought of as lunar power. As the tides rise and
fall twice each day, they create tidal currents in coastal locations
with fairly narrow passages. Good examples include San Francisco's
Golden Gate, the Tacoma Narrows in Washington's Puget Sound, and
coastal areas of Alaska and Maine. Technologies of various designs may
be used to harness these flows.
Many tidal turbines look like wind turbines, and engineers of tidal
technologies have been able to draw on many of the lessons learned from
30 years of wind-turbine development. They may be arrayed underwater in
rows, anchored to the sea floor. Because the energy in moving water is
so much more concentrated than the energy in moving air, the turbines
can be much smaller than wind turbines and still generate comparable
amounts of electricity. The turbines function best where coastal
currents run at between 3.6 and 4.9 knots (four and 5.5 mph). In
currents of that speed, a 15-meter (49.2 feet) diameter tidal turbine
can generate as much energy as a 60-meter (197 feet) diameter wind
turbine. Ideal locations for tidal turbine arrays are close to shore in
water depths of 20-30 meters (65.5-98.5 feet).
Currents: Ocean currents are similar to tidal flows, but
significantly larger. As an example, the energy contained in the Gulf
Stream current in the Atlantic Ocean is equivalent to approximately 30
times the energy contained in all the rivers on Earth.
The only area in the United States where ocean currents come close
enough to land to make potential power extraction attractive at this
time is in South Florida, where the Gulf Stream swings in close to
shore. It is envisioned that undersea turbines, similar to those being
developed to harness tidal flows, might be deployed to tap into this
massive current.
Ocean Thermal Energy Conversion (OTEC): Thermal gradients are
the only marine renewable energy resource addressed in this bill that
is not based on moving water. Instead, thermal technologies use the
difference in temperature between deep and shallow waters to run a heat
engine. This temperature difference contains a vast amount of solar
energy. If extraction could be done profitably, the resource is
virtually limitless.
OTEC works best when the temperature difference between the warmer,
top layer of the ocean and the colder, deep ocean water is about
20+C (36F), conditions that exist in tropical coastal
areas. To bring the cold water to the surface, OTEC plants require a
large diameter intake pipe, which is submerged a mile or more into the
ocean's depths. Heat is extracted from warm surface water.
Applications of Marine Renewable Energy
Electric power production: The primary application of marine
energy technologies is electrical power production. Most planned
installations would consist of arrays of multiple, small generating
devices, optimally positioned to take advantage of a particular
resource (e.g., waves, tidal flows, etc.). The multiple devices would
feed their power into a centralized hub located on the sea floor,
which, in turn, would be connected to a substation on the beach, and
from there to the power grid.
Desalination: One virtue of locating a clean, renewable
energy producing device in seawater is that it is optimally positioned
to use that energy for desalination. In areas where fresh drinking
water is at a premium, marine renewables can make an important
contribution to solving that problem.
Air conditioning: Air conditioning is a possible byproduct of
some marine energy technologies. For example, spent cold seawater from
a thermal conversion plant can chill fresh water in a heat exchanger or
flow directly into a cooling system on shore. Simple systems of this
type have air conditioned buildings at the Natural Energy Laboratory in
Hawaii for several years.
Benefits of Marine Renewable Energy
Predictability: Unlike some renewable energy sources, notably
wind, marine renewable energy production can be forecast to a high
degree of certainty well in advance. Using satellite observations, wave
power can be forecast up to three days in advance. Tides can be
forecast years in advance. Ocean thermal is capable of providing a
constant, base-load supply of power. This predictability makes it
easier to integrate marine renewables into a diverse generation
portfolio.
No fuel costs: Marine renewables benefit from a free and
inexhaustible source of ``fuel,'' freeing operators and consumers from
concerns about future fuel availability and price volatility.
Pollution prevention: Like other renewable energy
technologies, marine renewables are attractive because they emit no
pollutants or greenhouse gases in the process of producing energy.
Devices are also designed to prevent any pollution to the ocean waters.
Jobs and security: Marine renewable energy technologies can
be produced domestically, thereby providing jobs for Americans and
helping to reduce security concerns associated with depending on
foreign countries for oil and natural gas. The large size of the
resource, both in the United States and overseas, creates significant
market opportunities for marine renewable energy technology companies.
Aesthetically unobjectionable: Often opposition to energy
development projects, whether onshore or off, is motivated by
complaints that they obstruct or detract from otherwise beautiful land-
or sea-scapes. In contrast to most other technologies, many marine
renewable energy technologies are submerged out of sight. Other marine
renewables have such a low profile and/or are located so far from shore
that they generate no significant opposition on aesthetic grounds.
Cost
Cost estimates are difficult for wave and tidal, which, in contrast
to offshore wind, lack operational history. For wave, costs have been
estimated as between nine and 16 cents/kWh, far more favorable than the
40 cents/kWh that offshore wind cost ``out of the box.'' For in-stream
tidal, the Electric Power Research Institute has predicted costs from
four to 12 cents/kWh, depending on the rate of water flow. Because of
tidal power's similarities to wind, it may benefit from the
advancements already made in wind turbine development and may
potentially share economies of scale with that industry.
Issues
Environmental Impact: The greatest concern with marine
renewables is the impact of power generation technologies on the marine
environment and ecosystems. Significant research remains to be done in
this area to ensure that these devices do not have significant negative
environmental impacts. Turbine technologies, to harness tides and ocean
currents, have raised particular questions. There are open questions
about the impact of tidal turbines on local fisheries and marine
mammals. This is an area requiring in-depth study. It is important that
studies look not just at the impact of individual turbines, but also
the impacts of large arrays of multiple turbines in a give location, as
such arrays are what would be necessary to generate power on a utility
scale.
For marine renewable technologies that engage in desalination, steps
must be taken to ensure that the concentrated brine produced as a
byproduct of these operations does not have a negative impact on local
marine ecosystems.
Finally, there are open questions relating to potential
environmental impacts of extracting too much energy from tidal flows or
ocean currents. In the case of tidal flows, care must be taken not to
reduce the flow by too much to avoid harm to marine ecosystems. In the
case of the Gulf Stream, the same ecological concerns apply, and in
addition, since the thermal energy carried by the Gulf Stream plays an
important role in regulating the climate in Europe, it is important to
understand whether extracting energy from this system might have
negative impacts on weather systems that depend on its steady flow.
While this possibility may be remote, it is a question that warrants
further study.
Marine navigation: Since many marine renewable energy
conversion devices float on the water, or rest on the bottom of
navigable waterways, they raise concerns about possible interference
with marine navigation. It is important that devices be well-marked,
easily visible by day and night, and appear on all current nautical
charts. Efforts should be made to make devices visible to radar as
well.
Survivability: Marine renewable energy devices spend their
entire life cycle immersed in corrosive seawater and exposed to severe
weather and sea conditions. Steps must be taken to ensure the
survivability, and reliability, of these devices in these harsh
conditions to ensure the uninterrupted supply of power.
Marine Renewable Energy Programs at DOE
The United States became involved in marine renewable energy
research in 1974 with the establishment of the Natural Energy
Laboratory of Hawaii Authority. The Laboratory became one of the
world's leading test facilities for Ocean Thermal Energy Conversion
technology, but work there was discontinued in 2000. Existing OTEC
systems have an overall efficiency of only one percent to three
percent, but there is reason to believe that subsequent technology
advances and changes in the overall electric power environment may make
a fresh look at OTEC technologies worthwhile.
In the Energy Policy Act of 2005, Section 931(a)(2)(E) included a
broad authorization for research, development, demonstration, and
commercial application programs for ``(i) ocean energy, including wave
energy.'' However, that authorization contains no further instructions
on how to structure such a program and the authorization expires after
FY 2009. Despite this authorization, DOE has not made a budget request
to support marine energy programs since EPACT '05 was passed, nor have
funds been appropriated. This is despite the fact that FERC has begun
to issue permits to companies and investors interested in developing
in-stream tidal sites, and several private companies--in Europe,
Australia, and the United States--have begun to test prototype marine
renewable energy technologies of various design.
Chairman Lampson. Good morning, ladies and gentlemen. This
hearing will come to order, and I want to welcome everyone to
our hearing today on geothermal and ocean power technologies.
We will be examining two bills: H.R. 2304, the Advanced
Geothermal Energy Research and Development Act of 2007,
introduced by our colleague from California, Representative
McNerney, and H.R. 2313, the Marine Renewable Energy Research
and Development Act of 2007, introduced by Representative
Hooley of Oregon.
Things are quite busy this morning and I want to interrupt
my comments for just a second. We are probably going to be
interrupted with votes at around 10:30. We are going to do all
that we can as quickly as we can and then come back and
complete our effort.
Each of these bills is designed to accelerate the
development of a specific renewable energy resource that has
great potential as a source of clean power generation, is vast
in size, and three, is currently receiving little support for
research and development. In other words, these bills are about
addressing overlooked opportunities in our collective efforts
to create good American jobs, diversify our energy supply,
increase our security and reduce the environmental impact of
energy production.
At this time I want to yield to Mr. McNerney, the author of
H.R. 2304, to make a brief opening statement.
[The prepared statement of Chairman Lampson follows:]
Prepared Statement of Chairman Nick Lampson
Good morning everyone and welcome to our hearing today on
geothermal and ocean power technologies. We will be examining two
bills:
H.R. 2304, the Advanced Geothermal Energy Research and Development
Act of 2007, introduced by our colleague from California, Rep.
McNerney, and H.R. 2313, the Marine Renewable Energy Research and
Development Act of 2007, introduced by Rep. Hooley of Oregon.
Each of these bills is designed to accelerate the development of a
specific renewable energy resource that: has great potential as a
source of clean power generation, is vast in size, and is currently
receiving little R&D attention or support.
In other words, these bills are about addressing overlooked
opportunities in our collective efforts to create good American jobs,
diversify our energy supply, increase our security, and reduce the
environmental impact of energy production.
For decades, the United States has tapped geothermal energy for
heating applications and to produce clean electric power. We know this
resource works. But most geothermal development has occurred in
locations where underground reservoirs of very hot water or steam--so
called hydrothermal systems--have been shallow and easily identifiable
from the surface. Unfortunately, since obvious surface manifestations
of geothermal energy do not occur in very many places, geothermal is
often thought of as a marginal resource--not one that can play a major
role in our power generation portfolio across the Nation.
This view is inaccurate. In actuality, the obvious locations barely
scratch the surface of the total geothermal potential underneath the
United States. By investing in advanced technologies for exploration
and development, we can learn how to identify hidden resources that
have no surface manifestations, and even learn to create new resources
in hot rock where no natural reservoir or fluid exists. In doing so, we
have the potential to dramatically expand our geothermal energy
reserves.
In addition to being clean, domestic, and renewable, geothermal
energy flows in an uninterrupted stream, making it great for baseload
power production. And the amount of energy stored in the Earth's crust
is enormous. A recent report by an MIT-led panel of experts estimated
that, with a comparatively modest investment in technology development,
as much as 200,000 ``quads'' of geothermal energy could become
commercially accessible--an amount equal to 2,000 times the total
energy consumed in the U.S. each year.
Marine renewable energy technologies are designed to harness the
power contained in ocean waves, flowing tides, ocean currents, and
ocean thermal gradients. The theoretical potential of these resources
has been debated for years, but now marine renewables appear poised on
the verge of a breakthrough. Countries such as Australia, the United
Kingdom, and Portugal are investing heavily in technologies to tap the
ocean's energy potential and will soon hook the first commercial
projects into their power grids.
In 2005, the Electric Power Research Institute completed a series
of preliminary studies to quantify the wave and tidal resources in U.S.
coastal waters. They found that the size of just one of these
resources--waves--is big enough to provide as much electric power as
all of the hydroelectric dams currently operating in the United
States--almost seven percent of our nation's electricity in 2005. When
other marine energy resources are added to the mix, the potential
becomes truly significant.
The title of this hearing says it all: Developing Untapped
Potential. We owe it to current and future generations to develop our
ability to tap the vast potential of geothermal and ocean energy. Doing
so will increase our security, foster competitive new American
industries, and ensure that energy production of the future is
compatible with the highest standards of environmental stewardship.
This is the purpose behind H.R. 2304 and H.R. 2313.
Mr. McNerney. I would like to thank Chairman Lampson and
Ranking Member Inglis for holding this hearing on geothermal
and ocean energy technologies, and I would like to thank
Chairman Gordon for his support of geothermal research.
I have spent over 20 years of my professional career
developing wind energy technology and there are some very
interesting parallels. We saw the technology developed from
very early stage, primitive technology to what we see today as
a very successful, cost-effective technology in the wind
industry that is now the fastest growing form of new energy
technology. Much American money was spent and invested in this
technology. Research was done here in the United States,
especially in California, my home State. But what happened
ultimately is the United States Government was very
inconsistent in its support for the development and
implementation of wind energy technology. Consequently, what
happened is that the technology went overseas. It is now being
produced in Europe and Japan, even though all the research
dollars were spent here by American industry and by American
government. The profits are now going to Europe and Japan.
So I see now a very similar situation happening with
geothermal. Geothermal is in a state now where we can move
forward and become a world leader. We can develop the
technology. We can have the technology for use at home and for
sale overseas but inconsistent or nonexistent government
support or policies will drive that industry and that business
overseas, so it behooves us to develop this new technology.
Geothermal has a vast potential. The reports that Dr. Tester
and others have produced show that it can produce 10 percent or
more of our electrical needs by 2050. So we need to embark on a
path that helps us develop this technology and keep it at home
and be the world leaders in this new emerging technology that
has such tremendous potential.
So with that, I will yield back to Mr. Lampson, to the
Chairman.
Chairman Lampson. Thank you very much, Mr. McNerney.
At this time I would like to recognize the distinguished
Ranking Member from South Carolina, Mr. Inglis, for his opening
statement.
Mr. Inglis. I thank you, Mr. Chairman, for holding this
hearing and I appreciate the work of Ms. Hooley and Mr.
McNerney on these bills and they do highlight the renewable
energy sources that can help America achieve energy security.
The solution to our energy problems will come from a
variety of sources, no doubt. We hope that they are clean,
renewable and affordable. Surely geothermal and marine-related
energy sources fit that description and I am looking forward to
hearing from our witnesses today about the research that will
make these alternatives affordable in a commercial market.
So thank you, Mr. Chairman, for holding this hearing and
thank you to our colleagues, Ms. Hooley and Mr. McNerney, for
these bills.
[The prepared statement of Mr. Inglis follows:]
Prepared Statement of Representative Bob Inglis
Thank you for holding this hearing, Mr. Chairman. I also appreciate
Mrs. Hooley's and Mr. McNerney's work to introduce these bills that
highlight two renewable energy sources that can help America achieve
energy security.
The solution to our energy problems will come from a variety of
sources, and they need to be clean, renewable, and affordable. Since
geothermal and marine-related energy sources fit that description, I'm
looking forward to hearing from our witnesses today about the research
that will make these alternatives affordable in the commercial market.
Thank you again, Mr. Chairman, and I look forward to discussing
these two bills before the Committee.
Chairman Lampson. Thank you, Mr. Inglis, Ranking Member.
I ask unanimous consent that all additional opening
statements submitted by the Subcommittee Members be included in
the record. Without objection, so ordered.
[The prepared statement of Mr. Costello follows:]
Prepared Statement of Representative Jerry F. Costello
Good morning. Thank you, Mr. Chairman, for holding today's hearing
to review two renewable energy bills regarding geothermal and marine
power technologies.
First, H.R. 2304 directs the Secretary of Energy to support
research, development, demonstration, and commercial application of
advanced technologies to locate and characterize geothermal resources
and produce geothermal energy. Geothermal energy is heat from the
Earth's core that is trapped in the Earth's crust. In underground
fluid-filled reservoirs, hot water or steam can be used either to
generate electricity or to heat buildings, greenhouses, or aquaculture
operations. The U.S. has become the world's largest producer of
electric power from geothermal energy; however, according to the U.S.
Geological Survey (USGS), a significant number of geothermal resource
locations remain hidden and unconfirmed. H.R. 2304 contains provisions
to support research and development (R&D) of advanced technologies to
assist in locating these hot water resources, and to encourage
demonstration of advanced exploration technologies by the geothermal
industry. Funding has gradually declined for geothermal energy R&D,
with only $5 million appropriated for 2007. Further, the Administration
requested no funding for the geothermal programs at the Department of
Energy (DOE) for FY08 because they believe that geothermal technologies
are mature, although that claim is disputed by geothermal researchers
and the industry. I look forward to hearing from our distinguished
witness panel on this point.
Second, H.R. 2313 directs the Secretary of Energy to support
research, development, demonstration, and commercial application of
technologies to produce electric power from renewable marine resources.
Marine renewable energy refers to energy that can be extracted from
ocean water. H.R. 2313 would support technology research and
development to ensure that U.S. companies are competitive in this
emerging global market, and that emerging technologies are developed in
an environmentally conscious way. One of the concerns with utilizing
marine renewable energy is the impact of power generation technologies
on the marine environment and ecosystems. It is my understanding that
additional research needs to be completed in this area to ensure that
these devices do not have significant negative environmental impacts.
To this end, I would like to know if there are additional environmental
concerns associated with marine renewable energy development and I look
forward to hearing the witness panel address my questions.
With that, I again thank the Chairman for calling this hearing.
Chairman Lampson. At this I would like to introduce our
distinguished panel of witnesses starting with Dr. Jefferson
Tester, who is the H.P. Meissner Professor of Chemical
Engineering at Massachusetts Institute of Technology. Dr.
Tester is an internationally recognized expert in enhanced
geothermal systems and he served as chair of the MIT-led panel
that produced the recent report, the Future of Geothermal
Energy.
Mr. Paul Thomsen is Public Policy Manager for ORMAT
Technologies Inc., a leading provider of geothermal
exploration, development and power conversion technologies. Mr.
Thomsen is responsible for ORMAT's federal, State and local
legislative programs, and he is testifying today on behalf of
both ORMAT and the Geothermal Energy Association. At this time
I would like to recognize Congresswoman Hooley for introduction
of Dr. von Jouanne.
Ms. Hooley. Welcome. Dr. Annette von Jouanne has been a
Professor in the School of Electrical Engineering and Computer
Science at Oregon State University since 1995. She received her
Ph.D. degree in electrical engineering from Texas A&M. She
specializes in energy systems including power electronics and
power systems. With a passion for renewables, Dr. von Jouanne
is leading the wave energy program at Oregon State University.
She is also the Director of Motor Systems Resource Facility,
the highest power university-based energy systems lab in the
Nation. Dr. von Jouanne has received national recognition for
her research and teaching and she is a registered professional
engineer as well as a National Academy of Engineering
``Celebrated Woman Engineer.'' Welcome to Washington, D.C., and
our committee.
Chairman Lampson. Don't you miss Texas? I am glad you are
here.
Mr. Sean O'Neill is Co-founder and President of the Ocean
Renewable Energy Coalition, OREC, a trade association formed in
April 2005 to promote and advance commercialization of marine
renewable energy in the United States. Mr. O'Neill is
responsible for all federal legislation and regulatory issues
impacting coalition members.
And Mr. Nathanael Greene, who is a Senior Energy Policy
Specialist with the Natural Resources Defense Council. His
areas of expertise include utility regulation, renewable
energy, energy taxes and energy efficiency.
We welcome all of you this morning, and you will each have
five minutes for your spoken testimony. Your written testimony
will be included in the record for the hearing. When all five
of you have completed your testimony, we will then begin with
questions. Each Member will have five minutes to question the
panel.
Dr. Tester, would you begin, please?
STATEMENT OF DR. JEFFERSON TESTER, MEISSNER PROFESSOR OF
CHEMICAL ENGINEERING, MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Dr. Tester. Mr. Chairman and Members of the Committee, I am
grateful for the opportunity to speak with you this morning on
the new bill, H.R. 2304, that deals with geothermal energy
research and development. Along with my testimony, I have
included a hard copy of the executive summary of our recently
completed assessment that you referred to. As you know, I was
honored to serve as the Chair of the panel that conducted that
assessment.
First, I am very pleased to see that the enormous potential
of geothermal energy is receiving the attention it deserves.
This committee's attention to, and leadership on, these issues
is important to the country. As a very large, well-distributed,
and clean indigenous energy resource, geothermal's widespread
deployment would have a positive impact on our national energy
security, on our environment and on our economic health.
Regrettably, in recent years geothermal has been undervalued by
many and was often ignored as a portfolio option for widespread
development in the country. If this bill is enacted and
supported with a multi-year commitment at the levels
recommended, it will completely reactivate an important
national-scale effort that will pay substantial dividends.
Investing now in geothermal R&D coupled to a program of field
demonstrations will have far-reaching effects towards ensuring
a sustainable energy future for the U.S. for the long-term.
Enactment of this bill will put us on a path to utilize our
massive geothermal resource to provide dispatchable, baseload
generating capacity, essentially with no emissions of carbon
dioxide, and using modular plants that have small environmental
footprints. These attributes make geothermal an excellent
option for the United States, complementing interruptible
renewables such as solar and wind and thus increasing the
robustness of the national portfolio.
Although conventional, high-grade hydrothermal resources
are already being used effectively in the United States, and
will continue to be developed, they are somewhat limited by
their locations and ultimate potential. Beyond these
conventional systems are Enhanced, or Engineered, Geothermal
Systems (EGS) resources with enormous potential for primary
energy recovery using heat-mining technology. EGS feasibility
today is a result of improvements in reservoir characterization
and stimulation technologies and in deep directional drilling
that have evolved in the past three decades. It is the EGS
approach that puts geothermal on the map as a potentially more
sizable energy resource for the United States.
In the past few weeks I was fortunate to be able to visit
several geothermal plants in the American West and in Iceland
to observe the positive impacts that geothermal technology is
having firsthand. For example, ORMAT's new plant in Reno,
Nevada, completely reinjects all produced geothermal fluids,
produces no carbon dioxide or other emissions, and uses no
cooling water in a region where water is a limited commodity.
In Iceland, geothermal has enabled an economic and
environmental transformation of the country in less than 60
years. Iceland's extensive geothermal network, developed by
Reykjavik Energy and other companies, now provides 100 percent
of Iceland's heating needs and 25 percent of their electric
power with hydro providing the remainder. Iceland's example of
geothermal utilization is a model that the United States should
strive to emulate. Obviously Iceland is a special place
geologically and only some regions of the United States share
those features. However, the development of EGS technology puts
geothermal within reach for a much larger portion of the United
States.
Even though the United States is currently the largest
worldwide producer of electricity from geothermal energy, the
total capacity is barely 3,000 megawatts, much smaller than our
total overall generating capacity. Fortunately, the actual
potential for geothermal is much larger. As you pointed out,
our analysis suggests that a focused national program could
enable geothermal capacity to reach 100,000 megawatts in 50
years, comparable to the current generating capacity of our
nuclear and hydropower plants. In order to achieve such levels,
a natural transition from the country's high-grade hydrothermal
systems in use today in the West to the massive EGS resources
available over a range of grades across the country would need
to occur in increasing amounts in the next ten to 15 years. The
fact that this bill addresses both short- and long-term
research, development, demonstration and deployment issues and
needs across this continuum of geothermal grades is
particularly noteworthy, and from my perspective, essential to
the success of the national program.
I have included a few additional comments on some details
of the bill in my written testimony. Thank you again for giving
me the opportunity to support this landmark legislation and
thank you for your leadership on this issue.
[The prepared statement of Dr. Tester follows:]
Prepared Statement of Jefferson Tester
The Future of Geothermal Energy
Overview:
Mr. Chairman and Members of the Committee, I am grateful for the
opportunity to speak with you this morning on the new bill H.R. 2304
covering the ``Advanced Geothermal Energy Research and Development Act
of 2007,'' which was introduced in the House of Representatives on May
14 to direct the Secretary of Energy to conduct a national program for
geothermal energy. Along with my testimony, I have included a hard copy
of the Executive Summary of our recently completed national
assessment--``The Future of Geothermal Energy.'' I was honored to be
the Chair of an expert interdisciplinary group that conducted that
assessment which was released in January.
First, I am very pleased to see that the enormous potential of
geothermal energy is receiving the attention it deserves. This
committee's attention to and leadership on these issues is important to
the country. As a very large, well-distributed, and clean, indigenous
energy resource, geothermal's widespread deployment would have a very
positive impact on our national energy security, on our environment,
and on our economic health. Regrettably, in recent years geothermal
energy has been undervalued by many and was often ignored as a
portfolio option for widespread deployment in the U.S. If this bill is
enacted and supported with a multi-year commitment at the levels
recommended, it will completely reactivate an important national-scale
effort that will pay substantial dividends. Investing now in geothermal
research and technology development coupled to a program of field
demonstrations will have far reaching effects towards insuring a
sustainable energy future for the U.S. for the long-term.
Enactment of this bill will restore U.S. leadership
internationally. It will put us on a path to utilize our massive
geothermal resource to provide dispatchable, baseload capacity
generating capacity essentially with no emissions of carbon dioxide and
using modular plants that have small environmental ``footprints.''
These attributes make geothermal a very attractive renewable deployment
option for the U.S.--complementing interruptible renewables such as
solar and wind, and thus increasing the robustness of a national
renewable portfolio.
Let me briefly describe to the committee what geothermal energy is.
Geothermal resources are usually described in terms of stored thermal
energy content of the rock and contained fluids underlying land masses
that are accessible by drilling. The United States Geological Survey
and other groups have used a maximum accessible depth of 10 km (approx.
30,000 ft.) to define the U.S. resource. Although conventional
hydrothermal resources are already being used effectively for both
electric and non-electric applications in the United States, and will
continue to be developed, they are somewhat limited by their locations
and ultimate potential. Beyond these conventional hydrothermal systems
are Enhanced Geothermal Systems or EGS resources with enormous
potential for primary energy recovery using heat-mining technology,
which is designed to extract and utilize the Earth's stored thermal
energy. EGS feasibility is a result of improvements in reservoir
characterization and stimulation technologies and in deep, directional
drilling that have evolved in the last three decades. It is this EGS
approach that puts geothermal on the map as a potentially much more
sizable energy resource for the U.S. EGS would operate as a closed
system with cool water pumped deep into hot fractured rock reservoirs
where it would be heated and then returned to the surface to be used as
an energy source to generate electricity or directly for heating
applications Aside from conventional hydrothermal and EGS, other
geothermal resources also include co-produced hot water associated with
oil and gas production, and geo-pressured resources that contain hot
fluids with dissolved methane.
In the past few weeks I was fortunate to be able to visit several
geothermal plants in the American West and in Iceland to observe the
positive impacts that geothermal technology is having firsthand. For
example, ORMAT's new plant in Reno, Nevada completely re-injects all
produced geothermal fluids, produces no carbon dioxide or other
emissions and uses no cooling water in a region where water is a
limited commodity. In Iceland, geothermal has enabled an economic and
environmental transformation of the country in less than 60 years--from
Iceland's early years as a poor society that was completely dependent
on imported fossil fuels in the 1940s to an economically rich society
in 2007 due in large part to developing a more sustainable, renewable
energy supply. Iceland's extensive geothermal network developed by
Reykjavik Energy and other companies now provides 100 percent of
Iceland's heating needs and 25 percent of their electric power with
hydro providing the remainder. They are now actively pursuing a means
to eliminate their dependence on imported transportation fuels by
substituting hydrogen produced by electricity generated from super-
critical geothermal resources. Iceland's example of geothermal
utilization is a model that the U.S. should strive to emulate.
Obviously, Iceland is a special place geologically, and only some
regions of the U.S. share those features. However, the development of
EGS technology puts geothermal within reach for a much larger portion
of the U.S.
Even though the U.S. is the largest worldwide producer of
electricity from geothermal resources with about 3000 MWe of capacity,
this is only a small fraction of our country's generating capacity,
which now exceeds 1,000,000 MWe or one TWe. Fortunately, the actual
potential for geothermal energy in the U.S. is substantially greater
than 3000 MWe as pointed out recently by the MIT-led assessment, by the
Western Governors Association and by the National Renewable Energy
Laboratory. For example, our analysis suggests that with a focused and
aggressive national RD&D program, we could enable U.S. geothermal
capacity to reach 100,000 MWe in 50 years--comparable to the current
generating capacity of our nuclear and hydropower plants. In order to
achieve such levels of geothermal capacity, a natural transition from
the country's high grade hydrothermal systems in use today to the
massive EGS resource over a range of grades would need to occur in
increasing amounts in the next 10 to 15 years.
The fact that this bill addresses both short- and long-term
research, development, demonstration, and deployment issues is
particularly noteworthy. Within the geothermal continuum there is a
range of resource types and grades from high-grade conventional
hydrothermal systems that are currently in use and being developed in
the West to lower-grade Enhanced (or Engineered) Geothermal System or
EGS resources in the East. In order to enable geothermal technology to
develop to a level where it could provide 10 percent or more of our
generating capacity by 2050 (that is >100,000 MWe), it is essential
that a national program address both short and longer term technology
components simultaneously in a comprehensive and coordinated manner.
The bill is balanced and effectively structured to support critical
program elements for both hydrothermal and EGS.
The proposed national program is appropriately ambitious with a
multi-year commitment to support both field testing and laboratory work
in conjunction with analysis, characterization technique development,
and modeling. Overall, two critical areas would be emphasized--first,
to enhance the quantitative assessment of U.S. geothermal resource on a
site-specific basis and second, to demonstrate and validate that
reservoir stimulation and drilling technologies can repeatedly and
reliably be implemented in the field to produce commercial-scale
geothermal systems. Sound geoscience and geoengineering scientific
approaches would be used that build on current methods for extraction
of oil and gas and conventional hydrothermal resources worldwide. The
proposed comprehensive research, development, and demonstration effort
will lead to both improved and new technologies capable of lowering
development risks and costs and thereby making investments in
geothermal development more attractive for the private sector.
I have included a few additional comments on some details of the
bill in my written testimony. Thank you again for giving me the
opportunity to support this important landmark legislation, and thank
you for your leadership on this issue.
Specific comments on the bill:
1. In Sec. 3. (1) Regarding the definition of EGS--As
engineered systems, it would be good to point out that
intervention is needed to address one or more of the
following--1. lack of sufficient permeability or porosity or
open fracture connectivity within the reservoir, 2.
insufficient contained water and/or steam in the reservoir,
and/or 3. lower average geothermal gradients requiring deeper
drilling.
2. In Sec. 4(b,1)Resource assessment--In order for this task
to be achieved effectively it will require proactive
coordination and engagement of the DOE and its contractors with
the USGS, MMS, BLM and other federal agencies.
3. Secs. 4 and 5 Opportunities for direct heat use and co-
generation of heat and power--Given the large improvement in
energy efficiency that occurs in direct or combined heat and
power utilization of geothermal, co-generation applications for
residential and commercial buildings should be considered for
demonstrations along with providing baseload electric power
generation.
4. Sec. 7 impact on Secs. 6(b)(1) and (2) Co-funding
requirements for EGS technology development and early EGS field
demonstrations--A 20 percent non-federal cost sharing for EGS
technologies development and a 50 percent requirement for field
demonstration plants are likely to be excessive at such an
early stage of the reactivated geothermal program. In general,
it may be difficult for universities to meet these cost sharing
levels and some may inadvertently be excluded from
participating in the R&D program.
5. Importance of international cooperation--Provisions should
be included to enable vigorous international collaboration on
EGS and hydrothermal technology where appropriate because such
collaboration leverages U.S.-based support and will facilitate
the incorporation of new scientific and technological
developments for geothermal utilization into the U.S. program.
6. Sec. 10. (6) Utilization of co-produced fluids--Although
not a conventional EGS or hydrothermal resource, co-produced
fluids provide a short-term, economically attractive
opportunity for utilizing the low grade thermal energy produced
during the production of oil and gas. Provision for their
consideration should indeed be part of a national effort, but
they seem to be misplaced in Sec. 10. as they represent
shorter-term opportunities.
7. Developing the next generation of U.S. scientists and
engineers needed to deploy.
8. Geothermal--In order to achieve the high impact goals of
geothermal deployment, it will be necessary to increase the
number of professionals working on geothermal technology in the
U.S.
This process would be enhanced by connecting the national RD&D
program to education in science and engineering at the college,
university and professional levels using internships, graduate
fellowships, and similar instruments.
Summary of a national-scale assessment of EGS resources--``The Future
of Geothermal Energy'' (portions of a previous
statement provided on April 19, 2007 to Congress)
For 15 months starting in September of 2005, a comprehensive,
independent assessment was conducted to evaluate the technical and
economic feasibility of EGS becoming a major supplier of primary energy
for U.S. base-load generation capacity by 2050. The assessment was
commissioned by the U.S. Department of Energy and carried out by an 18-
member, international panel assembled by the Massachusetts Institute of
Technology (MIT). The remainder of my testimony provides a summary of
that assessment including the scope and motivation behind the study, as
well as its major findings and recommendations. Supporting
documentation is provided in the full report (Tester et al., 2006)--of
which copies of the Executive Summary have been provided for your
review. The complete 400+ page report is available on the web at http:/
/geothermal.inel.gov/publications/
future-of-geothermal-energy.pdf
In simple terms, any geothermal resource can be viewed as a
continuum in several dimensions. The grade of a specific geothermal
resource depends on its temperature-depth relationship (i.e.,
geothermal gradient), the reservoir rock's permeability and porosity,
and the amount of fluid saturation (in the form of liquid water and/or
steam). High-grade hydrothermal resources have high average thermal
gradients, high rock permeability and porosity, sufficient fluids in
place, and an adequate reservoir recharge of fluids; all EGS resources
lack at least one of these. For example, reservoir rock may be hot
enough but not produce sufficient fluid for viable heat extraction,
either because of low formation permeability/connectivity and
insufficient reservoir volume, or the absence of naturally contained
fluids.
A geothermal resource is usually described in terms of stored
thermal energy content of the rock and contained fluids underlying land
masses that are accessible by drilling. The United States Geological
Survey and other groups have used a maximum accessible depth of 10 km
(approx. 30,000 ft.) to define the resource. Although conventional
hydrothermal resources are already being used effectively for both
electric and non-electric applications in the United States, and will
continue to be developed, they are somewhat limited by their locations
and ultimate potential. Beyond these conventional resources are EGS
resources with enormous potential for primary energy recovery using
heat-mining technology, which is designed to extract and utilize the
Earth's stored thermal energy. In addition to hydrothermal and EGS,
other geothermal resources include co-produced hot water associated
with oil and gas production, and geo-pressured resources that contain
hot fluids with dissolved methane. Because EGS resources have such a
large potential for the long-term, the panel focused its efforts on
evaluating what it would take for EGS and other unconventional
geothermal resources to provide 100,000 MWe of base-load electric-
generating capacity by 2050.
Three main components were considered in the analysis:
1. Resource--mapping the magnitude and distribution of the
U.S. EGS resource.
2. Technology--establishing requirements for extracting and
utilizing energy from EGS reservoirs, including drilling,
reservoir design and stimulation, and thermal energy conversion
to electricity. Because EGS stimulation methods have been
tested at a number of sites around the world, technology
advances, lessons learned and remaining needs were considered.
3. Economics--estimating costs for EGS-supplied electricity on
a national scale using newly developed methods for mining heat
from the Earth, as well as developing levelized energy costs
and supply curves as a function of invested R&D and deployment
levels in evolving U.S. energy markets.
Motivation: There are compelling reasons why the United States
should be concerned about the security of our energy supply for the
long-term. Key reasons include growth in demand as a result of an
increasing U.S. population, the increased electrification of our
society, and concerns about the environment. According to the Energy
Information Administration (EIA, 2006), U.S. nameplate generating
capacity has increased more than 40 percent in the past 10 years and is
now more than one TWe. For the past two decades, most of the increase
resulted from adding gas-fired, combined-cycle generation plants. In
the next 15 to 25 years, the electricity supply system is threatened
with losing capacity as a result of retirement of existing nuclear and
coal-fired generating plants (EIA, 2006). It is likely that 50 GWe or
more of coal-fired capacity will need to be retired in the next 15 to
25 years because of environmental concerns. In addition, during that
period, 40 GWe or more of nuclear capacity will be beyond even the most
generous re-licensing accommodations and will have to be
decommissioned.
The current nonrenewable options for replacing this anticipated
loss of U.S. base-load generating capacity are coal-fired thermal,
nuclear, and combined-cycle gas-combustion turbines. While these are
clearly practical options, there are some concerns. First, while
electricity generated using natural gas is cleaner in terms of
emissions, demand and prices for natural gas will escalate
substantially during the next 25 years. As a result, large increases in
imported gas will be needed to meet growing demand--further
compromising U.S. energy security beyond just importing the majority of
our oil for meeting transportation needs. Second, local, regional, and
global environmental impacts associated with increased coal use will
most likely require a transition to clean-coal power generation,
possibly with sequestration of carbon dioxide. The costs and
uncertainties associated with such a transition are daunting. Also,
adopting this approach would accelerate our consumption of coal
significantly, compromising its use as a source of liquid
transportation fuel for the long-term. It is also uncertain whether the
American public is ready to embrace increasing nuclear power capacity,
which would require siting and constructing many new reactor systems.
On the renewable side, there is considerable opportunity for
capacity expansion of U.S. hydropower potential using existing dams and
impoundments. But outside of a few pumped storage projects, hydropower
growth has been hampered by reductions in capacity imposed by the
Federal Energy Regulatory Commission (FERC) as a result of
environmental concerns. Concentrating Solar Power (CSP) provides an
option for increased base-load capacity in the Southwest where demand
is growing. Although renewable solar and wind energy also have
significant potential for the United States and are likely to be
deployed in increasing amounts, it is unlikely that they alone can meet
the entire demand. Furthermore, solar and wind energy are inherently
intermittent and cannot provide 24-hour-a-day baseload without mega-
sized energy storage systems, which traditionally have not been easy to
site and are costly to deploy. Biomass also can be used as a renewable
fuel to provide electricity using existing heat-to-power technology,
but its value to the United States as a feedstock for biofuels for
transportation is much higher, given the current goals of reducing U.S.
demand for imported oil.
Clearly, we need to increase energy efficiency in all end-use
sectors; but even aggressive efforts cannot eliminate the substantial
replacement and new capacity additions that will be needed to avoid
severe reductions in the services that energy provides to all
Americans.
Pursuing the geothermal option: The main question we address in our
assessment of EGS is whether U.S.-based geothermal energy can provide a
viable option for providing large amounts of generating capacity when
and where it is needed.
Although geothermal energy has provided commercial base-load
electricity around the world for more than a century, it is often
ignored in national projections of evolving U.S. energy supply. Perhaps
geothermal has been ignored as a result of the widespread perception
that the total geothermal resource is only associated with identified
high-grade, hydrothermal systems that are too few and too limited in
their distribution in the United States to make a long term, major
impact at a national level. This perception has led to undervaluing the
long-term potential of geothermal energy by missing a major opportunity
to develop technologies for sustainable heat mining from large volumes
of accessible hot rock anywhere in the United States. In fact, many
attributes of geothermal energy, namely its widespread distribution,
base-load dispatchability without storage, small footprint, and low
emissions, are very desirable for reaching a sustainable energy future
for the United States.
Expanding our energy supply portfolio to include more indigenous
and renewable resources is a sound approach that will increase energy
security in a manner that parallels the diversification ideals that
have made America strong. Geothermal energy provides a robust, long-
lasting option with attributes that would complement other important
contributions from clean coal, nuclear, solar, wind, hydropower, and
biomass.
Approach: The composition of the panel was designed to provide in-
depth expertise in specific technology areas relevant to EGS
development, such as resource characterization and assessment,
drilling, reservoir stimulation, and economic analysis. Recognizing the
possibility that some bias might emerge from a panel of knowledgeable
experts who, to varying degrees, are advocates for geothermal energy,
panel membership was expanded to include other experts on non-
geothermal energy technologies and economics, and environmental
systems. Overall, the panel took a completely new look at the
geothermal potential of the United States. This study was partly in
response to short- and long-term needs for a reliable low-cost electric
power and heat supply for the Nation. Equally important was a need to
review and evaluate international progress in the development of EGS
and related extractive technologies that followed the very active
period of U.S. fieldwork conducted by Los Alamos National Laboratory
during the 1970s and 1980s at the Fenton Hill site in New Mexico.
The assessment team was assembled in August 2005 and began work in
September, following a series of discussions and workshops sponsored by
the Department of Energy (DOE) to map out future pathways for
developing EGS technology. The final report was released in January of
2007.
The first phase of the assessment considered our geothermal
resource in detail. Earlier projections from studies in 1975 and 1978
by the U.S. Geological Survey (USGS Circulars 726 and 790) were
amplified by ongoing research and analysis being conducted by U.S.
heat-flow researchers and were analyzed by David Blackwell's group at
Southern Methodist University (SMU) and other researchers. In the
second phase, EGS technology was evaluated in three distinct parts:
drilling to gain access to the system, reservoir design and
stimulation, and energy conversion and utilization. Previous and
current field experiences in the United States, Europe, Japan, and
Australia were thoroughly reviewed. Finally, the general economic
picture and anticipated costs for EGS were analyzed in the context of
projected demand for base-load electric power in the United States.
Findings: Geothermal energy from EGS represents a large, indigenous
resource that can provide base-load electric power and heat at a level
that can have a major impact in the United States, while incurring
minimal environmental impacts. With a reasonable investment in R&D, EGS
could provide 100 GWe or more of cost-competitive generating capacity
in the next 50 years. Further, EGS provides a secure source of power
for the long-term that would help protect America against economic
instabilities resulting from fuel price fluctuations or supply
disruptions. Most of the key technical requirements to make EGS
economically viable over a wide area of the country are in effect.
Remaining goals are easily within reach to provide performance
verification and demonstrate the repeatability of EGS technology at a
commercial scale within a 10- to 15-year period nationwide.
In spite of its enormous potential, the geothermal option for the
United States has been largely ignored. In the short-term, R&D funding
levels and government policies and incentives have not favored growth
of U.S. geothermal capacity from conventional, high-grade hydrothermal
resources. Because of limited R&D support of EGS in the United States,
field testing and support for applied geosciences and engineering
research have been lacking for more than a decade. Because of this lack
of support, EGS technology development and demonstration recently has
advanced only outside the United States, with limited technology
transfer, leading to the perception that insurmountable technical
problems or limitations exist for EGS. However, in our detailed review
of international field-testing data so far, the panel did not uncover
any major barriers or limitations to the technology. In fact, we found
that significant progress has been achieved in recent tests carried out
at Soultz, France, under European Union (EU) sponsorship; and in
Australia, under largely private sponsorship. For example, at Soultz, a
connected reservoir-well system with an active volume of more than two
km3 at depths from four to five km has been created and
tested at fluid production rates within a factor of two to three of
initial commercial goals. Such progress leads us to be optimistic about
achieving commercial viability in the United States in the next phase
of testing, if a national-scale program is supported properly. Specific
findings include:
1. The amount of accessible geothermal energy that is stored in rock is
immense and well distributed across the U.S. The fraction that can be
captured and ultimately recovered will not be resource-limited; it will
depend only on extending existing extractive technologies for
conventional hydrothermal systems and for oil and gas recovery. The
U.S. geothermal resource is contained in a continuum of grades ranging
from today's hydrothermal, convective systems through high- and mid-
grade EGS resources (located primarily in the western United States) to
the very large, conduction-dominated contributions in the deep basement
and sedimentary rock formations throughout the country. By evaluating
an extensive database of bottom-hole temperature and regional geologic
data (rock types, stress levels, surface temperatures, etc.), we have
estimated the total U.S. EGS resource base to be about 14 million
exajoules (EJ). Figure 1 and Table 1 highlight the results of the
resource assessment portion of the study. Figure 1 shows an average
geothermal gradient map and temperature distributions at specific
depths for the contiguous U.S. while Table 1 lists the resource bases
for different categories of geothermal. Figure 2 compares the total
resource to what we estimate might be technically recoverable. Using
conservative assumptions regarding how heat would be mined from
stimulated EGS reservoirs, we estimate the extractable portion to
exceed 200,000 EJ or about 2,000 times the annual consumption of
primary energy in the United States in 2005. With technology
improvements, the economically extractable amount of useful energy
could increase by a factor of 10 or more, thus making EGS sustainable
for centuries.
2. Ongoing work on both hydrothermal and EGS resource development
complement each other. Improvements to drilling and power conversion
technologies, as well as better understanding of fractured rock
structure and flow properties, benefit all geothermal energy
development scenarios. Geothermal operators now routinely view their
projects as heat mining and plan for managed injection to ensure long
reservoir life. While stimulating geothermal wells in hydrothermal
developments is now routine, understanding why some techniques work on
some wells and not on others can come only from careful research.
3. EGS technology advances. EGS technology has advanced since its
infancy in the 1970s at Fenton Hill. Field studies conducted worldwide
for more than 30 years have shown that EGS is technically feasible in
terms of producing net thermal energy by circulating water through
stimulated regions of rock at depths ranging from three to five km. We
can now stimulate large rock volumes (more than two km3 ),
drill into these stimulated regions to establish connected reservoirs,
generate connectivity in a controlled way if needed, circulate fluid
without large pressure losses at near commercial rates, and generate
power using the thermal energy produced at the surface from the created
EGS system. Initial concerns regarding five key issues--flow short
circuiting, a need for high injection pressures, water losses,
geochemical impacts, and induced seismicity--appear to be either fully
resolved or manageable with proper monitoring and operational changes.
4. Remaining EGS technology needs. At this point, the main constraint
is creating sufficient connectivity within the injection and production
well system in the stimulated region of the EGS reservoir to allow for
high per-well production rates without reducing reservoir life by rapid
cooling (see Figure 3). U.S. field demonstrations have been constrained
by many external issues, which have limited further stimulation and
development efforts and circulation testing times--and, as a result,
risks and uncertainties have not been reduced to a point where private
investments would completely support the commercial deployment of EGS
in the United States. In Europe and Australia, where government policy
creates a more favorable climate, the situation is different for EGS.
There are now seven companies in Australia actively pursuing EGS
projects, and two commercial projects in Europe.
5. Impact of Research, Development, and Demonstration (RD&D). Focus on
critical research needs could greatly enhance the overall
competitiveness of geothermal in two ways. First, such research would
lead to generally lower development costs for all grade systems, which
would increase the attractiveness of EGS projects for private
investment. Second, research could substantially lower power plant,
drilling, and stimulation costs, thereby increasing accessibility to
lower-grade EGS areas at depths of six km or more. In a manner similar
to the technologies developed for oil and gas and mineral extraction,
the investments made in research to develop extractive technology for
EGS would follow a natural learning curve that lowers development costs
and increases reserves along a continuum of geothermal resource grades.
Examples of benefits that would result from research-driven
improvements are presented in three areas:
Drilling technology--Evolutionary improvements
building on conventional approaches to drilling such as more
robust drill bits, innovative casing methods, better cementing
techniques for high temperatures, improved sensors, and
electronics capable of operating at higher temperature in down-
hole tools will lower production costs. In addition,
revolutionary improvements utilizing new methods of rock
penetration will also lower costs. These improvements will
enable access to deeper, hotter regions in high-grade
formations or to economically acceptable temperatures in lower-
grade formations.
Power conversion technology--Although commercial
technologies are in place for utilizing geothermal energy in 70
countries, further improvements to heat-transfer performance
for lower-temperature fluids, and to developing plant designs
for higher resource temperatures in the super-critical water
region will lead to measurable gains. For example, at super-
critical temperatures about an order of magnitude (or more)
increase in both reservoir performance and heat-to-power
conversion efficiency would be possible over today's liquid-
dominated hydrothermal systems.
Reservoir technology--Increasing production flow
rates by targeting specific zones for stimulation and improving
down-hole lift systems for higher temperatures, and increasing
swept areas and volumes to improve heat-removal efficiencies in
fractured rock systems, will lead to immediate cost reductions
by increasing output per well and extending reservoir
lifetimes. For the longer-term, using CO2 as a
reservoir heat-transfer fluid for EGS could lead to improved
reservoir performance as a result of its low viscosity and high
density at super-critical conditions. In addition, using
CO2 in EGS may provide an alternative means to
sequester large amounts of carbon in stable formations.
6. EGS systems are versatile, inherently modular, and scalable.
Individual power plants ranging from one to 50 MWe in capacity are
possible for distributed applications and can be combined--leading to
large ``power parks,'' capable of providing thousands of MWe of
continuous, base-load capacity. Of course, for most direct-heating and
heat pump applications, effective use of shallow geothermal energy has
been demonstrated at a scale of a few kilowatts-thermal (kWt) for
individual buildings or homes and should be continued to be deployed
aggressively when possible. For these particular applications,
stimulating deeper reservoirs using EGS technology is not necessary.
Nonetheless, EGS also can be easily deployed in larger-scale district
heating and combined heat and power (co-generation) applications to
service both electric power and heating and cooling for buildings
without a need for storage on-site. For other renewable options such as
wind, hydropower, and solar PV, such co-generation applications are not
possible.
7. A short-term ``win-win'' opportunity. Using co-produced hot water,
available in large quantities at temperatures up to 100+C or
more from existing oil and gas operations, makes it possible to
generate up to 11,000 MWe of new generating capacity with standard
binary-cycle technology, and to increase hydrocarbon production by
partially offsetting parasitic losses consumed during production.
8. The long-term goal for EGS is tractable and affordable. Estimated
supply curves for EGS shown in Figure 4 indicate that a large increase
in geothermal generating capacity is possible by 2050 if investments
are made now. A cumulative capacity of more than 100,000 MWe from EGS
can be achieved in the United States within 50 years with a modest,
multi-year federal investment for RD&D in several field projects in the
United States. Because the field-demonstration program involves staged
developments at different sites, committed support for an extended
period is needed to demonstrate the viability, robustness, and
reproducibility of methods for stimulating viable, commercial-sized EGS
reservoirs at several locations. Based on the economic analysis we
conducted as part of our study, a $300 million to $400 million
investment over 15 years will be needed to make early-generation EGS
power plant installations competitive in evolving U.S. electricity
supply markets.
These funds compensate for the higher capital and financing costs
expected for early-generation EGS plants, which would be expected as a
result of somewhat higher field development (drilling and stimulation)
costs per unit of power initially produced. Higher generating costs, in
turn, lead to higher perceived financial risk for investors with
corresponding higher-debt interest rates and equity rates of return. In
effect, the federal investment can be viewed as equivalent to an
``absorbed cost'' of deployment. In addition, comparable investments in
R&D will also be needed to develop technology improvements to lower
costs for future deployment of EGS plants.
To a great extent, energy markets and government policies will
influence the private sector's interest in developing EGS technology.
In today's economic climate, there is reluctance for private industry
to invest funds without strong guarantees. Thus, initially, it is
likely that government will have to fully support EGS fieldwork and
supporting R&D. Later, as field sites are established and proven, the
private sector will assume a greater role in co-funding projects--
especially with government incentives accelerating the transition to
independently financed EGS projects in the private sector. Our analysis
indicates that, after a few EGS plants at several sites are built and
operating, the technology will improve to a point where development
costs and risks would diminish significantly, allowing the levelized
cost of producing EGS electricity in the United States to be at or
below market prices.
Given these issues and growing concerns over long-term energy
security, the Federal Government will need to provide funds directly or
introduce other incentives in support of EGS as a long-term ``public
good,'' similar to early federal investments in large hydropower dam
projects and nuclear power reactors.
9. Geothermal energy complements other renewables such as wind, solar
and biomass operating in their appropriate domains. Geothermal energy
provides continuous base-load power with minimal visual and other
environmental impacts. Geothermal systems have a small footprint and
virtually no emissions, including no carbon dioxide. Geothermal energy
has significant base-load potential, requires no storage, and, thus, it
complements other renewables--solar (CSP and PV), wind, hydropower--in
a lower-carbon energy future. In the shorter-term, having a significant
portion of our baseload supplied by geothermal sources would provide a
buffer against the instabilities of gas price fluctuations and supply
disruptions, as well as nuclear plant retirements. Estimates of the
carbon emission reductions possible for different levels of EGS
capacity are shown in Figure 5.
Recommendations for re-energizing the U.S. geothermal program: Based on
growing markets in the United States for clean, base-load capacity, the
panel believes that with a combined public/private investment of about
$800 million to $1 billion over a 15-year period, EGS technology could
be deployed commercially on a timescale that would produce more than
100,000 MWe or 100 GWe of new capacity by 2050. This amount is
approximately equivalent to the total R&D investment made in the past
30 years to EGS internationally, which is still less than the cost of a
single, new-generation, clean-coal power plant. Making such an
investment now is appropriate and prudent, given the enormous potential
of EGS and the technical progress that has been achieved so far in the
field. Having EGS as an option will strengthen America's energy
security for the long-term in a manner that complements other
renewables, clean fossil, and next-generation nuclear.
Because prototype commercial-scale EGS will take a few years to
develop and field-test, the time for action is now. Supporting the EGS
program now will move us along the learning curve to a point where the
design and engineering of well-connected EGS reservoir systems is
technically reliable and reproducible.
We believe that the benefit-to-cost ratio is more than sufficient
to warrant such a modest investment in EGS technology. By enabling
100,000 MWe of new base-load capacity, the payoff for EGS is large,
especially in light of how much would have to be spent for deployment
of conventional gas, nuclear, or coal-fired systems to meet replacement
of retiring plants and capacity increases, as there are no other
options with sufficient scale on the horizon.
Specific recommendations include:
1. There should be a federal commitment to supporting EGS resource
characterization and assessment. An aggressive, sufficiently supported,
multi-year national program with USGS and DOE is needed along with
other agency participation to further quantify and refine the EGS
resource as extraction and conversion technologies improve.
2. High-grade EGS resources should be developed first as targets of
opportunity on the margins of existing hydrothermal systems and in
areas with sufficient natural recharge, or in oil fields with high-
temperature water and abundant data, followed by field efforts at sites
with above-average temperature gradients. Representative sites in high-
grade areas, where field development and demonstration costs would be
lower, should be selected initially to prove that EGS technology will
work at a commercial scale. These near-term targets of opportunity
include EGS sites that are currently under consideration at Desert Peak
(Nevada), and Coso and Clear Lake (both in California), as well as
others that would demonstrate that reservoir-stimulation methods can
work in other geologic settings, such as the deep, high-temperature
sedimentary basins in Louisiana, Texas, and Oklahoma. Such efforts
would provide essential reservoir stimulation and operational
information and would provide working ``field laboratories'' to train
the next generation of scientists and engineers who will be needed to
develop and deploy EGS on a national scale.
3. In the first 15 years of the program, a number of sites in different
regions of the country should be under development. Demonstration of
the repeatability and universality of EGS technologies in different
geologic environments is needed to reduce risk and uncertainties,
resulting in lower development costs.
4. Like all new energy-supply technologies, for EGS to enter and
compete in evolving U.S. electricity markets, positive policies at the
state and federal levels will be required. These policies must be
similar to those that oil and gas and other mineral-extraction
operations have received in the past--including provisions for
accelerated permitting and licensing, loan guarantees, depletion
allowances, intangible drilling write-offs, and accelerated
depreciations, as well as those policies associated with cleaner and
renewable energies such as production tax credits, renewable credits
and portfolio standards, etc. The success of this approach would
parallel the development of the U.S. coal-bed methane industry.
5. Given the significant leveraging of supporting research that will
occur, we recommend that the United States actively participate in
ongoing international field projects such as the EU project at Soultz,
France, and the Cooper Basin project in Australia.
6. A commitment should be made to continue to update economic analyses
as EGS technology improves with field testing, and EGS should be
included in the National Energy Modeling System (NEMS) portfolio of
evolving energy options.
References
The references listed below are part of those cited in the Synopsis
and Executive Summary of The Future of Geothermal Energy, by Tester,
J.W., B.J. Anderson, A.S. Batchelor, D.D. Blackwell, R. DiPippo, E.
Drake, J. Garnish, B. Livesay, M.C. Moore, K. Nichols, S. Petty, M.N.
Toksoz, R.W. Veatch, R. Baria, C. Augustine, E. Murphy, P. Negraru, and
M. Richards, MIT report, Cambridge, MA (2006). A list of all the
literature that was reviewed and evaluated is in the full report which
is available at
http://geothermal.inel.gov/publications/
future-of-geothermal-energy.pdf
Armstead, H.C.H. and J.W. Tester. 1987. Heat Mining. E. and F.N. Spon,
London.
Blackwell, D.D. and M. Richards. 2004. Geothermal Map of North America.
Amer. Assoc. Petroleum Geologists, Tulsa, Oklahoma, 1 sheet,
scale 1:6,500,000.
Bodvarsson, G. and J.M. Hanson. 1977. ``Forced Geoheat Extraction from
Sheet-like Fluid Conductors.'' Proceedings of the Second NATO-
CCMS Information Meeting on dry hot rock geothermal energy. Los
Alamos Scientific Laboratory report, LA-7021:85.
Energy Information Administration (EIA). 2006-2007. Annual Energy
Outlook and other EIA documents, U.S. Department of Energy
(DOE), web site http://www.eia.doe.gov/
McKenna, J., D. Blackwell, C. Moyes, and P.D. Patterson. 2005.
``Geothermal electric power supply possible from Gulf Coast,
Mid-continent oil field waters.'' Oil & Gas Journal, Sept. 5,
pp. 34-40.
Sanyal, S.K. and S.J. Butler. 2005. ``An Analysis of Power Generation
Prospects From Enhanced Geothermal Systems.'' Geothermal
Resources Council Transactions, 29.
U.S. Geological Survey, Circulars 726 and 790, Washington, DC (1975,
1979).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Lampson. Thank you, Dr. Tester.
Mr. Thomsen.
STATEMENT OF MR. PAUL A. THOMSEN, PUBLIC POLICY MANAGER, ORMAT
TECHNOLOGIES, INC.
Mr. Thomsen. Mr. Chairman, Members of the Committee, it is
my honor to testify today on behalf of ORMAT Technologies, a
leading producer of geothermal energy around the world and in
the United States, and on behalf of the Geothermal Energy
Association (GEA).
ORMAT and the GEA applaud Representative McNerney for
introducing H.R. 2304, which directs the Secretary of Energy to
conduct a program of research, development, and demonstration
of commercial applications to expand the use of geothermal
energy production. This legislation is crucial in directing the
Department of Energy to implement what we feel was the
legislative intent of the 2005 Energy Policy Act that was never
realized due to the immediate reduction and termination of the
geothermal budget only months after the 2005 Energy Policy Act
was enacted. This bill, if passed, will seed the basic
research, provide cost sharing and disseminate the information
necessary to quickly and efficiently move this country away
from its dependence on foreign oil.
I submit to you all that this bill is necessary to push the
Administration in the direction of funding the research
necessary to fully develop this country's homegrown, green,
domestic geothermal energy supply. Geothermal energy currently
provides this country with 2,800 megawatts of clean, renewable,
domestic energy which generates on average 16 billion kilowatt-
hours of energy, or enough power to light up two million homes.
But I would like to point out, however, that in 1979 the U.S.
Geological Survey estimated a hydrothermal resource base in
this country between 95,000 and 105,000 megawatts. In 2006, the
Geothermal Task Force of the Western Governors Association
identified 5,600 megawatts of geothermal power that could be
developed with existing incentives. Today the GEA believes that
74 new geothermal energy projects are under some form of
development in the United States and can provide an additional
2,500 megawatts of electrical power capacity. As this new
capacity comes online, it will represent an investment of
roughly $8 billion. It will create 10,000 new full-time jobs
and stimulate over 40,000 person-years of construction and
manufacturing employment across this country. However, if we
add the additional 2,500 megawatts coming online to our current
production, we see that we will produce approximately 5,300
megawatts from a known hydrothermal resource base that was
conservatively estimated at 150,000 megawatts in 1979. I ask
you, is that the best we can do? Is 3.5 percent utilization of
our clean, domestic, baseload resource acceptable to a country
that imports 10 million barrels of oil a day and is 60 percent
dependent on net petroleum imports?
H.R. 2304 recognizes that the answer is ``no.'' The time to
take action is now. There are substantial needs for
improvements in technology, resource information and efficiency
for which federal research is vital. Join me, please, in
supporting H.R. 2304 and capitalizing upon one of our greatest
national assets, human ingenuity. H.R. 2304 will allow the men
and women of our national laboratories, universities, state
energy offices and private enterprise to develop cutting-edge
geothermal projects and technology that will make use of this
country's vast untapped geothermal potential.
On behalf of ORMAT, I want to applaud this committee for
its interest in a secure domestic baseload energy supply that
is geothermal energy. We humbly realize that the decisions made
by this committee impact our nation's energy security.
This concludes my introductory comments and I will be happy
to respond to any questions this committee might have.
[The prepared statement of Mr. Thomsen follows:]
Prepared Statement of Paul A. Thomsen
Mr. Chairman, Members of the Committee, it is my honor to testify
today on behalf of not only ORMAT Technologies, but also on behalf of
the Geothermal Energy Association whose testimony has been reviewed and
approved by the entire Board of Directors and will be submitted along
with my testimony into the record.
By way of introduction ORMAT Technologies, is a New York Stock
Exchange registered company (symbol ``ORA''). ORMAT technologies
develops, owns, and operates geothermal and recovered energy facilities
throughout the world. ORMAT has supplied 900 MWs of geothermal power
plants in 21 countries. Here in the United States ORMAT owns and
operates approximately 300 MWs of geothermal power plants in the states
of California, Hawaii, Nevada, and we are pleased to be providing U.S.
Geothermal Company with the technology needed to bring Idaho's first
geothermal power plant online.
We applaud Rep. McNerney for introducing H.R. 2304 which would
direct the Secretary of Energy to conduct a program of research,
development, demonstration and commercial applications for geothermal
energy. This legislation would authorize a program that will help
develop the science and technology needed to utilize the vast untapped
geothermal resources of our nation.
ORMAT believes a vast potential exists that could help meet the
country's growing electricity needs, spur economic growth and help
reduce emissions of greenhouse gases. The Geothermal Task Force of the
Western Governors Association's Clean and Diversified Energy Advisory
Group identified 5,600 MW of geothermal power that could be developed
with existing incentives, and another 13,000 MW that could be tapped
with additional time, higher prices, or both. Of course, these
estimates assume today's level of technology, which is a major variable
that could change these results.
H.R. 2304 would authorize and direct DOE to undertake a research
program that would develop the tools and technology needed to find and
successfully develop the hydrothermal resource base. Without the
support of the Federal Government as proposed in H.R. 2304 it is our
view that most of the hydrothermal resource base will not be developed
under current conditions. H.R. 2304 would also direct the Department to
take the steps towards developing full scale enhanced geothermal
systems (EGS) technology. From ORMAT's experience every MW of clean,
baseload, geothermal energy we bring on line represents a three million
capital investment by our company.
H.R. 2304 also would establish centers of geothermal technology
transfer. Information is important to improve exploration, application
of technology, and improved performance of geothermal development and
production efforts. ORMAT feels that the proposal to establish such
centers would be an important aid in efforts to tap our nation's
geothermal resources.
ORMAT recognizes that H.R. 2304 does list both co-production and
geo-pressured resources as items to be addressed by the Secretary of
Energy in a required report to Congress on advanced uses of geothermal
energy. If additional provisions are not included in the bill, we would
hope that the Department would take this opportunity to re-examine its
views of these, and all geothermal technologies, to develop programs
that would effectively tap this enormous, undeveloped domestic energy
supply.
ORMAT believes cost-sharing is an appropriate and necessary
component of a near-market partnership between the government and a
for-profit entity. For an example of what can come from this type of
collaboration I turn to the fact that ORMAT has signed a cost-shared
Cooperative Research and Development Agreement (CRADA) with DOE to
validate the feasibility of a proven technology already used in
geothermal and Recovered Energy Generation (REG).
The project will be conducted at the DOE Rocky Mountain Oil Test
Center (RMOTC), near Casper, Wyoming, and will use an ORMAT Organic
Rankine Cycle (ORC) power generation system to produce commercial
electricity. ORMAT will supply the ORC power unit at its own expense
while the DOE will install and operate the facility for a 12-month
period. ORMAT and the DOE will share the total cost of the test and the
study, with ORMAT bearing approximately two thirds of the less than $1M
total investment.
Presently there are two large unutilized sources of hot water at
the RMOTC Naval Petroleum Reserve No. 3, which produces water in excess
of 190 degrees Fahrenheit and at flow rates sufficient for generation
of approximately 200 kW. This project will consist of the installation,
testing and evaluation of a binary geothermal power unit in the field
near these hot water sources. The ORC power unit will be interconnected
into the field electrical system and the energy produced will be used
by RMOTC and monitored for reliability quality.
The information gathered from this project may have implications to
the some 8,000 similar type wells have been identified in Texas, by
Professor Richard Erdlac of the University of Texas of the Permian
Basin, and the U.S. DOE Geothermal Research Project Office. Lyle
Johnson senior engineer at the RMOTC stated ``The introduction of
geothermal energy production in the oil field will increase the life of
the fields and bridge the gap from fossil energy to renewable energy.''
Why are we zeroing out a research budget that provides such potential
for this country.
ORMAT believes that the full geothermal potential of the western
United States can be brought online in the near-term with the
assistance of legislation as proposed by Rep. McNerney.
On behalf of ORMAT, I want to applaud this committee for its
interest in the secure domestic baseload energy supply that is
geothermal energy. We humbly realize that the decisions made by this
committee impact our nation's energy security. This concludes my
prepared comments I am happy to respond to any questions the Committee
might have.
Statement of the Geothermal Energy Association
Mr. Chairman and Members of the Subcommittee, we applaud the
Subcommittee for holding this hearing entitled ``Developing Untapped
Potential: Geothermal and Ocean Power Technologies.'' We submit this
statement on behalf of the Board of Directors of the Geothermal Energy
Association.
While only a small fraction of the geothermal resource base is
utilized today, geothermal energy provides significant energy for our
nation. The United States is the world's largest producer of geothermal
electricity. The 2,800 MW existing power capacity generates an average
of 16 billion kilowatt hours of energy per year.
According to a GEA survey released last week, seventy-four new
geothermal energy projects are under development in the U.S. that will
provide an additional 2,900 megawatts of electric power capacity. This
new capacity will represent an investment of roughly $6 billion, create
10,000 new full-time jobs, and stimulate over 40,000 person-years of
construction and manufacturing employment across the Nation.
While this new development is impressive, much more potential
exists that could help meet the country's growing electricity needs,
spur economic growth, and help reduce emissions of greenhouse gases.
The Geothermal Task Force of the Western Governors' Association's Clean
and Diversified Energy Advisory Group identified 5,600 MW of geothermal
power that could be developed with existing incentives, and another
13,000 MW that could be tapped with additional time, higher prices, or
both. Of course, these estimates assume today's level of technology,
which is a major variable that could change these results.
Yet, even if these resources were developed, they would represent
only a fraction of the hydrothermal resource base. The U.S. Geological
Survey (USGS), in its Circular 790, estimates a hydrothermal resource
base of between 95,000 and 150,000 MW, of which 25,000 are known
resources. Most of the resources identified in the WGA study were known
resources in 1979 when the USGS completed its report. In 1979 we lacked
the technology to find and characterize most of the hydrothermal
resource base, and unfortunately today we still lack that technical
capability.
In addition to significant electric power generation, direct uses
of geothermal resources by businesses, farms, and communities have
substantial additional potential for energy, economic, and
environmental benefits. While geothermal resources have been used in
communities and homes for decades--for example Boise, Idaho has been
using geothermal resources for space heating for over 100 years--the
extensive potential for direct use has been largely ignored and
underutilized. Direct use resources span the entire country--from New
York to Hawaii--and their expanded use could displace fossil fuels.
Beyond the conventional hydrothermal resources powering our
existing generating plants and providing process heat, new types of
geothermal resources are emerging. Recent estimates indicate a
substantial potential for geothermal production from hot water co-
produced in oil and gas fields, and there is renewed interest in geo-
pressured resources in Texas, Louisiana and the Gulf. These hold
significant future energy potential. Finally, development of the
techniques for engineering geothermal systems (EGS) holds the promise
of expanding economic production from known geothermal systems and
someday allowing production from EGS power systems virtually anywhere
in the U.S.
The benefits of expanding new geothermal production will be
substantial. Geothermal power can be a major contributor to the power
infrastructure and economic well-being of the United States. Geothermal
power is a reliable, 24/7 baseload energy source that typically
operates 90 to 98 percent of the time. Insulated from fuel market price
volatility, geothermal power supports energy price stability and boosts
energy security because it is a domestic resource. Geothermal power can
help diversify the Nation's energy supply and is a clean, renewable
energy source.
The surge in geothermal development portrayed in GEA's new survey
has been stimulated by the federal production tax credit (PTC), which
was first extended to geothermal power facilities in 2005. The PTC
provides the incentive needed to encourage investment in new projects,
and state renewable portfolio standards (RPSs) ensure that there is a
market for geothermal power. In the near-term, both are essential to
sustain the momentum we are witnessing in new project development, but
to develop the full potential of the resource advances in technology
will be essential.
There are substantial needs for improvements in technology,
resource information, and efficiencies for which federal research is
vital. The range of near-term needs is broad. Our knowledge of the
geothermal resource base is limited and largely outdated. The
technology available today to identify and characterize the resource is
too unreliable to mitigate the high risk of development. Drilling in
harsh geothermal environments is difficult and expensive. In locations
where the resource cannot presently support commercial production, we
need to be able to apply EGS techniques to achieve power generation at
competitive prices.
The geothermal industry supports a continued geothermal research
program to address the near-term need to expand domestic energy
production and the longer-term need to find the breakthroughs in
technology that could revolutionize geothermal power production. This
includes an ongoing R&D program focused on further expanding the
hydrothermal resource base, developing the technology needed to make
the EGS concept commercially viable, and taking advantage of the
substantial deep thermal resources associated with the petroleum
formations along the Gulf Coast. These programs are critical if we are
to maintain our national status in cutting-edge geothermal technology,
which is increasingly in jeopardy.
The January 2006 report of the WGA Geothermal Task Force Report
also supports the need for federal research efforts. The Task Force
Report recommends: ``a strong, continuing geothermal research effort at
the Department of Energy that addresses the full range of technical
problems encountered in achieving full production from the identified
and undiscovered resources in the West.'' The report also supports ``.
. .continuation of advanced technology programs and outreach through
GeoPowering the West.'' In addition, the report urges DOE to expand its
program in critical areas ``particularly the identification and
development of new resources'' and ``support for exploration and
exploratory drilling.'' Finally, it asks the Department of Energy (DOE)
to ``examine whether existing federal loan guarantee authority in law
can be used to supplement these activities to reduce risk and encourage
development of new resource areas.'' (http://www.westgov.org/wga/
initiatives/cdeac/geothermal.htm)
We applaud Rep. McNerney for introducing H.R. 2304 which would
direct the Secretary of Energy to conduct a program of research,
development, demonstration and commercial applications for geothermal
energy. This legislation would authorize a program that will help
develop the science and technology needed to utilize the vast untapped
geothermal resources of our nation.
One of the best overviews of that potential is presented in the
National Renewable Energy Laboratory's (NREL) Technical Report
published in November 2006, Geothermal--The Energy Under Our Feet. The
report examines what it terms the ``enormous potential of geothermal
resources.'' It estimates what the full range of geothermal energy
technologies could contribute by 2015, 2025 and 2050. (Geothermal--The
Energy Under Our Feet is available at http://www.nrel.gov/docs/
fy07osti/40665.pdf) The following chart shows NREL's estimate of this
potential:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The NREL report points to at least three areas where geothermal
resources might contribute 100,000 MW of more to domestic energy
supplies: first, the hydrothermal resource base; second, oil and gas
co-production and geo-pressured resources; and, third, development of
``deep geothermal'' (or EGS) production. H.R. 2304 defines specific
research efforts to address at least two of these three energy
opportunities.
H.R. 2304 would authorize and direct DOE to undertake a research
program that would develop the tools and technology needed to find and
successfully develop the hydrothermal resource base. While tax
incentives and State support may be able to double or triple current
geothermal production, that would still be far short of tapping the
Nation's hydrothermal potential. Developing 10,000 or even 20,000 MW of
geothermal energy would be only a fraction of the estimated
hydrothermal resource. But, without the support of the Federal
Government as proposed in H.R. 2304, it is our view that most of the
hydrothermal resource base will not be developed under current
conditions.
H.R. 2304 would also direct the Department to take the steps
towards developing full scale EGS technology. A Massachusetts Institute
of Technology (MIT)-led study released in January 2007 found ``that
mining the huge amounts of heat that reside as stored thermal energy in
the Earth's hard rock crust could supply a substantial portion of the
electricity the United States will need in the future, probably at
competitive prices and with minimal environmental impact.'' (An
Executive Summary and the full MIT report, The Future of Geothermal
Energy, are available at: http://www1.eere.energy.gov/geothermal/
future-geothermal.html).
We understand that Professor Jeff Tester of MIT will testify before
the Subcommittee, so we will defer a lengthy discussion of EGS
technology and its potential. However, GEA supports development of EGS
technology as a critical element of DOE's long-term research strategy.
H.R. 2304 also would establish centers of geothermal technology
transfer. Access to information can help improve exploration,
application of technology, and improved performance of geothermal
development and production efforts. The proposal to establish such
centers would be an important aid in efforts to tap our nation's
geothermal resources.
The one major area of potential identified by NREL that H.R. 2304
does not address with specific authorizing direction is oil and gas
field co-production and geo-pressured resources. These resources hold
substantial energy potential, but serious uncertainties that keep the
market from moving forward must be addressed by federal efforts.
For co-production, there are uncertainties about the resource
information as well as the best fit for power technology. Until there
is better and more detailed information about the resource potential,
and companies have experience using small scale power technology in
these applications, it is unlikely that there will be rapid
commercialization of geothermal technology in oil field settings. Near-
term cost-shared demonstrations at several sites would be the best
approach to resolving these issues and accelerating development of the
energy potential from co-production. We suggest the Committee consider
adding this directly to the legislation rather than waiting for the
report from the Secretary of Energy required by Section 10.
The potential of geo-pressured resources is impressive. They
contain enormous quantities of hot water and gas. The recoverable gas
from geo-pressured reservoirs has been estimated to be several hundred
years supply for the entire Nation. Geo-pressured resources are to
natural gas what oil shale resources are to liquid fuels--a potentially
enormous source of energy. Unfortunately, the one demonstration
conducted by DOE twenty years ago was terminated after a short period
of operation, it did not seek to optimize for gas production, and it
was based upon what is now somewhat dated technology. Today, we have
begun to import greater quantities of natural gas, and projections show
the U.S. becoming much more dependent upon natural gas imports in the
future.
Developing the technology to produce gas from geo-pressured
geothermal resources could curtail our growing dependence on imports,
but the cost and extreme risk of geo-pressured development will not be
undertaken by industry alone. It requires a partnership with the
government. Given the enormous resource potential, such an effort is
justified and in the national interest.
We recognize that H.R. 2304 lists both co-production and geo-
pressured resources as items to be addressed by the Secretary of Energy
in a required report to Congress on advanced uses of geothermal energy.
If additional provisions are not included in the bill, we hope the
Department will take this opportunity to re-examine its views of these,
and all geothermal technologies, to develop programs that would
effectively tap this enormous, undeveloped domestic energy supply.
The cost-sharing requirements of H.R. 2304 raise a number of
questions. While in principle, GEA believes cost-sharing is an
appropriate and necessary component of a near-market partnership
between the government and a for-profit entity, it's not clear that the
provisions of the legislation recognize appropriately the role of
contractors and researchers who lack the resources and profit-potential
motivation to enter into a significant cost-share. In addition, we
suggest that the Subcommittee consider making all cost-share
requirements ranges rather than single proposed percentages and
including in the measure some of the basic criteria DOE should use to
determine when a cost share is appropriate and at what percentage. This
might provide better results while maintaining the principle which we
believe the legislation seeks to affirm.
Finally, we encourage the Committee to examine whether the update
of the national geothermal resource assessment being conducted by the
U.S. Geologic Survey will be adequate and complete. This will be the
first assessment in over 25 years, and it is critical to the future
progress in geothermal energy production. Policy-makers at all levels
need accurate and reliable information about the potential contribution
of geothermal resources. To be adequate and complete, the USGS
assessment should examine the full range of geothermal resources
identified in the NREL Report and include field verification as
necessary.
We have attached to this statement a letter from Leland Roy Mink,
the former Manager of the DOE Geothermal Research Program, who
expresses his support for the legislation and the Subcommittee's
initiative.
We thank the Subcommittee for considering our views, and encourage
all Members of the Subcommittee to support H.R. 2304. This legislation
is urgently needed to ensure that federal energy programs work to tap
the tremendous potential of our nation's geothermal energy resources.
Attachment
Honorable Congressman Lampson, Chairman
Subcommittee on Energy and Environment
Committee on Science and Technology
U.S. House of Representatives
Washington, DC 20515
Dear Mr. Chairman,
I wish to express strong endorsement for draft legislation the
Subcommittee is considering for support of DOE Geothermal Research and
Development. This legislation is critical for continued development of
the tremendous geothermal energy potential the U.S. possesses and the
leadership role the U.S. has established in geothermal technology.
I am writing because of deep concern about the DOE decision to
terminate the geothermal technology program. I have been active in
geothermal and other energy development throughout the U.S. and
internationally for over 35 years and recently retired as the manager
of the U.S. DOE Geothermal Technologies Program. I feel it is
definitely not in the best interest of the Nation to terminate a
viable, domestic, renewable, non-polluting energy resource at this
time. You, as the Subcommittee, have an opportunity now to make a
significant contribution to the U.S. energy portfolio.
Geothermal energy could play a significant role in addressing the
U.S. need for a clean renewable energy source. Historically electrical
generation from geothermal has led both wind and solar and supplied
significant power to several Western states. Geothermal heat pumps for
heating and cooling of homes, schools and businesses has sizable
potential throughout the U.S. Recent studies by the Massachusetts
Institute of Technology and the National Renewable Energy Laboratory
show significant electrical potential not only in the Western states,
but indicate a strong potential throughout the U.S.
The DOE Geothermal Program support has resulted in significant
technology breakthrough in areas of exploration, drilling, energy
conversion and Enhanced Geothermal Systems (EGS), which has resulted in
the U.S. being a leader in development of geothermal energy. Cost
shared programs with industry have stimulated development of this
important and valuable domestic resource and without this support,
industry will not be able to maintain its technological lead. DOE
support to our national laboratories and universities has resulted in
the advances in technology and the training of scientists and
professionals for the future. Support to State energy office also has
resulted in effective technology transfer to stimulate and expedite
geothermal development.
In conclusion, the Subcommittee is at a critical stage in deciding
the Nation's energy future and I feel geothermal energy can play an
important role in addressing the needs of the U.S. energy future. We
need all of the domestic possibilities for the U.S. and geothermal is
one of the only baseload, non-polluting, renewable energy sources we
have available to us. It could play a significant role in reducing our
dependence on fossil fuel and the addressing the issue of climate
change as a result of CO2 emissions.
I urge you to support legislation to direct DOE to conduct the best
possible geothermal research program to tap the potential of this
resource. Our nation needs it. It would also be a tragedy to see the
U.S. lose its status as a world leader in geothermal technology
development and the resultant decline in the U.S. Geothermal industry.
Respectfully submitted,
Leland Roy Mink
Past Geothermal Program Manager
22088 S Cave Bay
Worley, Idaho 83876
Chairman Lampson. Thank you very much, Mr. Thomsen.
Dr. von Jouanne.
STATEMENT OF DR. ANNETTE VON JOUANNE, PROFESSOR OF POWER
ELECTRONICS AND ENERGY SYSTEMS, OREGON STATE UNIVERSITY
Dr. von Jouanne. Thank you. I have a PowerPoint
presentation. It turns out they don't have it set up so no
problem.
Mr. Chairman, Members of the Committee and in particular
Congresswoman Hooley, thank you very much for this opportunity
to present to you on wave energy opportunities and
developments, and we are strongly in support of this marine
bill which we think is imperative for the United States to lead
the world in wave energy research, development and production.
So first off, I would like to state that I am Annette von
Jouanne and I am a Professor of Power Electronics and Energy
Systems. I have been leading our wave energy program at Oregon
State University for the past several years and we have a
terrific group of multi-disciplinary faculty including an
excellent group of multi-disciplinary undergraduate and
graduate students who are graduating with a keen understanding
of the importance of renewables for our country, and with a
real enthusiasm to make a strong impact on our energy future.
At Oregon State, we have strong outreach efforts to the ocean
community, which are coordinated by Oregon Sea Grant. We have
been moving forward in four thrust areas: number one, to
advance research on wave energy devices where we are designing
devices to respond directly to the heaving motion of the ocean
waves and convert that motion into electrical energy. We are
proposing a national wave energy research and demonstration
center and we are encouraging Federal Government investment
dollars to further this research.
Wave energy is really in the preliminary stages of
development with several topologies emerging and no clearly
superior engineering solutions yet established, and so research
and development dollars are essential for the Federal
Government to really zero in on these optimum topologies, and
you will see those topologies in the PowerPoint presentation
which I had submitted to you. We also at Oregon State have been
promoting the Oregon coast as an optimal place for commercial
wave parks. Off the West Coast of the United States we now have
12 Federal Energy Regulatory Commission preliminary
applications for wave parks and of those 12, seven are off the
Oregon coast. Also, we are looking to examine the environmental
and ecological impacts and we have a workshop planned on the
Oregon coast this summer.
So the reason for all the excitement in wave energy is the
tremendous opportunities that we see when compared to other
renewables. When you look at the amount of energy that is
available in the world's oceans, it is estimated that if just
0.2 percent of that unharnessed energy could be tapped, we
could power the entire world, and of those forms of ocean
energy, wave energy has been identified to have significant
potential and significant advantages regarding energy density,
availability, and predictability, and I am happy to answer
further questions on those details during the question session.
So at Oregon State University, we have strategic facilities
to advance this research. Our energy systems lab, also a wave
research lab, has North America's largest system of wave basins
and we have plans for our first ocean testing this summer.
Again I want to emphasize that these technologies are in the
preliminary stages and federal dollars are really necessary in
order to zero in on optimal topologies to help the U.S.
Government really lead the world in research and production. To
give you an idea, we have done resource assessments off the
Oregon coast, and we have found that during the winter months
we see wave energy potentials in the range of 50 to 60 kilowatt
per meter of crest length. Considering that an average coastal
home uses about 1.3 kilowatts, there is substantial raw energy
available in our waves.
We have substantial collaboration in Oregon with our
universities, with the industry, with the utilities, and we
therefore would like to encourage a national wave energy
research and demonstration center to be located in Oregon in
order to advance the research and the technologies. We are very
pleased that the State of Oregon has recognized the need for
public dollar investment in wave energy and we encourage the
Federal Government to invest in this emerging renewable
technology so that wave energy can be a strong component of our
country's renewable energy portfolio.
Thank you very much for your time and this opportunity to
testify.
[The prepared statement of Dr. von Jouanne follows:]
Prepared Statement of Annette von Jouanne
I. Introduction to Wave Energy Opportunities and Developments
Mr. Chairman, Members of the Committee, and Congresswoman Hooley in
particular, thank you for inviting me to testify today before this
Subcommittee. I am Annette von Jouanne and I am a Professor of Power
Electronics and Energy Systems at Oregon State University. I am honored
to testify before you today on the subject of Ocean Wave Energy.
Ocean energy exists in the forms of wave, tidal, marine currents
(from tidal flow streams), thermal (temperature gradient) and salinity.
Among these forms, significant opportunities and benefits have been
identified in the area of wave energy extraction, which will be the
focus of this testimony.
When we discuss Wave Energy, we are talking about harnessing the
linear motion of the ocean waves, and converting that motion into
electrical energy. Waves have several advantages over other forms of
renewable energy, in that the waves are more available (seasonal, but
more constant) and more predictable with better demand matching. Wave
energy also offers higher energy densities, enabling devices to extract
more power from a smaller volume at consequent lower costs and reduced
visual impact.
Oregon State University (OSU) has a multi-disciplinary Wave Energy
Team pursuing developments in four thrust areas: 1) researching novel
direct-drive wave energy generators (we are on our fifth and sixth
prototypes, with further wave lab and ocean testing planned this
summer), 2) developing an action plan for a National Wave Energy
Research and Demonstration Center in Oregon, 3) working closely with
the Oregon Department of Energy (ODOE) and a variety of stakeholders to
promote Oregon as the optimal location for the Nation's first
commercial wave parks, and 4) examining the biological and ecosystem
effects of wave energy systems.
II. Current Ocean Wave Energy Research, Development and Investment
Activities
OSU's direct-drive wave energy buoy research focuses on a
simplification of processes, i.e., replacing systems employing
intermediate hydraulics or pneumatics with direct-drive approaches to
allow generators to respond directly to the movement of the ocean by
employing magnetic fields for contact-less mechanical energy
transmission, and power electronics for efficient electrical energy
extraction. The term ``direct'' drive describes the direct coupling of
the buoy's velocity and force to the generator without the use of
hydraulic fluid or air.
Leading Wave Energy companies, such as Ocean Power Technologies
(OPT), Finavera Renewables, Ocean Power Delivery (OPD) and Oceanlinx,
are using hydraulic and pneumatic technologies, because it makes sense
for a company trying to accelerate their time to a commercial market to
use more mature technologies. In the university environment, as we are
working with students on advanced degrees, we endeavor to explore
innovative and advanced technologies.
Wave energy developments in the United States are moving forward
rapidly, with twelve (12) preliminary permits filed with FERC (Federal
Energy Regulatory Commission) for off the West Coast (see Attachment
1). The first commercial wave energy device deployments are planned by
the summer of 2008. Remaining obstacles include issues of
survivability, reliability, maintainability, cost reduction, better
understanding of potential environmental/marine impacts and synergistic
ocean community interaction with wave parks. OSU has made great efforts
over the past nine (9) years to develop a leading Wave Energy program,
including building strong support at the state and federal levels, in
addition to building essential collaborations with industries,
utilities and the communities along with outreach to the ocean
community of fishermen and crabbers, etc.
III. The Federal Role in Ocean Wave Energy Research and Development
Currently there has been very little investment by the Federal
Government compared to the rest of the world, and thus as occurred
similarly in the wind industry, the United States is lagging behind
other countries in the development of wave energy technologies. For the
United States to become a wave energy leader in what is projected to
become a rapidly developing new set of industries, the Federal
Government needs to significantly increase their investment in wave
energy research and development.
It has been reported that since 1999, the British government has
committed more than 25 million, or approximately $46.7
million, to research and development and 50 million to
commercialize that research, and additional money to bring the energy
into the electrical grid. In August of 2004, a 5.5 million
($10.72 million) European Marine Energy Center opened in Scotland. To
date, the United State has no comparable facility.
Ideally, we believe the U.S. Department of Energy, the Office of
Naval Research, and the National Oceanographic and Atmospheric
Administration (NOAA) should all begin investing in Ocean Wave Energy
research. However, we believe it is imperative for the U.S. Department
of Energy to become the leader in this field and to begin making a
robust investment in Wave Energy research. As DOE's National Renewable
Energy Laboratory (NREL) is charged with leading the Nation in
renewable energy and energy efficiency research and development, it is
our belief that NREL should establish a unit dedicated to ocean wave
energy research.
Along these lines, the combination of key facilities at OSU,
ongoing successful wave energy research and collaboration, and a
tremendous wave climate off the Oregon coast has led to the proposal of
a National Wave Energy Research and Development Center. In order to
ensure U.S. leadership in what will become a multi-million dollar
industry worldwide (multi-``billion'' dollar as the wind industry is
tracked), the Center could advance wave energy developments through a
number of initiatives including: explore and compare existing ocean
energy extraction technologies, research and develop advanced systems,
investigate efficient and reliable integration with the utility grid
and intermittency issues, advancement of wave forecasting technologies,
conduct experimental and numerical modeling for device and wave park
array optimization, develop a framework for understanding and
evaluating potential environmental and ecosystem impacts of wave
energy, establish protocols for how the ocean community best interacts
with wave energy devices/parks, develop wave energy power measurement
standards, determine wave energy device identification/navigation
standards, etc.
The Oregon Coast has an excellent Wave Energy climate, and combined
with our strategic facilities at Oregon State University, Oregon is in
an excellent position to advance Wave Energy research, development and
production. For example, at OSU, we have the highest power Energy
Systems lab in any university in the Nation, where we have conducted
significant work in renewables, and where we can fully regenerate back
on to the grid to comprehensively research and test renewable energy
technologies. In addition, at OSU we have the O.H. Hinsdale Wave
Research Lab, which has the largest system of wave basins in North
America. At the coast in Newport, Oregon, we have the OSU Hatfield
Marine Science Center, where land-based facilities for a National Wave
Energy Research and Demonstration Center could be integrated. The OSU
Hatfield Marine Science Center campus is already home to satellite labs
and offices for a number of federal agencies--the U.S. Fish and
Wildlife Service, NOAA, EPA, and USDA-ARS.
To properly explore these Wave Energy opportunities, we have been
working closely with Oregon Department of Energy (ODOE) and about 40
other agencies, including the Oregon fishing and crabbing industries,
to enable the Nation's first Commercial Wave Parks to be developed off
the Oregon Coast.
IV. Other Issues and Conclusion
As mentioned above, a significant barrier to wave energy
development is the above-market cost of the electricity. Due to the
early stage of this industry, the current cost of electricity
production from waves is estimated to be several times the market
price, similar to wind when it was emerging 20 years ago. To ensure the
success of wave energy as a promising renewable contribution to the
Nation's energy portfolio, the production incentive is very important
to offset the above-market costs of producing `wave' generated
electricity. At the federal level, it is critical that wave energy
receive a similar incentive mechanism to the production tax credits
that the wind industry receives.
As the Nation tries to meet its renewable energy goals, ocean wave
energy must be a part of the portfolio. Given that approximately fifty
percent of the U.S. population lives within fifty miles of the U.S.
coastline, we must invest in making ocean energy viable--this cannot be
done without the robust support of the Federal Government's research
agencies.
In the State of Oregon we are very excited to be a leader in wave
energy development. We have the wave resource, the expertise through
collaboration including tremendous industry, utility and community
support, and the utility infrastructure along the coast to deliver this
clean, renewable power into the grid.
Thank you for the opportunity to testify before this esteemed
Subcommittee.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Biography for Annette von Jouanne
Dr. Annette von Jouanne has been a Professor in the School of
Electrical Engineering and Computer Science at Oregon State University
since 1995.
She received her Ph.D. degree in Electrical Engineering from Texas
A&M University where she also worked with Toshiba International
Industrial Division. Professor von Jouanne specializes in Energy
Systems, including power electronics and power systems. With a passion
for renewables, she is leading the Wave Energy program at OSU. She is
also the Director of the Motor Systems Resource Facility, the highest
power university-based Energy Systems Lab in the Nation. Dr. von
Jouanne has received national recognition for her research and
teaching, and she is a Registered Professional Engineer as well as a
National Academy of Engineering ``Celebrated Woman Engineer.''
Chairman Lampson. Thank you very much.
Mr. O'Neill.
STATEMENT OF MR. SEAN O'NEILL, PRESIDENT, OCEAN RENEWABLE
ENERGY COALITION
Mr. O'Neill. Thank you, Mr. Chairman. I thank you and your
colleagues for devoting your time and resources to the
important topic of Congresswoman Hooley's Marine and--is my mic
not working? I can normally fill up a room with my voice. Thank
you. How is that? I think I was at the point of Congresswoman
Hooley's Marine and Hydrokinetic Energy Research and
Development Act.
The Ocean Renewable Energy Coalition is the national trade
association for marine and hydrokinetic renewables including
wave, tidal, ocean thermal and offshore wind. We are made up of
32 members including investment firms, investor-owned
utilities, publicly owned utilities, consulting and law firms
in countries including the United States, Canada, Scotland,
Denmark and Ireland. The Electric Power Research Institute
recently estimated the wave and tidal energy resource potential
that could be commercially harnessed, not the total potential,
in the United States as about 400 million megawatt-hours per
year. That is about 10 percent of the national energy supply in
2004.
Projects underway in the United States include Finavera
Renewables' Makah Bay project in Washington State, Verdant
Power's Roosevelt Island project with six units that are
installed and operating in the East River of New York City. New
Jersey-based Ocean Power Technologies has projects in Hawaii,
New Jersey and Reedsport, Oregon, with clients including the
U.S. Navy and the New Jersey Board of Public Utilities.
Multiple permits for sites in Maine, California, Oregon, Alaska
and Florida have been filed with the Federal Energy Regulatory
Commission including companies like Ocean Renewable Power
Company, Tacoma Power and Snohomish PUD in Washington State,
Pacific Gas and Electric in California, and Long Island Power
Authority in New York. Europe has already installed 587
megawatts of offshore wind. Ocean Power Delivery of Scotland is
presently developing the first commercial offshore wave farm
off the coast of Portugal.
We are also finding new technologies emerging. University
of Michigan has developed technology using free-flowing water
and what they call vortex-induced vibrations which is being
further developed by the company Vortex Hydro Energy. Offshore
biomass using kelp and seaweed is also being looked at.
Dr. Robert Cohen, the former manager of Ocean System
Division at DOE and member of the Ocean Energy Council, is in
the audience today. He came out from Colorado, and I am
confident that Dr. Cohen would agree when I say that
encouraging innovation and supporting those technologies with
commercial potential is vital to U.S. interests.
Naturally, costs vary with the type of technology. The
Minerals Management Service's Whitepaper on Offshore Wind
states that, where once the cost of offshore wind was about 40
cents a kilowatt-hour, over the past 20 years these costs have
dropped to between four and six cents. For wave, costs have
been estimated at nine to 16 cents a kilowatt-hour, far more
favorable than the 40 cents a kilowatt-hour of the early
offshore wind experience. For instream tidal, EPRI has
predicted costs as low as six to nine cents per kilowatt-hour.
Since the costs for all renewable resources is free from the
fluctuating cost of fuel, the cost of energy to consumers from
renewable sources functions like a fixed-rate mortgage as
opposed to a variable-rate mortgage that resources that carry
the burden of fuel cost have. In addition, non-technology costs
are expected to drop as this industry matures. These include
insurance and financing costs as well as much needed and
anticipated regulatory and permitting reform.
Yes, the United States has fallen a bit behind other
countries, but we are on track to quickly regain a competitive
position. Portugal offers nearly 32 cents a kilowatt-hour in a
feed-in tariff. Compare this to 1.9 cents per kilowatt-hour
that wind gets in the United States. Britain offers 25 percent
of capital cost reimbursement for wave and tidal projects.
We need to step up to the plate if we are going to compete.
What the industry needs is more R&D funding and technology
development including programs like the one at Oregon State
University, resource assessment, environmental studies,
incentives for private investment, reduced regulatory barriers.
Development of a robust offshore renewables industry can do
this. It can reduce our reliance on foreign oil and other
carbon-emitting energy sources. It can reduce the demand for
onshore land resources for power generation. We can revitalize
shipyards, coastal industrial parks and shuttered naval bases;
create jobs in coastal communities; allow the United States to
export technology to other countries; provide low-cost power
for niche and distributed uses like desalination plants,
aquaculture, naval and military bases, powering stations for
hybrid vehicles and for offshore oil and gas platforms. We
could also provide a use for decommissioned oil platforms,
using a rigs-to-renewables program. And last but not least, we
could promote coastal planning that reflects the goals of
biodiversity that maximize the best comprehensive use of
resources and capitalizes on synergies between offshore
industries. With the proper support, ocean renewable resources
can become a robust part of a reliable, affordable, clean
electric supply portfolio.
Thank you.
[The prepared statement of Mr. O'Neill follows:]
Prepared Statement of Sean O'Neill
Introduction
Ocean Renewable Energy Coalition is the national trade association
for marine and hydrokinetic renewable energy dedicated to promoting
energy technologies from clean, renewable ocean resources. The
coalition is working with industry leaders, academic scholars, and
other interested NGO's to encourage ocean renewable technologies and
raise awareness of their vast potential to help secure an affordable,
reliable, environmentally friendly energy future.
We seek a legislative and regulatory regime in the United States
that will accelerate the development of ocean renewable technologies
and their commercial deployment. While other countries have already
deployed viable, operating, power generating projects using the
emission-free power of ocean waves, currents, and tidal forces, the
U.S. is only beginning to acknowledge the importance these
technologies.
Ocean energy can play a significant role in our nation's renewable
energy portfolio. With the right support, the United States ocean
energy industry can be competitive internationally. With the right
encouragement, ocean renewable energy technologies can help us reduce
our reliance on foreign oil--fossil fuels, in general--and provide
clean energy alternatives to conventional power generating systems. And
with the right public awareness, our coastline communities can use
ocean renewables as a springboard for coastal planning that reflects
the principles of marine biodiversity. Today, OREC will address the
steps that we must take to realize the promise and potential of ocean
renewables.
Is the resource there? Yes, and the resource is located near highly
populated areas on the coast, placing fewer demands on already taxed
transmission infrastructure.
Is the resource cost competitive? Not yet, but indications suggest
a much shorter time to commercial viability than experienced by many
other renewable technologies.
Is the resource environmentally friendly? Preliminarily yes. We
already know that ocean renewables present some of the most potentially
environmentally benign energy technologies available today--no air
emissions, no fuel costs or associated mining or drilling effects, no
fuel transportation costs. We are still learning about the effects of
siting ocean renewable projects, though initial studies are showing
minimal impacts. A Draft Environmental Impact Statement prepared by
Finavera Renewables for its one MW Makah Bay project found no
significant impacts; Ocean Power Technologies has received a ``Finding
of No Significant Impact'' or FONSI from the U.S. Department of the
Navy for its project in Hawaii; and most recently, Verdant Power, Inc.
has been monitoring fish behavior at its Roosevelt Island Tidal Energy
(RITE) facility in New York City since December of 2006 with no
observations of fish strikes on their turbines. Verdant Power's
experience began with two underwater turbines being installed and
monitored by more than $2 million of fish monitoring equipment
including a Didson sonar device that allows scientists and engineers to
observe fish as they interact with turbines in the river. They have
since installed six (6) turbines and continued monitoring. There are
twenty-seven (27) different species of fish including herring and
striped bass in this section of the East River. The project is
presently producing one Mw/hr/day and scientists are watching the fish
swim around the turbines with no fish striking any of the equipment.
As these are only early indications of how these technologies
interact with the marine environment continued diligence is necessary
to establish a thorough baseline of information.
Types of Technology
Ocean energy refers to a range of technologies that utilize the
oceans or ocean resources to generate electricity. Many ocean
technologies are also adaptable to non-impoundment uses in other water
bodies such as lakes or rivers. These technologies can be separated
into three main categories:
Wave Energy Converters: These systems extract the power of ocean waves
and convert it into electricity. Typically, these systems use either a
water column or some type of surface or just-below-surface buoy to
capture the wave power. In addition to oceans, some lakes may offer
sufficient wave activity to support wave energy converter technology.
Tidal/Current: These systems capture the energy of ocean currents below
the wave surface and convert them into electricity. Typically, these
systems rely on underwater turbines, either horizontal or vertical,
which rotate in either the ocean current or changing tide (either one
way or bi-directionally), almost like an underwater windmill or paddle
wheel. These technologies can be sized or adapted for ocean or for use
in lakes or non-impounded river sites.
Ocean Thermal Energy Conversion (OTEC): OTEC generates electricity
through the temperature differential in warmer surface water and colder
deep water. Of ocean technologies, OTEC has the most limited
applicability in the United States because it requires a 40-degree
temperature differential that is typically available in locations like
Hawaii and other more tropical climates.
Offshore Wind: Offshore wind projects take advantage of the vast wind
resources available across oceans and large water bodies. Out at sea,
winds blow freely, unobstructed by any buildings or other structures.
Moreover, winds over oceans are stronger than most onshore, thus
allowing for wind projects with capacity factors of as much as 65
percent, in contrast to the 35-40 percent achieved onshore.
Other: Marine biomass to generate fuel from marine plants or other
organic materials, hydrogen generated from a variety of ocean
renewables and marine geothermal power. There are also opportunities
for hybrid projects, such as combination offshore wind and wave or even
wind and natural gas.
Q1. Please describe the potential for electric power generation from
ocean renewables. How much energy could the ocean supply?
The U.S. wave and current energy resource potential that could be
credibly harnessed is about 400 TWh/yr or about 10 percent of 2004
national energy demand.
EPRI has studied the U.S. wave energy resource and found it to be
about 2,100 TWh/yr divided regionally as shown in the figure below.
Assuming an extraction of 15 percent wave to mechanical energy (which
is limited by device spacing, device absorption, and sea space
constraints), typical power train efficiencies of 90 percent and a
plant availability of 90 percent, the electricity produced is about 260
TWh/yr or equal to an average power of 30,000 MW (or a rated capacity
of about 90,000 MW). This amount is approximately equal to the total
2004 energy generation from conventional hydro power (which is about
6.5 percent of total 2004 U.S. electricity supply).
EPRI has studied the North America tidal energy potential at fewer
than a dozen selected sites. The tidal energy resource at those U.S.
tidal sites alone is 19.6 TWh/yr. Assuming an extraction of 15 percent
tidal kinetic energy to mechanical energy, typical power train
efficiencies of 90 percent and a plant availability of 90 percent, the
yearly electricity produced at the U.S. sites studied is about 270 MW
(average power, rated capacity is about 700 MW). EPRI estimates that
the total tidal and river in stream potential is on the order of 140
tWh/yr or about 3.5 percent of 2004 national electricity supply.
Q2. Please describe the current state of ocean power technologies in
the United States and around the world.
The status of U.S. wave, current and tidal projects
At present, prototype offshore renewable projects are moving
forward in the United States. These include the following:
Finavera Renewables, Inc., has proposed a one MW
pilot project for the Makah Bay off the coast of Washington
State. The project is currently poised to complete a four-year
permitting process at the Federal Energy Regulatory Commission
(FERC).
New York based Verdant Power is undergoing licensing
at FERC and deployed two of six units of a tidal/current
project located in the East River of New York in December 2006.
Verdant Power, Inc. is in the process of deploying four more
turbines scheduled for completion early May of 2007. These
units will supply power to two commercial customers on
Roosevelt Island imminently, once all regulatory clearances
have been obtained.
New Jersey based Ocean Power Technologies (OPT) has
operated a test wave energy buoy off the coast of Hawaii for
the U.S. Navy. It has also operated a buoy off the coast of New
Jersey funded by Board of Public Utilities since 2005 and in
July 2006, filed a preliminary permit for a commercial wave
farm at Reedsport, off the coast of Oregon.
ORPC Alaska, owned by Ocean Renewable Power Company
(ORPC) of North Miami, Florida, recently secured Preliminary
FERC permits for two sites in Alaska. ORPC Maine, also owned by
ORPC, has applied for, and anticipates receiving very soon
Preliminary FERC Permits for two sites in Maine. ORPC also has
six Preliminary FERC Permits for sites off the east coast of
Florida.
Australian based Energetech, recently renamed to
Oceanlinx Ltd, has formed a subsidiary in Rhode Island which
has received funding from the Massachusetts Trust Collaborative
and has planned a 750 kW project for Port Judith Rhode Island.
Permitting has not yet commenced.
Multiple permits for sites in Maine, California,
Oregon, Alaska and Florida have been filed with the Federal
Energy Regulatory Commission.
The Mineral Management Service (MMS) now has
authority to lease lands for offshore wind projects on the
Outer Continental Shelf. MMS has conducted environmental review
of the proposed 420 MW Cape Wind Farm off the coast of
Nantucket, MA and LIPA/FPL 100 MW project off the coast of Long
Island, NY.
Status of Ocean Renewable Projects Overseas
In Europe, projects are moving ahead. Europe has already installed
587 MW of offshore wind in Denmark, Holland, Scotland, England and UK.
See http://www.bwea.com/offshore/worldwide.html
Two near-shore wave projects, are operating in Scotland and Isle of
Azores. Pelamis of OPD in Scotland is deploying the world's first
commercial wind farm off the coast of Portugal and Marine Current
Turbines has operated a prototype tidal project for two years.
Q3. What is the consumer price, per kWh, of ocean generated
electricity. What are the projections for reduction in that price.
Naturally, costs vary with the type of technology. The MMS
Whitepaper on Offshore Wind states that where once the cost of offshore
wind was around forty cents/kWH, over the past twenty years, costs have
dropped to between four and six cents/kwh. By 2012 and beyond, DOE
envisions five MW and larger machines generating power for five cents/
kWh.
Cost estimates are more difficult for wave and tidal, which in
contrast to offshore wind, lack operational history. For wave, costs
have been estimated as between nine and 16 cents/kWh, far more
favorable than the 40 cents/kWH that offshore wind cost ``out of the
box.'' For in-stream tidal, the EPRI reports predicted costs as low as
six to nine cents/kWH because tidal power's similarities to wind allow
it to benefit from the advancements already made by wind and
potentially share economies of scale.
And, the costs of offshore wind or wave are stable. Whereas natural
gas and oil have fluctuated over the years (with natural gas now higher
than ever), offshore wind and wave energy costs are stable, since the
cost of renewable power sources like wind or wave are free. The analogy
here is that the cost to consumers for renewable energy, free from the
fluctuating costs of fuel, functions like a fixed-rate mortgage as
opposed to a variable rate mortgage associated with the use of finite
fossil fuel resources.
Also, costs are expected to decline as the industry matures and as
economies of scale make ocean projects less costly. As the offshore
wind industry makes advancements on mooring systems, turbine durability
and other issues that bear on the cost of marine projects, these
advancements will help bring down the cost of other ocean energy
technologies. In addition, if we can gain a better assessment of our
resources, we can target the most powerful sites first and learn from
our experience in these locations to bring costs down further.
It is important to note that non-technology costs associated with
these types of projects will also be reduced as the industry matures.
These include insurance and financing, as well as much needed and
anticipated regulatory and permitting reform.
Q4. Is the United States behind other countries in the development of
the technology? Is this a result of a lack of federal investment?
Yes, the United States has fallen behind countries like Scotland,
Portugal, Norway, and others; however, we are on a track to quickly
regain a leading position. Portugal offers a =.235/kWH [equivalent to
nearly $.32 (U.S.) ] feed-in tariff. Compare this to the U.S., where
the wind industry receives approximately $.019/kWH. and ocean
renewables receive nothing. Britain pays substantial incentives
including capital cost reimbursements of 25 percent. The United States
needs to match these foreign incentives in order to attract and retain
world class technology developers.
Permitting and regulatory obstacles are tremendous disincentives to
companies developing ocean renewable projects in the United States, as
well. While other countries have adopted permitting and regulatory
regimes that appear to be more efficient, the United States is still
struggling with exactly how to permit and regulate these technologies.
Q5. What kind of technological obstacles remain to the commercial
viability of ocean power?
Advances in a number of other sectors have benefited the marine
renewable industry sector including advanced materials, turbine design,
and offshore construction. Listed below are the present day R&D
requirements to support the development of marine and hydrokinetic
technologies in the United States.
R&D Needs for the Ocean Renewable Energy Sector
(1) developing and demonstrating marine and hydrokinetic renewable
energy technologies;
(2) reducing the manufacturing and operation costs of marine and
hydrokinetic renewable energy technologies;
(3) increasing the reliability and survivability of marine and
hydrokinetic renewable energy facilities;
(4) integrating marine and hydrokinetic renewable energy into electric
grids;
(5) identifying opportunities for cross fertilization and development
of economies of scale between offshore wind and marine and hydrokinetic
renewable energy sources;
(6) identifying the environmental impacts of marine and hydrokinetic
renewable energy technologies and ways to address adverse impacts, and
providing public information concerning technologies and other means
available for monitoring and determining environmental impacts; and
(7) standards development, demonstration, and technology transfer for
advanced systems engineering and system integration methods to identify
critical interfaces.
Specific R&D tasks
Wave Power
1. Technology road mapping
2. Resource characterization--Data and models to identify ``hot
spots''
3. Hydrodynamics--mathematical and physical modeling including arrays
(especially non-linear and real fluid effects)
4. Control systems and methods for optimum performance (while
ensuring survivability)
5. Power take off systems/smoothing especially direct drive
6. Materials--low cost
7. Materials, corrosion and biofouling
8. Construction methods--low cost
9. Performance specification standardization and test verification
10. Low cost moorings/deployment/installation/recovery methods
11. Ultra high reliability components (for minimum maintenance cost)
12. Electrical grid connection
13. System configuration evaluations (which are best under what
circumstances)
14. Module size versus cost of electricity sensitivity
15. Results from pilot tests (especially to reduce cost and
environmental impacts uncertainty).
Tidal Power
1. Technology road mapping
2. Resource characterization - Data and models to identify ``hot
spots'' given complex bathymetry and turbulence
3. Hydrodynamics--mathematical and physical modeling including arrays
(especially non linear and real fluid effects) and an evaluation of the
efficacy of diffusers (i.e., ducted water turbine)
4. Control systems and methods for optimum performance
5. Power take off systems/smoothing especially direct drive
6. Materials--low cost
7. Materials, corrosion and biofouling
8. Construction methods--low cost
9. Performance specification standardization and test verification
10. Low cost moorings/deployment/installation/recovery methods
11. Ultra high reliability components (for minimum maintenance cost)
12. Electrical grid connection
13. System configuration evaluations (which are best under what
circumstances)
14. Module size versus cost of electricity sensitivity
15. Results from pilot tests (especially to reduce cost and
environmental impacts uncertainty).
Q6. What can Congress and/or the Federal Government do to help move
the technology forward? Is there a role for federal support for R&D?
Why is federal spending necessary?
The first thing Congress can do is pass designed to accomplish the
following:
--More funding for R&D and technology development: Wind energy has
benefited from substantial government investment. Thirty years ago,
wind cost 30 cents/kWH to generate; today, that cost stands at three to
seven cents/kWH. And even today, DOE continues to invest in wind. Just
a few months ago, DOE announced a $27 million partnership with GE to
develop large-scale turbines and also issued a $750,000 SBIR to
Northern Power for offshore wind technology development.
Private developers have borne the costs of bringing the ocean
energy technology forward for the past thirty years, but they need
government support. Government funding will also give confidence to
private investors and help attract private capital.
--Resource Assessment: At present, we do not even know the full
potential of offshore renewables, because no agency has ever mapped the
resource comprehensively. The Energy Policy Act of 2005 directed the
Secretary of DOE to inventory our renewable resources but that work has
never been funded. And even as MMS moves forward with a rule-making for
offshore renewables on the OCS, it has not received appropriations to
map the resource.
Preliminary studies done by EPRI and private companies show that we
have substantial ocean resources. But we will not know the full scope
without further mapping and study.
--Incentives for Private Investment: Offshore renewables are
compatible with other large industries in our country, such as oil and
maritime industry. These industries, with the right tax incentives, can
provide substantial support to offshore renewable development.
Incentives could include investment tax credits for investment in
offshore renewables and incentive to use abandoned shipyards and
decommissioned platforms for prototypes and demonstration projects.
--Incentives for coastal communities: Coastal municipalities stand
to gain tremendously from installation of offshore renewables. They
need to be stakeholders in the process with a voice in development that
takes place off their shores. Congress can support this by continuing
to authorize Clean Renewable Energy Bonds (CREBS) and the Renewable
Energy Portfolio Incentives (REPI) for coastal projects.
--Reduced regulatory barriers: Until companies get projects in the
water, we will not learn about the environmental impacts or true costs
of offshore renewables. Unfortunately, developers face onerous barriers
to siting small, experimental projects. We should establish streamlined
regulation and permitting for offshore renewables, with maximum
cooperation between State and federal agencies.
Conclusion
Development of a robust offshore renewables industry can:
Reduce reliance on foreign oil
Rely upon ocean terrain for power generation as
opposed to onshore land resources
Revitalize shipyards, coastal industrial parks and
shuttered naval bases
Create jobs in coastal communities
Allow the U.S. to transfer technology to other
countries, just as a country like Scotland is exporting its
marine renewables know-how
Provide low cost power for niche or distributed uses
like desalination plants, aquaculture, naval and military
bases, powering stations for hybrid vehicles and for offshore
oil and gas platforms
Provide use for decommissioned oil platforms through
``rigs to reefs program''
Promote coastal planning that reflects the goals of
biodiversity, that maximize best comprehensive use of resources
and capitalizes on synergies between offshore industries.
Is the resource there? Yes, and the resource is located near highly
populated areas on the coast, placing fewer demands on already taxed
transmission infrastructure. The United States cannot afford to ignore
Ocean renewables can help diversify our energy portfolio and
improve our environment. With the proper support, these resources will
become a robust part of a reliable, affordable, clean electric supply
portfolio.
Biography for Sean O'Neill
Sean O'Neill is co-founder and President of the Ocean Renewable
Energy Coalition where he serves in a leadership role for all
activities and is responsible for all federal legislative and
regulatory issues impacting OREC members. He is also founder and
principal of Symmetrix Public Relations & Communication Strategies
where he serves the non-profit, energy, and human resources industries.
Prior to founding Symmetrix, Mr. O'Neill served as Director of Public
Affairs for U.S. Generating Company from 1993 to 2001. He has directed
communications and public affairs programs in eighteen states
supporting the development of over 8,000 megawatts of electric power
generation. He has served numerous non-profit and non-governmental
organizations in developing programs to encourage the development of
ocean renewable technologies, electric industry deregulation, water
conservation, municipal solid waste management and public safety
contributing to broad public policy changes at State and federal
levels, increased water and energy conservation, recycling, and seat
belt use.
He has a Masters in Public Communications from American University
where he has served on the adjunct faculty and holds an A.B. degree in
English from Columbia College in New York.
Chairman Lampson. Thank you, Mr. O'Neill.
Mr. Greene.
STATEMENT OF MR. NATHANAEL GREENE, SENIOR POLICY ANALYST,
NATURAL RESOURCES DEFENSE COUNCIL
Mr. Greene. Mr. Chairman, esteemed Members of the
Committee, thank you very much for having me here today. My
name is Nathanael Greene. I am a senior policy analyst with the
Natural Resources Defense Council. I spent a lot of time trying
to think of a good joke that bridges geothermal and ocean
energy but I just couldn't come up with one. So I will just
leap right in here.
I think it is very appropriate that Congressman McNerney
raised the history of the wind energy industry, onshore wind
energy industry association. I think if we look at that, we can
see one of the main points that I would like to talk about
today, which is why when we do research and development, it is
important to include the environmental impacts and study the
baseline environmental conditions, the ecosystem conditions,
the environmental interactions of the technologies that we are
looking at. We are now at the fortunate stage in the onshore
energy industry that we are seeing a lot of concentration of
projects in certain parts of the country and so states have
started to come together individually and as groups to really
try to understand what the cumulative impacts of large-scale
development will be, and I think as we look forward to
expanding these technologies and NRDC certainly comes at these
two technologies in reviewing these two bills with the hope
that we can make these technologies large-scale contributors to
our energy mix. But as we come at them, we need to think not
just about what one project will look like, or what one pilot
installation will look like, but what many projects will look
like. Particularly in the ocean technologies, which are tapping
an energy source that is generally less dense than, say, a
fossil fuel or even some of the other renewable energy
resources, the individual installation may just be one of
hundreds of individual pieces of equipment that make up a
single project. When you are looking at multiple projects in
some areas, you may be looking at many, many pieces of
equipment. So thinking about cumulative impact from the get-go
is absolutely critical.
Similarly, in the wind energy industry association and the
history, we can see the really significant impacts of an early
black eye in the development of the industry. If you look out
in California with the Altamont Pass project and the history of
that project and its impacts particularly on endangered bird
species, they have created at least two decades of slowdown in
the development of that industry and questions around the
development of that industry that could have been avoided if we
had done more research and development, understood better what
the interactions of wildlife and technology were from the get-
go, and instead of developing some of our first projects in
very sensitive areas, found better places where there were
still good resources but fewer potential impacts, we might have
been able to avoid that whole diversion and unfortunate
slowdown in the industry.
And the last point I would like to make is really about the
permitting. Building this baseline of information, the
consensus between regulators, the public, and the industry
about what are the real, valid environmental concerns and what
are the red herrings--the issues that are just distracting us
in the permitting process--can really help an open and
transparent regulatory process and speed up permitting without
giving up the important aspects of permitting to really guide
the industry towards responsible development.
So building on that basic recommendation, particularly in
the geothermal research and development act that we are looking
at today, I think it is very important that we call out looking
at environmental studies and environmental impacts. The ocean
thermal energy act has a particular section on that. I think it
is something I would recommend the Committee consider adding to
the geothermal act. A lot of making sure that that sort of
research done unfortunately is going to fall back on you in
your oversight as the research and development actually occurs
because you can't micromanage that from this stage, so I would
encourage you particularly to look, and encourage the
implementing agencies to look, at high-resources areas. Let us
really focus our dollars, build baselines so we can really
understand not just what the actual potential is but in these
high-resource areas, what is the baseline ecosystem, and it
helps us not just site an individual project, which will need
to have that information as they go through the siting process,
but also start to allow us to think about what the cumulative
impacts will be of multiple projects, and similarly, to
recognize that because these technologies are basically in
their nascency right now, there are a lot of unknowns around
how these technologies will interact with the environment. I am
sure there is a known unknown joke here but I am not going to
make that one.
We need to through the environmental research and
development and really try to narrow the questions that we
cannot answer at this point, characterize those issues as
close, as specifically as we can so that they don't act as
bottlenecks in the permitting process, and then study them
extensively in the lesson-learned stage after we build the
first projects. Particularly I would call out the need and the
role that this research and development plays in a critical
permitting tool which we need to develop much more extensively
now and especially for these new technologies, which is
adaptive management. If we can't figure out a way to permit
projects without perfect information, we are going to see a
real resistance on the part of the public to seeing these
technologies go forward, but if we can figure out a way to
allow the projects to go forward but also change the management
if unanticipated impacts start to develop, we can speed the
process up.
On the specific technologies, the enhanced geothermal
systems, very exciting but also very much unknown. I don't
think that there are likely to be huge impacts there. I am not
anticipating that but again, if we don't study it, that
uncertainty will act as a break and so focusing research and
development dollars there to build that consensus is absolutely
critical.
Another point I would draw just between the environmental
impacts and the technology research and development around
geothermal is the critical need to improve the efficiency of
those systems, the total thermal efficiency. The more we can
actually capture of the geothermal energy, the fewer projects
we ultimately need to build to develop any certain amount of
energy.
On the ocean side, again to recognize that we are dealing
with a relatively unique environment, thinking now about the
cumulative impacts and the consensus is absolutely critical.
Thank you for your time.
[The prepared statement of Mr. Greene follows:]
Prepared Statement of Nathanael Greene
Summary
General
Carve out federal research and development (R&D)
dollars for independent studies of environmental impacts to 1)
understand the cumulative impacts of large scale deployment of
these ocean and geothermal energy technologies, 2) avoid early
public black-eyes that will set the industry back years, and 3)
support an open and transparent permitting and regulatory
process by building consensus among regulators, the public, and
industry around the environmental benefits and impacts of real
concern.
Look at regions with resources that have high energy
production potential and build baseline data on the nature of
the resource and the ecosystems in place that surround the
resources.
Use the baseline data and analogous technologies to
narrow and bound unknowable potential environmental impacts.
Focus ``lessons learned'' studies on the areas of
greatest environmental uncertainty.
Use these studies to inform adaptive management
strategies so that projects can proceed in the face of the real
uncertainty surrounding some impacts and also still be eligible
for private sector financing.
Consider a federal fund to support the more extensive
potential adaptive management options including removal for the
first few projects.
Utilize early successes in this approach as test
cases for future, more large-scale deployment initiatives.
Geothermal Energy
Include independent R&D on the environmental impacts
of geothermal technologies in the Advanced Geothermal Energy
Research and Development Act of 2007.
Build consensus among regulators, the public, and
industry around the real environmental impacts and ways to
avoid, manage, and mitigate these impacts so that the
technologies can be deployed as quickly as possible.
Ensure that studies cover the environmental impacts
of enhanced geothermal systems and of the cumulative effects of
multiple large-scale projects in the same region.
Ensure that technology R&D covers improving the
thermal efficiency of geothermal systems to maximize the
potential energy that can be captured and minimize the number
of projects that need to be developed.
Ocean and Hydrokinetic Energy
Focus federal R&D dollars on studies of a few regions
with high resource potential, study other manmade installations
in oceans, rivers, and lakes in order to anticipate impacts of
ocean and hydrokinetic technologies, and prioritize post-
installation lessons' learned studies.
Require access for independent pre- and post-
installation environmental studies as part of eligibility for
any federal subsidies.
Ensure that studies address the cumulative impact of
multiple projects and of multiple installations within one
project.
Exclude offshore wind from the Marine Renewable
Energy Research and Development Act of 2007 except to study
offshore wind projects to learn lessons that may inform other
projects and as part of regional cumulative impact analyses.
FERC should work with State and federal natural
resource management agencies to do a programmatic environmental
impact statement for the licensing of new hydrokinetic
technologies.
Regional studies should help build consensus around
areas that are best suited for early development and those that
should be avoided at least until the potential impacts of the
technologies are much better understood.
Introduction
Thank you for the opportunity to share my views on geothermal,
ocean, and hydrokinetic energy technologies, the environmental pros and
cons of these important sources of renewable energy, and the
environmental issues related to these technologies that should be
addressed in the context of federally supported research and
development. My name is Nathanael Greene. I'm a senior policy analyst
for the Natural Resources Defense Council (NRDC) and one of our main
experts on renewable energy technologies. NRDC is a national, nonprofit
organization of scientists, lawyers and environmental specialists
dedicated to protecting public health and the environment. Founded in
1970, NRDC has more than 1.2 million members and online activists
nationwide, served from offices in New York, Washington, Los Angeles
and San Francisco.
Mr. Chairman and esteemed Members of this committee, as you know,
U.S. energy policy needs to address three major challenges: reducing
global warming pollution, providing affordable energy services that
sustain a robust economy, and increasing our energy security. Renewable
energy technologies including geothermal, ocean, and hydrokinetic
energy can play a critical role in meeting these goals, and these
technologies have the potential for dramatically increased deployment
over the coming decades. These sources of energy can be used to produce
electricity and thermal energy with little or no global warming
pollution or local or regional air pollution, and they draw on domestic
energy sources that are naturally replenished and do not vary in cost.
By using these technologies we avoid burning fossil fuels, particularly
coal and natural gas and to a lesser degree oil. The heat-trapping
gases released when we burn these fuels make the power sector the
largest single source of global warming pollution. These fuels are also
responsible for other significant environmental and public health
impacts during mining, drilling, processing, and combustion, and they
expose our economy to price volatility and energy insecurity.
All energy technologies cause some environmental damage. Being
better than fossil fuels is a necessary condition, but hardly
sufficient. Independent research and development focused on the
environmental characteristics of these technologies is critical to
maximizing their positive impacts and to avoiding, managing, and
mitigating their negative ones. Good R&D on the environmental impacts
is also critical to an open and transparent permitting process and in
building a constructive relationship between regulators, the public,
and the industry so that these technologies can be deployed in a manner
that is quick, efficient and responsible.
General Comments Relevant to Both Families of Technologies
The environmental impacts of renewable technologies such as
geothermal, ocean and hydrokinetic energy must be considered in the
context of the detrimental alternative outcomes if we choose to not
actively deploy these technologies. Most of the traditional energy
sources (e.g., coal, natural gas, oil) ensure a far different and
potentially much more devastating environmental future. Meeting our
energy service needs through improved energy efficiency is the fastest,
cleanest, cheapest option, but even the most efficient technologies
require some energy to operate. Outside of the transportation sector,
if we're not using renewable energy then chances are we're using coal,
natural gas, and nuclear power and some oil primarily for heating.
The consequences of not moving away from these traditional fuels to
energy efficiency and renewable energy are severe, and impact almost
every aspect of the environment and public health. None of these
consequences are ultimately more urgent than reducing global warming.
The recent Intergovernmental Panel on Climate Change report concluded
that there was at least a 90 percent chance that heat-trapping
pollution was the main cause of warming since 1950. The science is
clear: global warming is real, it's already occurring, and we're
responsible for it. We can avoid catastrophic damage, but only if we
start reducing our rate of pollution seriously within the next 10 years
and achieve 60 to 80 percent reductions by 2050.
This is where renewable energy technologies such as geothermal,
ocean, and hydrokinetic energy can be so beneficial. The heat-trapping
gases emitted during combustion of fossil fuels make the power sector
the largest single source of global warming pollution. Developing
geothermal, ocean, and hydrokinetic energy, as part of a renewable
energy portfolio, is a vital step towards replacing a significant
amount of the fossil fuel-generated power. Moreover, there is a
domestic argument as well. The United States is the largest emitter of
heat-trapping gases, causing 25 percent of global warming despite
having just four percent of the world population. Geothermal, ocean,
and hydrokinetic energy are domestic renewable energy sources that can
reduce our carbon footprint globally, and encourage other countries to
do the same.
Of course, no energy technology is without environmental impacts,
and simply being better than fossil fuels is a little like being better
than a poke in the eye--it's a necessary but not sufficient aspect of a
truly sustainable energy mix. Studying the environmental
characteristics of renewables serves two critical purposes: 1) it
allows us to identify, avoid, manage, and mitigate the real
environmental impacts of renewable energy technologies; and 2) it
builds a constructive relationship between regulators, the public, and
industry that focuses on the real impacts and not ``red herring''
issues that have limited impact and can obstruct the deployment of
strong projects. Taken together these outcomes are needed to allow for
the best public review and permitting process.
Ocean energy is currently used to produce just a few megawatts and
geothermal just a few thousand megawatts of energy, in spite of the
fact that both families of technologies could easily be scaled up to
produce tens of gigawatts within the next few decades. However, the
relative infancy of these technologies presents two important
challenges. First to understand the real sustainability of the
technologies, it is insufficient to look at the impacts from a single
project. We must also study the cumulative impact of these technologies
brought fully to scale, and lay out our vision of what we want these
industries to ultimately become. Second, both families of technologies
are particularly vulnerable to major setbacks that could stifle growth
if early projects become notorious environmental failures.
In the context of federal research and development legislation, we
should focus on two types of environmental risks to understand the
cumulative impacts and avoid early public black-eyes. The first type of
risk involves impacts that we can predict with increasing accuracy with
greater experience and data collection. An example of this type of risk
would be determining the chance of whales being hurt by the sounds of
construction. The more we learn about whales' habits in the region of
the project, and what effective mitigation measures we can take to
avoid and minimize impacts on whales, the more we can quantify the
probability of whales being affected by project construction.
The second type of risk involves impacts that we cannot predict
because they result from new types of interaction that simply have
never occurred before. An example of this type of risk would be how a
geofluid would spread when introduced into a hot-dry rock geothermal
heat source to create an engineered aquifer. Another example would be
how fish might adapt to underwater turbines in a river. These would be
first-of-a-kind interactions and the probability of the possible
impacts is fundamentally unknowable.
We can address the first kind of risk by building a detailed
understanding of the baseline conditions in the area of a potential
project. Unfortunately, given that many species may pass through a
given part of the ocean or land only during certain seasons, developing
this database may significantly slow a proposed project. If, instead of
studying the baselines on a project-by-project basis, we identified a
few regions with high resource potential, and focused federal R&D
dollars on building the necessary baseline data in those areas, we
could facilitate the permitting of individual projects. This would help
us develop a better understanding of what the cumulative impacts might
be in a region where multiple projects are likely.
Research and development dollars can also help narrow and bound the
uncertainty associated with unknowable risks. For instance, if we were
considering a certain type of ocean thermal technology, previously
collected baseline data would allow us to conclude that a project in
that region of the ocean would have a very low chance of interacting
with endangered or at-risk fish populations. Further study of similar
equipment coupled with modeling the worst-case scenarios might allow us
to conclude that even the development of multiple projects would be
very unlikely to have any significant impacts of the fish populations.
In other words, even for unknowable risks associated with putting new
technologies into new conditions, federal R&D can help build consensus
around the issues of greatest potential concern and those that are very
unlikely to impose significant restraints.
Of course this type of work should be followed with ``lessons
learned'' studies to help avoid, manage, and mitigate future impacts
and provide more information to help narrow and bound other unknowable
risks. Indeed, given the much higher level of uncertainty surrounding
these technologies, the lessons learned from each project during
operation should be used to update the management of future projects,
and the conditions of future permits, especially during the early
development stage of each industry. In particular these studies should
be used to inform adaptive management requirements in permits. Adaptive
management requirements establish a process for changing a project
operations and equipment configuration to avoid or reduce environmental
impacts that are larger than anticipated. This is a critical tool for
allowing projects proceed when there is a level of uncertainty around
impacts that would be unacceptable if the projects' management
strategies are fixed over time.
Further research on the potential environmental impacts associated
with these nascent renewable technologies is needed to support adaptive
management permitting requirements. Given the limits on our ability to
establish baseline data and the unknowable risks associated with new
technologies in new conditions, regulators must be able to require
projects to adapt their management to address unacceptable levels of
impacts (that may not appear at present). The baseline data and studies
to narrow and bound unknowable risks will be critical to identifying
unacceptable levels of impacts (e.g., is the line crossed at one bird
or fish or caribou or one hundred?) and what alternative management
options are possible.
Making adaptive management work is not only important from the
environmental perspective; it is also critical to making projects
acceptable for private sector financing. Lenders and investors will not
support projects that face potentially significant costs or lost
capacity as a result of management being forced to avoid or manage an
unforeseen impact. Developing a clear, transparent permitting process,
that includes State and federal agency input in developing adaptive
management requirements, will also help attract private funding.
Indeed, given the importance of adaptive management to making some
first-of-a-kind projects acceptable from an ecological and public
health risk perspective, and the challenge that some adaptive
management options might pose to a project's financing, the Federal
Government could play an important facilitating role in ensuring
geothermal, ocean, and hydrokinetic energy deployment. The government
could create a fund that covers a portion of the costs associated with
the most extreme and expensive changes in management that might be
necessary for early projects. For example, if there is a very small
chance that geofluid could leak from an engineered aquifer into ground
water or to the surface, but such a leak would require the project to
immediately cease operations, the Federal Government could help insure
against such a risk for the first few projects. I recognize that this
specific recommendation is beyond the scope of R&D legislation, but the
types of studies I have discussed above would help identify and limit
the conditions where this type of fund would be necessary.
Recommendations
Carve out federal research and development (R&D)
dollars for independent studies of environmental impacts to 1)
understand the cumulative impacts of large scale deployment of
these ocean and geothermal energy technologies, 2) avoid early
public black-eyes that will set the industry back years, and 3)
support an open and transparent permitting and regulatory
process by building consensus among regulators, the public, and
industry around the environmental benefits and impacts of real
concern.
Look at regions with resources that have high energy
production potential and build baseline data on nature of the
resource and the ecosystems in place that surround the
resources.
Use the baseline data and analogous technologies to
narrow and bound unknowable potential environmental impacts.
Focus ``lessons learned'' studies on the areas of
greatest environmental uncertainty.
Use these studies to inform adaptive management
strategies so that projects can proceed in the face of the real
uncertainty surrounding some impacts and also still be eligible
for private sector financing.
Consider a federal fund to support the more extensive
potential adaptive management options including removal for the
first few projects.
Utilize early successes in this approach as test
cases for future, more large-scale deployment initiatives.
Geothermal
Geothermal energy is a particularly attractive source of renewable
energy because it can serve as baseload power (e.g., provide steady
electricity on a consistent and predictable basis). This gives it the
potential to displace some of the dirtiest power generation--coal-fired
baseload power. Direct use of geothermal heat and geothermal heat-pump
technology also allows industry, commercial, and residential buildings
to avoid natural gas and oil that are currently used for heating and
cooling needs.
There are already an important number of geothermal projects in
operation today, but the next 10 to 15 years could easily see a ten-
fold increase in deployment. In addition, enhanced geothermal systems
represent a new technology and an area of significant potential growth.
As a result, it is important that the R&D bills under consideration by
the Subcommittee be amended to explicitly require research and
development related to the potential environmental impacts of
geothermal development along the lines discussed above.
For the traditional geothermal technologies, R&D would help
especially in terms of building consensus among regulators, the public,
and industry around the most significant environmental impacts. It
could also prove useful in determining which impacts are ``red
herrings'' that might need to be monitored, but don't need to be a
focus of concern. However, it is important to recognize that many
geothermal resources are remote from demand centers and thus land-use
impacts will grow considerably with cumulative development of multiple
projects in the same region.
Beyond the traditional geothermal technology, the enhanced
geothermal systems are an entirely new area for development and thus
even more in need of R&D on their potential environmental impacts.
Particular care must be taken that the geofluids injected to bring the
geothermal energy to the surface do not escape the targeted heat
reservoir and contaminate drinking water or reach the surface in an
uncontrolled manner. Research into the steps necessary to avoid this
and to understand the potential impacts of such an escape if it
occurred would increase the comfort-level with this new technology.
For all classes of geothermal technologies, a key area of
technology R&D that overlaps with siting-related environmental impacts
is work to improve the thermal efficiency of the technologies. The
efficiency of current projects is unfortunately low. Doubling this
would cut in half the number of projects necessary to achieve a given
level of energy production.
Recommendations
Include independent R&D on the environmental impacts
of geothermal technologies in the Advanced Geothermal Energy
Research and Development Act of 2007.
Build consensus among regulators, the public, and
industry around the real environmental impacts and ways to
avoid, manage, and mitigate these impacts so that the
technologies can be deployed as quickly as possible.
Ensure that studies cover the environmental impacts
of enhanced geothermal systems and of the cumulative effects of
multiple large-scale projects in the same region.
Ensure that technology R&D covers improving the
thermal efficiency of geothermal systems to maximize the
potential energy that can be captured and minimize the number
of projects that need to be developed.
Ocean and hydrokinetic energy
There are three reasons that study of the environmental impacts of
ocean and hydrokinetic energy is particularly important: 1) the
technology is in a nascent stage of development with only a few pilot
scale projects in operation around the world; 2) due to the diffuse
nature of the energy resource in the ocean and moving water, this
family of technologies necessarily requires many pieces of equipment
spread out over great distances to capture traditional electric
utility-scale amounts of electricity; and 3) the oceans are prized for
their open vistas, importance in the global ecosystem, and are
particularly vulnerable to global warming.
As recommended above, R&D looking at the environmental impacts of
this family of technologies should focus on a few regions with
especially high resource potential, ideally for multiple technologies.
Studying the ecosystems of oceans, rivers, and lakes is obviously a
complicated and time-consuming process. Furthermore because so much is
unknown about the interaction of wildlife with the various technologies
being developed to capture ocean and hydrokinetic energy, special
effort should be made to find other man-made infrastructure that can
give us insights into the potential impacts. The novelty of the
technologies makes post-installation studies of impacts and adaptive
management even more important.
Of course the novelty of the technologies also creates
understandable concerns from project developers about allowing
scientists access to proprietary information regarding system design.
However, these concerns should not be allowed to hinder pre- and post-
installation studies. Access for independent environmental research and
development should be a prerequisite for any federal support.
The idea of cumulative impacts takes on even greater importance in
the context of ocean and hydrokinetic technologies. Not only should
studies consider the impacts associated with multiple projects,
initially, they should develop an understanding of the cumulative
impacts of the multiple pieces of equipment being installed within the
bounds of one project. Utility scale projects are likely to require
more than one hundred individual generators. In a river, lake, or in
certain parts of the ocean, the cumulative impacts of this many pieces
of equipment could be dramatically different than the impacts of just
one or two generators.
The only exception to the newness of this family of technologies is
offshore wind energy. Given the more mature nature of this technology
it is appropriate that offshore wind be generally not included in the
Marine Renewable Energy Research and Development Act of 2007. The only
area where offshore wind should be explicitly included is in lessons'
learned studies and studies that build baseline data on regions with
high ocean energy resources. Offshore wind energy projects could be an
important source of information about energy project development and
thus should be considered as part of post-construction studies of
impacts. Also to the extent that regions are picked due to their having
high resource value, the environmental effects of wind power should be
considered in impact studies, as wind projects could contribute to the
cumulative impacts concept described above.
Lastly, federal R&D should recognize the unique nature of our
oceans, rivers, and lakes. They provide unique ecosystem services, they
are used differently than land from both a commercial and recreational
perspective, and they are extremely vulnerable to global warming. As a
result of these differences, the policies and procedures for access for
renewable energy projects are still being developed. The Minerals
Management Service has taken the important step of conducting a
programmatic environmental impact statement on its offshore energy
permitting process. The Federal Energy Regulatory Commission should
work with state and federal natural resource management agencies to do
the same with new hydrokinetic technologies. On land, many individual
states and some collections of states, which are anticipating
significant wind power development, have taken the valuable step of
conducting resource mapping to identify both productive sites and
places that projects simply should not be developed. Ocean and
hydrokinetic energy may be too new for studies to offer anything other
than preliminary guidance, but that is an important first step and only
highlights the need to get started with environmental impact R&D now.
Recommendations
Focus federal R&D dollars on studies of a few regions
with high resource potential, study other manmade installations
in oceans, rivers, and lakes in order to anticipate impacts of
ocean and hydrokinetic technologies, and prioritize post-
installation lessons' learned studies.
Require access for independent pre- and post-
installation environmental studies as part of eligibility for
any federal subsidies.
Ensure that studies address the cumulative impact of
multiple projects and of multiple installations within one
project.
Exclude offshore wind from the Marine Renewable
Energy Research and Development Act of 2007 except to study
offshore wind projects to learn lessons that may inform other
projects and as part of regional cumulative impact analyses.
FERC should work with State and federal natural
resource management agencies to do a programmatic environmental
impact statement for the licensing of new hydrokinetic
technologies.
Regional studies should help build consensus around
areas that are best suited for early development and those that
should be avoided at least until the potential impacts of the
technologies are much better understood.
Biography for Nathanael Greene
Nathanael Greene is a senior energy policy specialist working on
issues including utility regulation, renewables, energy taxes and
energy efficiency. He has particular expertise in biofuels, biopower,
wind and small, clean-generating technologies such as fuel cells, as
well as the State and federal regulations and policies to promote these
technologies. Nathanael received a Bachelor's degree in public policy
from Brown University and a Master's in energy and resources from the
University of California at Berkeley.
Discussion
Chairman Lampson. Thank you for your explanation.
Past Funding Cuts to Geothermal Energy Research
At this point we will start the first round of questions,
and the Chairman will recognize himself for five minutes. I
want to start with Dr. Tester and Mr. Thomsen.
The Administration, through the Office of Management and
Budget, has attempted to justify terminating DOE's geothermal
technology program by saying research supported by the
geotechnology program has contributed to reduced costs of
geothermal power to the point that it is now a mature
technology. Can you respond to that statement, both of you, and
is geothermal power a ``mature technology''?
Dr. Tester. Let me try to begin. In this, I think it is
necessary to separate substance from semantics in the OMB
decision. I have been having a lot of trouble understanding
their rationale for the decision that they made in calling
geothermal technology mature. If I assume that they are
thinking of geothermal as a single technology, then I think
they are flawed in their analysis. Geothermal is a resource.
Like other mineral resources such as oil and gas, it has a
variety of grades and there is always room and important room
for improvement. As we just heard this morning and I think we
pointed out in our assessment, we are using such a small
fraction of the available geothermal resource right now that it
would be--can hardly be regarded as a mature technology.
Mr. Thomsen. Mr. Chairman, I would like to add to that. The
first point I would like to add or make is that we have never
seen an analysis for that recommendation, that this technology
has become mature. Being unable to define what mature is, it
makes it a bit of an ambiguous mark to find and describe. I
would like to echo what Dr. Tester said and say that geothermal
is a resource. It is utilized and captured by a suite of
technologies and we have hydrothermal technologies which are
slightly more mature, we have technologies like EGS that
haven't been commercialized. H.R. 2304 looks at specifically
those heat-capturing technologies that haven't been
commercialized and are not mature and says what we can do to
better capture this resource, and so I think if I were to come
to the defense of OMB I would say that they mischaracterized
geothermal as a single technology and not a resource and we
need to do everything we can to utilize all of the technologies
in our suite to capture this great domestic resource.
Chairman Lampson. Thanks.
Geo-pressured Resources
Dr. Tester, can you please describe geo-pressured resources
and their potential? I understand they are particularly
prevalent in my corner of the world, the Gulf Coast of Texas.
Should this geothermal legislation contain a provision to
specifically address that resource?
Mr. Tester. Geo-pressured resources are, as you have
pointed out, largely in the Gulf Coast area of the United
States. They have three features to them that make them
attractive: high temperatures, the presence of dissolved
methane and also relatively high pressures. I would classify
them in this continuum of geothermal resources as we have
talked about from today's very high-grade systems that we
utilize in the West that are liquid- or vapor-dominated systems
across the full spectrum to very low-grade systems in the East.
So geo-pressured is in there. There are others as well that
also would be relevant to discuss today including co-produced
fluids and things like that. Whether they should be explicitly
pointed out in the bill I think is a matter for consideration
but if the bill is written generally enough, and I think it is
now, they would be considered part of that continuum, in my
view.
Chairman Lampson. Thank you.
U.S. Army Corps of Engineers and Ocean Power Technologies
Dr. von Jouanne, is the Corps of Engineers involved at all
in any of your research?
Dr. von Jouanne. The U.S. Army Corps of Engineers is key in
the regulatory process and so we have filed permits for ocean
demonstration with the Corps as well as with our Oregon
Department of State Lands and Department of State Lands and
Conservation Development and the Ocean Coastal Zone Management,
so----
Chairman Lampson. As far as their participating in research
with as much material as they move and the impact that it can
have on so much of what is happening on our coastline, it seems
to me that that would be something that they would be
interested in.
Dr. von Jouanne. Absolutely, and I think that will come.
You know, with them now being an integral part of that
permitting process, I think they will see the opportunities
that they would have to contribute because there are a lot of
other research issues that need to be looked at, such as sand
transport, when wave energy devices are deployed, and that is
another big area that the Corps of Engineers could provide
input on.
H.R. 2313 Recommendations
Chairman Lampson. Mr. O'Neill, since you strongly advocate
for increased federal research and development funding for
marine renewable energy technologies, may I infer that you
support H.R. 2313, and are there specific changes to the
legislation that you would recommend?
Mr. O'Neill. Well, in terms of the bill itself, we support
the bill absolutely and we support all efforts in this area.
Any specific changes--we actually worked with staff on the bill
a bit and they were very receptive. There are so many
technologies. Mr. Thomsen mentioned the suite of technologies
within geothermal. We have got a lot of technologies and the
newer emerging, like the vortex-induced vibrations, et cetera,
aren't covered. I would encourage this particular committee
going forward that developing ways to really foster
innovation--right now the regulatory process as Mr. Greene
mentioned, we should have an adaptive management program and we
wholeheartedly endorse something like that. On the R&D side of
it though, I think that Congresswoman Hooley's bill is great.
Chairman Lampson. Thank you very much.
The Chair now recognizes Ranking Member Mr. Inglis.
Mr. Inglis. I thank the Chair.
Geothermal Generating Capacity
Dr. Tester, you testified I believe that 100,000 megawatts
is available from geothermal. Is that correct?
Dr. Tester. Well, let me clarify my remarks. When we
started our assessment, we undertook the idea that in order to
have geothermal be an important player in the United States,
that it would have to get to a point where it would be roughly
10 percent of the generating capacity that we have now. That
would correspond to, in today's figures, 100,000 megawatts.
However, if you look carefully at the analysis that we made of
the regional U.S. resource, including Alaska and Hawaii, but
just looking at it state by state, we are really talking about
an enormously large stored amount of thermal energy, and if you
were to envision a future where you might want to develop it
beyond this 10 percent level, there would not be an issue with
having enough energy in place to do it, and although geothermal
is clearly different than other renewables such as solar and
wind, the sustainability of it is clear, given the massive
amount of stored thermal energy that we have access to at, let
us say, to depths from the surface to 30,000 feet or to 10
kilometers. And I think it is important to keep this in mind,
that the heat-mining idea has to be modular and scaleable so
you start out small and you develop these connected reservoir
systems in much the way that you would want to emulate what
nature has given us in other parts of the world where we
utilize geothermal today, but it will never be limited, and I
think we make this statement clear in the report, by the
acceptability or the magnitude of the resource. It is clearly
going to be technology and economics which will determine how
much of this we can utilize. So it could way beyond 100,000
megawatts, to finalize that, if you wanted to go to that
regime, but it will be a matter of technology and cost.
Locations for Geothermal Energy Production
Mr. Inglis. Generally speaking, where is it available in
the United States? What are the best locations?
Dr. Tester. Well, if you use one metric as best, which
would be the average gradient, the geothermal gradient, you
could largely think of the western part of the United States as
having the highest gradients in general. I am speaking almost
from west of the Mississippi all the way to the California
coast. What makes it special though is that there are other
ingredients that you want besides just high temperature and
shallow depths. In the conventional system, you are looking for
permeability and porosity, connectivity, if you will, and the
presence of fluids. In the case of EGS, we are missing one of
those, and we are trying to develop technologies that would
stimulate the system to a point where we could emulate these
hydrothermal conditions. So if you wanted to envision a program
as we tried to put it together in our thinking that this would
start out something where you would work from the western part
of the United States where the resources are of higher grade,
shallower, less costly to develop and to demonstrate, and then
move east, so reversing the migration we had to the country. So
the high-grade resources I would say would be generally the
western part but they are in Texas, they are in Colorado, they
are in Montana. They are equally through the Pacific Northwest
and in California, not just where we are producing geothermal
energy right now.
Geothermal Technology Readiness
Mr. Inglis. The Chairman's helpful question about the OMB's
statement that it is a mature technology, could they really be
saying that it is economics that will make this work? In other
words, the technology is there----
Dr. Tester. Well, I think----
Mr. Inglis.--it is just a matter of economics?
Dr. Tester.--eventually everything in the alternative
energy field gets down to a question of economics but I think
what they seem to be missing is that this is not just one
number fits all geothermal systems. Very high-grade systems
such as we have in parts of California and Nevada and Utah are
already producing commercially competitive power right now.
What we would like to do is to improve the technology to the
point through this vigorous R&D program where we would bring
down those costs, where we would reduce risks and encourage
investment so that we could bring a larger portion of it
online. So if you will, go to the lower grades, not necessarily
what we might want to do in the very eastern part of the
country where the gradients are very near normal but certainly
to open up the west soon for a massive development of
geothermal expansion.
Mr. Inglis. Mr. Thomsen.
Mr. Thomsen. Mr. Chairman and Mr. Inglis, you know, I think
your question is a very good one in the fact that my company
focuses on your typical hydrothermal applications, and those
applications have been prevalent in the western United States
due to the drilling depth and cost and economics of those
projects. What this bill is looking at and what Mr. Greene
touched on is the fact that if we can make these technologies
more efficient, we can go capture this geothermal throughout
the country, and I think when we look at this, if we say what
we have now is good enough, then the idea of maturity can be
acceptable. My company doesn't feel that that is the case. We
want to continue moving eastward, going to greater depths and,
you know, to break it down to its most simple point, if we can
become more efficient and reduce the risk in drilling by 10
percent, 20 percent, you will see companies like ORMAT and
other start-up companies going after these resources that might
be slightly deeper, harder to penetrate and go find. When we
drill for geothermal resources in our standard hydrothermal
applications, we are drilling through the most--the hardest
rock, the hottest temperatures and looking for these resources
that are difficult to find. We have done that well on the West
Coast due to geology and the thickness of the Earth's crust and
things. We know the resources eastward and that is what we are
looking to find. The 100,000-megawatt number that we talked
about was from a report done in 1979. We haven't had a new
report since that time. And at that time they were looking for
temperatures in standard geothermal applications that were well
above 300 degrees Fahrenheit. Technology has come a little ways
in being able to capture lower temperatures and turn that into
viable technology projects. We want to continue looking at that
throughout the country.
Mr. Inglis. Mr. Chairman, time must be up, isn't it? Thank
you.
Chairman Lampson. Thank you, Mr. Inglis, and I apologize
for our clocks not working at all. If you will glance my way
every now and then, when you hit five minutes, or four and a
half minutes, I will at least hold this thing up and if you get
to five I will start tapping it a little bit.
I would recognize Mr. McNerney now for five minutes.
Mr. McNerney. Thank you, Mr. Chairman.
I do want to thank Dr. Tester for the excellent detail and
comprehensive report that was produced and for the executive
summary that was actually readable, and Mr. Thomsen for your
fine work with ORMAT.
Geothermal Generating Capacity
Dr. Tester, you mentioned that there were three gigawatts
being produced now and that we have a potential for 100
gigawatts in 10 years. Is that what I understood you to say?
Dr. Tester. If we proceed on the path that we proposed in
our scenario, the path was to get to 100,000 megawatts in 50
years to take us from where we are now. So three gigawatts now
to 100,000 megawatts in 50 years or 100 gigawatts, that is
still quite an ambitious set of developments. Each geothermal
site would have to be identified and developed, exploratory
drilling and verification, so we are already a few years into
that, as you know. But after you get to that point,
particularly as you get out along the 10- to 15-year period, we
feel that this will be essentially self-sustaining because you
will have enough of these modular plants in place, you will
have worked on both ends of the continuum, as I call it,
improving the high-grade and hydrothermal technologies, and
using where you can those technologies to work on EGS, and so
our feeling was that the economic analysis would say that a lot
of learning would go on during that period, demonstration,
multiple demonstrations, improving the modularity, being able
to show we can do it not only in California but in Idaho or
further east if we wanted to demonstrate the ability to make
reservoirs and stimulate them. So I am encouraged that you have
to get on that path and what I think is particularly laudable
about this bill is that it realizes that you can't just stay
with the short-term aspect of geothermal. You really should be
investing in both simultaneously and I think it is very
balanced with respect to that.
Mr. McNerney. Thank you.
Geothermal's Impact on the Economy
Mr. Thomsen, you represent industry and I am very intrigued
by your comment about jobs and the impact on the economy. Of
course, we are all worried about global warming and our
dependence on oil and the peak oil and so on but the actual
impact on the economy is where it really is going to come--that
is where the pedal is going to hit the metal. For some fixed
quantity of electrical production, how does job creation
compare both in the construction part and in the production
part to oil or natural gas, which is our leading form of
electrical production today?
Mr. Thomsen. Mr. McNerney, geothermal production is an
incredibly capital-intensive project up front. My company
recognizes that for each megawatt of energy we bring online, it
requires a capital investment of ours of $3 million, so if we
bring on 100 megawatts, that is a $300 million investment. When
we go to construct a project, 40 percent of our construction
costs come from the local economy. We utilize local contractors
for the small electric motors and things we use. We contract
all that out to the local economy. So we have a very large
impact. When it comes to jobs during the construction phase, I
think the Geothermal Energy Association (GEA) can better speak
to those exact numbers but I believe it is approximately 10 to
one in the amount of jobs required during the construction
phase compared to combined cycle gas, but we can be sure to get
you those numbers. And the point that we would like to point
out there is because this is a domestic resource, that money
stays within the state that our project is being built and
within this country, and that is hugely important for us.
Mr. McNerney. You said $3 million per megawatt. Do you see
that number going down?
Mr. Thomsen. Three million dollars per megawatt. That is
correct.
Mr. McNerney. Do you see that number going down as the
technology improves? I mean, it seems like when you go to EGS
you are going deeper, you are going to have to do reservoir
stimulation, rock stimulation and so on, so it doesn't seem
like it is going to go down with time.
Mr. Thomsen. It is--you have asked kind of a twofold
question and I would like to answer that. As we look--if we use
the technology that we are currently using today to look for
harder, more difficult resources at greater depth, that cost
will not go down. If we go to look for that resource using the
same drilling techniques, the same efficiency and production
techniques that we use today, you are absolutely correct. If we
can make the technology on the surface, this suite of
technologies that can take that heat and produce electricity
more efficiently, that cost might come down. But without a
robust R&D budget and the use of our great men and women at our
national laboratories and universities to develop that, I think
you are absolutely right. We don't foresee the cost of that
coming down greatly any time soon.
Dr. Tester. I could make one other small addendum to that.
In our analysis, if you look at the supply curves that we
developed in there, you will see that the early development of
EGS, which is what Paul was referring to, would be much higher
cost. It would be somewhere in the vicinity of perhaps twice
the current energy cost we have now for electricity. But as you
move out this yearly development and get out to the point where
you have incorporated technology improvements, learning by
drilling and improving the drilling technology, our estimates
would be that after about 12 to 15 years you would reach this
break-even condition where EGS, which requires these additional
attributes, as you have mentioned, would be competitive. But
you can't just assume that will happen. I think it really takes
engagement now in terms of getting the demonstrations out
there.
Mr. McNerney. Thank you.
Chairman Lampson. Thank you, Mr. McNerney.
The Chair now recognizes Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you very much, Mr. Chairman. I have
two brief questions.
Not in My BackYard (NIMBY) and Cost Concerns for Renewables
One is to Mr. O'Neill. You mentioned the cost per kilowatt-
hour for wind and wave and tidal, and just for, you know,
laypeople like us, for comparison sake, how does that compare
to the cost of kilowatt-hour for electricity from, you know,
coal, natural gas and nuclear, which is what we currently have,
number one.
For Mr. Greene, this weekend, by the way--last weekend I
was at the NOAA's Southeast Fishery Science Center, which is
located in Miami, and I think some of the research that you
recommend, for example, understanding fish populations, would
probably be more appropriately performed by an agency like NOAA
that is doing that right now, rather than DOE. Now, my
understanding is that currently these bills include only the
Department of Energy. Don't you believe that adequately
incorporating--would it not be better to expand to other
agencies like NOAA and others who may be doing it and not just
limiting it to DOE?
And lastly, I don't know who this question is to, Mr.
Chairman, but we saw last year a very good example of NIMBY,
Not In My BackYard, in the Northeast. I am not going to mention
who or what but, you know, people who are seen as real forceful
advocates of renewable energy, when it blocked their nice view
of the ocean, all said, you know, damn these resources, you
know, we don't need them in front of my yard, in front of my
view, in this case. It was just because it was blocking the
view a few miles out in the ocean. Have you all looked at that
and figured out how to deal with that because, you know, when
the rubber meets the road and reality is that, you know, this
is all great but nobody wants it in their backyard or in this
case, in the front of their ocean view, and I don't know, it is
not really a question. It is kind of just throwing out there
and you all have a thought about that.
So Mr. Chairman, those three questions and I will shut up.
Thank you, sir.
Mr. O'Neill. If I can start with your last question first
because I have spent over 20 years studying the NIMBY
phenomenon and worked for U.S. generating companies siting
plants in 17 different states where we ran into NIMBYism in all
its many forms. Very often NIMBYism comes from not a real
substantive issue with a plant. You can be in a community for a
year and have the town fathers telling you boy, this is the
best thing since sliced bread. Then it is time to pull papers
and run for office and you are the only issue in town. Very
oftentimes NIMBYism comes from disenfranchisement, and with
projects like ocean energy projects or even traditional power
projects, the important way to approach a project, any kind of
very large-scale change is going to scare people, so what you
need to do is, you need to go in, you need to talk to the
environmental community, you need to talk to the NRDC, you need
to talk to the Sierra Club, you need to talk to the local folks
and you need to listen to them, having a two-way dialog. In
some cases project developers have actually made changes in the
design of their projects, say, changed the coal train coming
into a town to using a barge to bring coal in so that people
don't have the same kind of impacts that the train would have.
So making a change, actually listening to the people in the
community. There have been lots of wonderful changes made to
traditional power plants. In Florida they found that
agricultural nutrients were going into Lake Okeechobee. The
project developer built a 29-mile pipeline around the lake and
took those nutrients, used them in their process water instead
of letting the nutrients go in. They got that information by
working with the local community and the county. So reaching
out and dealing with stakeholders early in the process is the
answer to your first question. Sorry for such a long answer.
To your first question in terms of the cost, traditionally,
to be competitive, you want to be about three to four cents a
kilowatt-hour. The cost to the consumer is actually about
eight-plus cents. I think it is 8.6 cents a kilowatt-hour and
that--excuse me? Oh, yeah, and it varies from region to region.
But that includes the transmission and distribution costs that
the utilities incur, et cetera. When you look at a 32-cent-per-
kilowatt-hour feed-in tariff in Portugal compared to our 1.9,
that 1.9 is probably appropriate right now for wind because of
the scale that we have onshore wind projects. That brings them
right into the hunt to be commercial. With ocean technologies,
as I mentioned, the offshore wind was 40 cents a kilowatt-hour
when it started. We are down getting into the single digits
already right out of the box.
Chairman Lampson. Thank you very much. Your time is expired
and I turn now and recognize Ms. Giffords for five minutes.
Ms. Giffords. Mr. Chairman, because I know we are going to
have votes called in just about five minutes, five, ten minutes
actually, I was hoping to hear from the sponsor of the bill.
Chairman Lampson. You may yield to her if you care to.
Ms. Giffords. I would yield to Representative Hooley.
Ms. Hooley. Thank you very much for yielding.
Wave Energy Technology Readiness
Dr. von Jouanne, talk to me a little bit about with wave
energy where we are compared to some of the other renewable
energy sources.
Dr. von Jouanne. Very good. In wave energy, we are about 20
years behind wind energy and that is because we have just
started to see dollars invested in wave energy and what we saw
in wind energy is that those investment dollars enabled an
acceleration toward the optimum topology that we see now. We
see this horizontal axis three-blade turbine. What we are
seeing in wave energy right now is several topologies being
considered in very preliminary stages of development and so
while companies are planning to deploy and preparing to deploy
their first topologies, a great deal of research and
development still needs to take place in order to really
optimize those topologies to make them cost competitive, and
because of the advantages of wave energy over other forms of
strong renewables such as wind and solar, we really feel that
the catch-up time can be accelerated with the proper research
and development dollars invested, and that the cost can be very
competitive with other strong technologies such as wind, and,
as I emphasized, we have this issue of energy density. If we
look at the density of water compared to air, the density of
water is about 832 times greater, which means we can extract
more power from a smaller volume at subsequent lower costs and
smaller visual impact with the whole NIMBY issue being
critical. We also have greater availability, that is, how often
are the waves rolling, and we have greater predictability that
enables a utility to determine how much power a wave park
equivalent to a wind farm, a wave park would be putting onto
the grid, so some substantial advantages there.
Ms. Hooley. Mr. O'Neill, at what point do you think that
wave energy in some form would be available for to be used in
this country, and what happens if we don't have the research
and development dollars available?
Mr. O'Neill. Well, if you look at Alaska right now where
they are paying up to 80 cents a kilowatt-hour for diesel-
generated electricity, we could go commercial and be profitable
in Alaska right now. The problem is that we don't have projects
in the water. We need to have actual operating projects. We
need to embrace the concept of adaptive management so that we
are looking at the environmental effects as well as the
efficiencies of these technologies to improve them. So getting
them in the water--and Dr. von Jouanne accurately portrayed the
fact that wave technology is about 20 years behind wind but I
see us ramping up to commercial viability within the next five
to eight years, and maybe even sooner. Advances not only in
wind technology but in composite materials design, looking at
other offshore construction techniques, our companies--if you
look at Verdant Power, which has six turbines in the East River
of New York, they have been operating. They have got $2 million
of sonar equipment to watch the fish and the fish are swimming
around the turbines. They are not running into the turbines,
just as expected. But the tips of the turbine blades go around
slowly just like with wind turbines, because of the lessons
from Altamont Pass. We use a monopole, another lesson from
Altamont Pass. We are learning from--so it is like the
technology cycle time in computers where it used to be a new
computer would come out every two or three years, then it was
every year and now it is every six months and three months. You
can't buy a cell phone now and think that is going to be new
and sexy for more than three months, and that is what is
happening. It is a robust, vibrant area and we are going to get
there.
Ms. Hooley. Thank you.
Chairman Lampson. I thank the gentlelady, and now we
recognize Mr. Bartlett for five minutes--Dr. Bartlett.
Solar Augmented Geothermal Energy (SAGE)
Mr. Bartlett. Thank you very much. My wife suggests that a
better acronym for those who are opposed to development that
they are a BANANA, Build Absolutely Nothing Anywhere Near
Anyone. That is where some of our people are coming from. I
wonder if Dr. Tester or others might comment on a concept
called SAGE, which is Solar Augmented Geothermal Energy. One of
the big problems of course with solar and wind is that they are
intermittent and you have got to store the energy and they have
what I think is a very clever approach to doing that. They are
using the excess energy at the moment of production to heat
brine, which is then pumped down into exhausted oil fields.
Using all the techniques you use in geothermal, they are then
extracting the energy from that hot brine. But a side benefit
from this is that they are loosening up some of the oil that is
there and we are now able to pump additional oil from these
fields. We would just like your observation on the utility of
SAGE as a potential for being a bridge between fossil and
renewable energy.
Dr. Tester. Let me comment first. I am sure Mr. Thomsen
will want to add something to it. One good thing about
geothermal is that it is continuous, dispatchable power, having
very high capacity factors that are typically now in excess of
90 percent in terms of their availability capacity factor. So
to go to a hybrid concept would take--using solar would take
some redesign and rethinking of how you would handle the power
conversion end of it but certainly could be done. There are
good examples of this across the spectrum of renewables in
general where we are dealing with interruptible renewables with
respect to solar. If we look at the Kramer Junction plant in
California where it uses gas when the sun is not shining, that
is a hybrid concept as well. So I would be very positive about
considering all ways in which you could utilize a higher
fraction of renewable resources if it made sense technically
and economically. The idea of injecting hot water and
increasing production of fluids is something that we address
sort of in the inverse way, namely that through the production
of oil and gas we also produce a lot of hot water, warm water
just as a consequence of that, and that water, at least the
thermal energy content goes largely unutilized. This is what is
referred to as co-produced fluids, and I think that too could
increase the effectiveness or efficiency of a utilization
effort. So all of the things you are suggesting I think are
appropriate to be examined and analyzed. I don't think there
are any picking winners and losers at this stage. It is perhaps
a little premature.
Mr. Thomsen. If I could, Mr. Chairman to Mr. Bartlett, you
have touched on some very good points, one being is the
bridging of renewable to fossil fuels. I think the SAGE idea
that you proposed is great and I think we should look at it. We
are also looking at, like Dr. Tester said, the co-production of
hot water from existing oil and gas wells which research has
shown to us might increase the longevity of our existing oil
fields. We also have technology very similar to geothermal,
which captures waste heat from gas compression stations using
the exact same geothermal technology and producing additional
electricity with no new emissions. The solar concept has been
used. ORMAT was responsible for a test project in Arizona using
solar troughs that heated a working oil, kind of a solar trough
collecting the sun's heat centered on a working oil that we
pumped through our system and produced electricity. So the idea
there is a fantastic one. What all of those projects have in
common is they can all be added to the suite of technologies
for geothermal and renewables but none of those yet are
commercially viable, and that is what we think this bill, 2304,
will help us do, take all that science and technology that
isn't quite yet commercially viable and help us learn from that
so we can make it commercially viable, bring down those cost
points, look at the problems with interfacing a geothermal
power plant with a well with a solar--you know, solar field, et
cetera. So I think--I mean, that is a fantastic suggestion.
Geothermal Energy Transportation
Mr. Bartlett. If we can do this of course we have another
challenge and that is how to get the energy from the site of
production to the user. With oil, it is easy. You put it in a
pipe. You put a gallon in the pipe; 1,000 miles away you still
got a gallon. What we are producing with electricity we put on
a wire and 1,000 miles away you may have nothing. So we have
the challenge of how we get the energy that we produce to the
ultimate user because most of these abandoned fields are not
near big population densities.
Mr. Thomsen. And one of the interesting and great
attributes of geothermal energy is its ancillary services, and
because it is a baseload energy source, when we produce
electricity--I am not an electrician and I am sure someone on
the panel can probably explain it to you better. We can
actually change the oscillation of that energy from AC current
to DC current, so when we put it on a line, we can actually
change the characteristics of that electricity so that it can
go farther and farther away. Some of our power plants in Nevada
are hundreds of miles away from the residential base. We are
close to transmission but far away from that residential base
and we can actually change the characteristics so that we can
get more power there.
Mr. Bartlett. Thank you, Mr. Chairman.
Chairman Lampson. Thank you, Mr. Bartlett.
I will now recognize Ms. Woolsey for five minutes.
Geothermal Production Tax Credit
Ms. Woolsey. Hello, and just outside of my district, Santa
Rosa, California, we have some of the largest reserves of
geothermal energy in the entire country, and to make this
renewable energy source even more renewable, Santa Rosa, which
is the largest city in my district, pumps wastewater up the
geysers to keep them generating electricity for a large part of
Santa Rosa. So it is a wonderful partnership and Santa Rosa
does away with a lot of their wastewater while they receive
electricity.
What I want to know is, are the current production tax
credits adequate to stimulate exploration and development, and
I also want to know, are there any offsetting problems with the
natural resources that need to be mitigated or do we come up
``A+'' because we are actually helping the environment while we
do this?
Mr. Thomsen. Thank you, Mr. Chairman to Ms. Woolsey.
Regarding the production tax credit, the geothermal industry
was thrilled to finally be included in the production tax
credit. The problem we have with the production tax credit is
that it only tends to be renewed every two to four years. The
average geothermal project takes three to five years to come
online from a Greenfield project, and so we are really asking
the industry sometimes to take a very short market signal from
the government and make a 20-, 30-year commitment because that
is how long our power plants operate. When it comes to getting
financial institutions to help you with the huge upfront
capital costs, the production tax credit, its amount is great
but its length is not so great and we have been unable to make
good use of that. There have been two projects that have
qualified for the production tax credit since it was passed.
They happen to both be ORMAT projects and the projects were
started long before we knew the production tax credit was going
to be there. We just happened to kind of fall into that later
on and so what we are looking for and what would really help
industry is a credible commitment for a longer period of time
so that we knew when we went to investors and we went to the
banks to say we are going to have this tax credit when this
project comes online. Without that, it hasn't been that
beneficial to the geothermal industry as of yet. The second
part of your question I think Dr. Tester can answer.
Geothermal Resource Assessment
Dr. Tester. Thank you for pointing out that lovely example
of what goes on at the geyser field. In fact, you are doing
what we would want to do in normal geothermal practice, which
is to continually reinject and resupply the system so you can
more effectively mine heat, and you might note in our
assessment of the enhanced geothermal system side of the story
that we did talk about the need and recommended that resource
assessment in general needs to be looked at much more
quantitatively and in a much more specific way across the
country. The last time a serious study was done was almost 30
years ago right now, a published study by the U.S. Geologic
Survey. The bill addresses that but I think the importance of
that and how that will affect where you go to the next
generation of sites is incredibly important. We picked a few
targets of opportunity, as we called them, in our study, one of
which was the Clear Lake area right near the geyser site. That
has been well characterized and obviously is a high-grade area
but there are many others in the country that haven't had that
degree of drilling and exploration that also need to be looked
at in California as well as many other states. So this is a
good part of the bill and I think needs to be sustained. It is
something that I think nationally is important for us to do.
Thank you.
Environmental Benefits From Geothermal
Mr. Greene. Congresswoman, I think, without a doubt, that
geothermal can play a large role in a very environmentally
positive way. Every energy technology though has some
environmental impact and I think the important thing that I
talked about earlier is thinking about this technology in a
long-term way. We need to go from one, two, three projects to
having lots of these projects if they are going to contribute
in a large way. That means we need to think about their impacts
cumulatively over all of those projects. I think to do that,
that is an environmental challenge and issue in and of itself.
The other part of getting there is addressing the sort of
uncertainty that communities feel when a project comes to them
and they are trying to figure out, all right, well, what does
this geothermal project in our backyard mean, and so getting
consensus around what the real environmental impacts are going
to be is critical and I think the research and development that
we are talking about here today can play a huge role in
building that consensus.
Ms. Woolsey. Thank you.
Chairman Lampson. Thank you, Ms. Woolsey.
I want to thank this panel. I think that we can adjourn at
this point in time. We have had everyone who wanted to ask
questions, and I have a few more questions but we will do that
differently.
I really appreciate all of you for appearing before the
Subcommittee. We all do. Your testimony has been very helpful
and I think fascinating. I believe that the legislation that we
have discussed today moves us forward in our effort to develop
a more diverse supply of energy.
Under the rules of our committee, the record will be held
open for two weeks for Members to submit additional statements
and any additional questions, as I have, that they might have
for the witnesses.
Thank you all for coming. This hearing is now adjourned.
[Whereupon, at 11:25 a.m., the Subcommittee was adjourned.]
Appendix 1:
----------
Answers to Post-Hearing Questions
Answers to Post-Hearing Questions
Responses by Jefferson Tester, Meissner Professor of Chemical
Engineering, Massachusetts Institute of Technology
Questions submitted by Chairman Nick Lampson
Q1. What is the smallest scale plant for electric power conversion
that is both technologically feasible and also makes commercial sense?
What is the largest? How modular or centralized can geothermal energy
production be?
A1. About one to two MWe would be the smallest output for geothermal
electric plant that would be practical today. There have been smaller
ones in operation in the past by they have been mostly demonstrations
and not in commercial service. For non-electric applications such as
geothermal heat pumps much smaller outputs (e.g., 5-10 kW thermal) are
commercially feasible today. Economies of scale are reached for single
modular generating plants supplied by one set of production wells
somewhere in the 50 to 100 MWe range. These modules can be linked
together to provide central station generation capacity to meet demands
for large load centers--such as mega cities or densely populated
regions. A good example of this approach is The Geysers field in
Northern California near Santa Rosa which is the largest geothermal
plant in operation in the world. It actually has a nameplate capacity
in excess of 2,000 MWe and consists of many modular plants in the size
range of 50 to 100 MWe.
Q2. Can you please comment on workforce training issues relevant to
geothermal energy development. Is our country currently producing
technically competent workers in sufficient numbers to significantly
expand work in all aspects of geothermal development?
A2. Our country is not currently producing enough engineers and
scientists with specific geothermal knowledge to develop and deploy
geothermal technologies at a much increased rate. Fortunately in the
U.S., student interest in alternative energy careers is growing and we
have the capacity in our universities in engineering and Earth sciences
to teach most of the core skills and fundamentals needed. With a
national R&D program in place it would not take much to redirect
colleges and universities to actively engage in creating programs to
educate and train the next generation of scientists and engineers
needed for large scale geothermal energy system deployment and
operation. It would be good to involve students and faculty with actual
operating geothermal plants and field demonstrations by way of
internships or co-ops when possible.
Q3. Can individual geothermal reservoirs be depleted of heat or fluid
over time? If so, how long does a reservoir last? If the heat in a
reservoir can be depleted, can it be recharged by allowing it to lie
``fallow'' for a period of time? How long? Must the power plant on the
surface lie dormant during this time, or can it tap into other
reservoirs?
A3. As thermal energy or heat is mined from specific reservoirs they
are ``locally'' depleted or cooled. An important feature is that the
extent of the depletion is very limited--well within the active
reservoir dimensions as only a portion of a rock volume near the
injection wells would be cooled. Furthermore, in contrast to other
mineral or fossil resources, once a particular geothermal reservoir
ceases to operate it will ``regenerate'' on its own with heat being
conducted from hotter regions of rock that surround the cooled parts
and by energy being generated by radiogenic decay of contained
minerals. After a period of roughly two to four times the energy
extraction period rock temperatures will be restored to their initial
condition. In a typical commercial operation any depleted wells could
be redrilled or re-stimulated or replaced with new wells to restore
fluid production temperatures. The power plant would continue to
operate with high availability and capacity factors using the newly
drilled, re-drilled or restimulated wells as their source of energy.
Q4. Given the enormous potential for geothermal energy development
that you highlight in the MIT report, how do you explain the relative
lack of interest in this resource? Why hasn't it attracted more
attention in recent years?
A4. There are several reasons why I feel the potential of geothermal
energy has been grossly undervalued in the U.S. (1) The
``constituency'' of advocated for geothermal energy is much smaller
than for other renewables such as solar and wind that compete for
resources and funds within the DOE. (2) There is widespread perception
that geothermal is ``too small and too localized'' resource with only a
few regions capable of providing power. This perception is based on the
idea that only natural high-grade hydrothermal systems are viable, it
completely ignores the idea of EGS--with human intervention to engineer
systems to emulate the properties of high-grade hydrothermal
reservoirs. (3) Federal R&D for geothermal has been inconsistent and to
small for the last 15 years in the U.S. to mount sufficiently large
field demonstrations of EGS technology.
Q5. What other countries are supporting EGS research and what are they
doing? Have they made any significant advances?
A5. There are several EGS programs underway at the present time in
Europe and Australia. The largest of these are at the Cooper Basin site
in South Australia operated by Geodynamics with federal, State and
private support and the Soultz site in France operated with the EU R&D
program and at the Landau site in Germany, and the Basel site in
Switzerland under private and federal sponsorship. Each of these tests
has advanced EGS technology building on earlier U.S. experience.
Q6. In your written testimony you comment on the importance of
international cooperation in geothermal R&D. Can you comment on what a
specific provision to support such international cooperation might look
like? What specific activities should it support, and with whom?
A6. Provisions for extended international travel support for our
scientists and engineers to participate in ongoing field testing and
evaluation of EGS systems in other countries would provide significant
leveraging of our own efforts and avoid duplication. Also in some
cases, it may be appropriate to have jointly funded research projects
particularly on technique or instrumentation development for evaluating
reservoirs and for drilling. To start, we should be collaborating with
the Australians, with the Europeans involved in projects at the Soultz,
Landau, and Basel sites, with the Italians at sites in northern Italy
and elsewhere, and with the Icelandic researchers dealing with
geothermal developments in Iceland and in other countries.
Answers to Post-Hearing Questions
Responses by Paul A. Thomsen, Public Policy Manager, ORMAT
Technologies, Inc.
Questions submitted by Chairman Nick Lampson
Q1. What is the smallest scale plant for electric power conversion
that is both technologically feasible and also makes commercial sense?
What is the largest? How modular or centralized can geothermal energy
production be?
A1. ORMAT recognizes that there are many technologies that can be used
to commercially convert typical hydrothermal resources into
electricity. ORMAT utilizes the ORMAT ENERGY CONVERTER (``OEC ''), a
power generation unit, which converts low, medium and high temperature
heat into electrical energy, and therefore can only comment on this
technology utilized by ORMAT.
The OECs are designed for the specific conditions of a wide variety
of heat sources. Its main components include a vaporizer/preheater,
turbo-generator, air-cooled or water-cooled condenser, feed pump and
controls. The OEC is a field-proven, mature commercial product used in
71 countries worldwide. ORMAT has successfully manufactured and
supplied more than 800 MW of geothermal power plants, based on its
proprietary technology, logging millions of hours of operating
experience.
The OEC enables geothermal developers to efficiently and
economically use the full range of naturally occurring geothermal
resources found throughout the world--from low temperature geothermal
water to high-pressure steam.
Full Range of Geothermal Conditions:
- The OECs can accommodate a wide range of geothermal
fluid temperatures and chemistries:
- Steam pressure: from 1.5 bar (21.8 psig) up to 25.0
bar (362 psig)
- Brine temperature: from 100+C to
224+C
- Silica content: up to 1.95 silica index
- NCG content: up to 15 percent
Full Range of Site Specific Plant Scale:
- Available in sizes and configurations cost-
effectively matched to specific resource and project
requirement, rather than imposing standardized plant
sizes
Capacity range:
- from 250 kW to 130 MW
Enabling 100 percent re-injection of the geothermal
fluid serves to maintain reservoir pressure and sustain the
life of the aquifer.
Air-Condensers for Sustainability and Environmental
Benefits
- In addition of enabling 100 percent re-injection,
air-cooled condensers minimize the environmentally
negative impact of emissions and acid rain from cooling
towers and eliminate the use of chemicals for water
treatment
High Availability
- ORMAT binary cycle plants have demonstrated average
plant availability of over 97 percent, with typical
individual OECs demonstrating generally over 95 percent
availability
Modularity:
- The modular approach leads to flexibility, high
average plant availability, faster delivery time and
the capability of incremental development of projects
Incremental Development:
- Use of the modular concept and cost-effective plants
at modest capacities makes it feasible to develop
projects in an incremental manner, which is a more
economically viable and a less risky approach
Repowering Existing Plants:
- The use of OECs for re powering existing power
plants produces more power without additional resources
by:
Utilizing excess inlet steam pressure
through unique ``topping'' turbines
Utilizing unused heat of brine
discharged from a separator
Small/Medium Scale Projects:
- OEC technology is also commercially applicable for
small-scale projects where the resources are limited,
the power demand small and/or where the conventional
technology is not economically viable
- The OEC's high reliability, pre-assembled units,
ease of operation and maintenance, and convenience in
transportation and installation are expanding the use
of small scale projects
Q2. Can you please comment on workforce training issues relevant to
geothermal energy development? Is our country currently producing
technically competent workers in sufficient numbers to significantly
expand work in all aspects of geothermal development?
A2. Currently, ORMAT sees a lack of engineers and personnel with
applicable vocational skills in this county. With the expanded growth
of the industry coupled with a lack of confidence in the continuation
of DOE funding the geothermal industry is bracing for a substantial
dearth of qualified and interested individuals.
In the GEA's Handbook on the Externalities, Employment, and
Economics of Geothermal Energy Alyssa Kagel points out that a
geothermal power plant provides significantly more jobs than a
comparative natural gas fired power plant, according to the Department
of Energy (DOE).\1\ Geothermal jobs are quality, long-term, and
diverse. According to the Environmental Impact Statement/Environmental
Impact Report (EIS/EIR) for the proposed Telephone Flat geothermal
development project located in the Glass Mountain Known Geothermal
Resource Area (KGRA) in California, the average wage at the facility
will be more than double the average wage in the surrounding counties.
GEA's employment survey found that the overwhelming majority of
geothermal jobs (95 percent) are permanent, and most are also full-
time. In 2004 the geothermal industry supplied about 4,583 direct power
plant related jobs.
---------------------------------------------------------------------------
\1\ U.S. DOE (Jan. 2006). Employment Benefits of Using Geothermal
Energy, Geothermal Technologies Program. Retrieved March 17, 2006 from
http://www1.eere.energy.gov/geothermal/employ-benefits.html
---------------------------------------------------------------------------
The total direct, indirect, and induced employment impact of the
industry in 2004 was 11,460 full-time jobs.\2\ Looking to the future,
geothermal employment should expand significantly. In 2005 alone, GEA
has verified over 2,000 MW of geothermal projects under development,
which would increase geothermal capacity, and subsequently geothermal
employment, by over 70 percent. Within the next ten years, the Western
Governors' Association (WGA) estimates that over 5,600 MW could be
produced in eleven U.S. states, the economic effect of which is
detailed in the table below.
---------------------------------------------------------------------------
\2\ Geothermal Energy Association (GEA) (September 7, 2005).
Expanding Geothermal Power Could Create 100,000 New Jobs. Press
Release. Retrieved June 16, 2006 from www.geo-energy.org
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Q3. Can individual geothermal reservoirs be depleted of heat or fluid
over time? If so, how long does a reservoir last? If the heat in a
reservoir can be depleted, can it be recharged by allowing it to lie
``fallow'' for a period of time? How long? Must the power plant on the
surface lie dormant during this time, or can it tap into other
---------------------------------------------------------------------------
reservoirs.
A3. The geothermal reservoir is the entire system of fractured and
permeable rocks and the hot water or steam trapped in that volume of
rock. Geothermal reservoir engineering is the application of the basic
principles of physics and chemistry to the engineering problems
associated with the production of hot water (``brine') or steam from
permeable rocks within the Earth. The rock contains most of the heat
energy, but the brine or steam is necessary to carry the thermal energy
to the surface for economic use. The long term success and
profitability of an electricity producing geothermal project depends on
how well the geothermal resource is managed. Like oil and gas
reservoirs, geothermal reservoirs can be overproduced if not properly
managed. Overproduction of a reservoir leads to a significant
shortening of its productive lifetime and a loss of income. Almost all
geothermal fields require injection of the produced brine back into the
reservoir to maintain pressure and productivity.
ORMAT's closed loop binary process re-injects 100 percent of all
brine used in its process creating a preferable reservoir management
program, allowing ORMAT to predict future changes in pressure,
temperature, production rates, and chemistry of the produced geothermal
fluids.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Such information is crucial for designing power plants and other
facilities required for the most economic use of the resource.
Reservoir engineering is of major importance in geothermal development.
Any unexpected change in the characteristics of the wells or produced
fluids can dramatically affect the profitability of the project. The
application of reservoir engineering begins during the exploration
phase of the project with the analysis of the initial geophysical
measurement data that indicates a promising geothermal system, and it
continues throughout the operational life of the geothermal resource.
It is the reservoir engineer's task to test wells, monitor their
output, design new wells, and predict the long-term performance of the
reservoir and wells. This design and prediction is accomplished by
studying field and operational measurement data and using computer
models to project the field operation into the future. During operation
of a geothermal field, the reservoir engineer will be able to compare
the actual performance to the predicted performance. If necessary, the
engineer can modify the management plan for the geothermal field to
obtain more efficient operation. ORMAT's steamboat facility has been
operating since 1985 with minimal variation to the resource
temperature. Because 90 percent of the heat utilized in the geothermal
process is transferred from the surrounding rock to the brine, ORMAT is
unaware of any geothermal reservoir that has completely depleted its
heat source. While water management can be difficult in non-closed loop
systems, EGS systems may prove pivotal in assisting in reservoir
management.
Q4. Does your company see major export opportunities for geothermal
energy technologies?
A4. Yes, ORMAT is a vertically-integrated company whose primary
business is to develop, build, own and operate geothermal and recovered
energy power plants utilizing in-house designed and manufactured
equipment selling the electricity to utilities under long-term power
purchase agreement. Power generation resulted in 73 percent of 2006
total revenues.
ORMAT also supplies its power generating equipment or complete
power plants on a turnkey--EPC (Engineering, Procurement and
Construction) basis to developers, utilities and industrial users.
ORMAT has installed its equipment in 71 countries on six continents.
Products resulted in 27 percent of 2006 revenues.
Q5. What are the specific technological hurdles that stand in the way
or geothermal power being used as a significant source of energy in the
United States?
A5. ORMAT sees technological hurdles and substantial needs for
improvement in technology, resource information, and efficiencies for
which federal research is vital. The range of near-term needs is broad.
Our knowledge and understanding of the geothermal resource base is
limited and largely outdated. The technology available today to
identify and characterize the resource often does not mitigate the high
risk of development. Drilling in harsh geothermal environments is
difficult and expensive. In locations where the resource cannot
presently support commercial production, we need to evaluate the
applicability of EGS techniques to achieve power generation at
competitive prices.
ORMAT supports a continued geothermal research program to address
these near-term needs to expand domestic energy production and the
long-term need to find the additional breakthroughs in technology that
could revolutionize geothermal power production and reduce this
countries dependence on foreign energy sources. ORMAT believes this to
include an ongoing R&D program focused on further expanding the
hydrothermal resource base, developing the technologies needed to make
the EGS concept commercially viable, and taking advantage of the
substantial deep thermal resources associated with the petroleum
formations along the Gulf Coast.
ORMAT believes cost-sharing is an appropriate and necessary
component of a near-market partnership between the government and a for
profit entity. For an example of what can come from this type of
collaboration I turn to the fact that ORMAT has signed a cost-shared
Cooperative Research and Development Agreement (CRADA) with DOE to
validate the feasibility of a proven technology already used in
geothermal and Recovered Energy Generation (REG).
The project will be conducted at the DOE Rocky Mountain Oil Test
Center (RMOTC), near Casper, Wyoming, and will use an ORMAT Organic
Rankine Cycle (ORC) power generation system to produce commercial
electricity. ORMAT will supply the ORC power unit at its own expense
while the DOE will install and operate the facility for a 12-month
period. ORMAT and the DOE will share the total cost of the test and the
study, with ORMAT bearing approximately two thirds of the less than $1M
total investment. The information gathered from this project may have
implications to the some 8,000 similar type wells have been identified
in Texas.
Questions submitted by Representative Gabrielle Giffords
Q1. Can you comment on the use of water resources in geothermal power
plants? Is a source of water essential, either for cooling or other
purposes? Is geothermal technology applicable in regions, like the
southwestern U.S., where water is scarce?
A1. Water use: Water cooling is not always required for geothermal
power plants. Binary power plants (which will be the most commonly
installed for most new geothermal facilities) can be air-cooled.
However, in locations with high average ambient temperatures, water-
cooling is a preferred method, even for binary plants. The water-use
for these power plants is relatively low compared to fossil fuel
technologies.
According to the Geothermal Energy Association, ``Geothermal
plants* use five gallons of freshwater per megawatt hour, while binary
air-cooled plants use no fresh water. This compares with 361 gallons
per megawatt hour used by natural gas facilities.'' \3\
---------------------------------------------------------------------------
\3\ A Guide to Geothermal Energy and the Environment. Geothermal
Energy Association (2007) (page ii).
---------------------------------------------------------------------------
* This includes binary plants and flash or steam plants.
Because geothermal plants use significantly less water than fossil
fuel plants, the scarcity of water is not a concern, nor a obstacle to
development. Geothermal plants currently operate in the Southwest in
Southern California, Central Nevada, and Southwestern Utah. A
geothermal power plant has operated in Southwestern New Mexico.
Outside of Southern California, and Central and Northern Nevada,
other areas in the Southwest have been noted as containing geothermal
prospects sufficient for electric production.
This includes areas in Arizona (including Southeastern Arizona)
This includes areas in Colorado (particularly Southwestern/South
central Colorado)
This includes areas in New Mexico (particularly Southwestern/South
central New Mexico)
This includes areas in Utah (including Southwestern Utah)
Appendix 2:
----------
Additional Material for the Record
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Section-by-Section Analysis of
H.R. 2304, the Advanced Geothermal Energy
Research and Development Act of 2007
Rep. Jerry McNerney (D-CA)
Introduced May 14, 2007
Summary
H.R. 2304 directs the Secretary of Energy to support programs of
research, development, demonstration, and commercial application in
advanced geothermal energy technologies. It also establishes or expands
several programs for technology transfer and information sharing on
geothermal energy.
Section-by-Section
Section 1. Short Title
Act may be cited as the ``Advanced Geothermal Energy Research and
Development Act of 2007''
Section 2. Findings
Geothermal energy is a renewable resource capable of providing
baseload power generation (and other applications) with minimal
environmental impact. The geothermal energy potential in the United
States is widely distributed and vast in size, yet it remains barely
tapped. Sustained and expanded funding for research, development,
demonstration, and commercial application programs is needed to improve
the technologies to locate, characterize, and develop geothermal
resources.
Section 3. Definitions
Provides definitions for the following terms used in the Act:
`Enhanced Geothermal Systems,' `Geofluid,' `Geothermal,'
`Hydrothermal,' `Secretary,' and `Systems Approach.'
Section. 4. Hydrothermal Research and Development
Instructs the Secretary to support research, development,
demonstration, and commercial application of technologies designed to
assist in locating and characterizing undiscovered hydrothermal
resources. Establishes an ``industry-coupled exploratory drilling''
program, which is a cost-shared program with industry partners to
demonstrate and apply advanced exploration technologies.
Section 5. General Geothermal Systems Research and Development
Establishes a program of research, development, demonstration, and
commercial application of system components and materials capable of
withstanding the extreme environment (high temperatures and
corrosiveness) in geothermal wells. Also establishes a program of
RDD&CA of improved models of geothermal reservoir performance.
Section 6. Enhanced Geothermal Systems (EGS) Research and Development
Instructs the Secretary to support a program of RDD&CA of
technologies necessary to advance EGS to a state of commercial
readiness. Also establishes a cost-shared, field based program of
research, development, and demonstration of technologies to create and
stimulate EGS reservoirs.
Section 7. Cost Sharing
Establishes guidelines for the ratio of federal/non-federal
contributions to cost-shared programs established under this Act. Also
describes certain organizational and administrative elements to be
integrated into the structure of cost-shared programs.
Section 8. Centers for Geothermal Technology Transfer
Provides for the creation of two Centers of technology transfer to
function as information clearinghouses for the geothermal industry,
dedicated to collecting and sharing industry-relevant information. One
Center, to be located in the western U.S., shall be dedicated to
hydrothermal-specific development information; the other Center,
located in the eastern U.S., shall be dedicated to EGS-specific
development information.
Section 9. Study on Advanced Uses of Geothermal Energy
Requires the Secretary to track technological advances impacting
geothermal energy development and advanced uses of geothermal energy
and fluids, and report back to the Committee every other year for the
next five years (a total of three times).
Section 10. Authorization of Appropriations
Authorizes appropriations of $80,000,000 for each of the fiscal
years 2008 through 2012.
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Section-by-Section Analysis of
H.R. 2313, the Marine Renewable Energy
Research and Development Act of 2007
Rep. Darlene Hooley (D-OR)
Introduced May 15, 2007
Summary
H.R. 2313 directs the Secretary of Energy to support programs of
research, development, demonstration, and commercial application in
marine renewable energy technologies. It also establishes National
Centers for the testing of marine renewable energy technologies.
Section-by-Section
Section 1. Short Title
Act may be cited as the ``Marine Renewable Energy Research and
Development Act of 2007''
Section 2. Findings
Marine energy sources--including waves, tidal flows, ocean
currents, and thermal gradients--are clean, renewable, domestic sources
of energy that have the potential to provide significant amounts of
electricity to the Nation's power grid. Technologies designed to
harness marine energy sources are already providing grid power in
Europe. Recent studies have identified an abundance of viable sites for
marine energy production in coastal areas of the United States, but
expanded R&D is necessary to further develop the related technologies
and hasten their commercial application. Federal support can be
instrumental in hastening the development of marine renewable energy
technologies and reducing the risk of investing in these areas.
Section 3. Definitions
Provides definitions for the following terms used in the Act:
`Marine Renewable Energy' (includes usable energy derived from waves,
tidal flows, ocean currents, and thermal gradients), and `Secretary.'
Section. 4. Marine Renewable Energy Research and Development
Instructs the Secretary to support programs of research,
development, demonstration, and commercial application of marine
renewable energy technologies. Areas of activity shall include:
studying and comparing existing technologies, developing improved
technologies, reducing costs of manufacture and operation,
investigating integration with power grid, improving wave forecasting
technologies, optimizing placement of devices, increasing reliability
and survivability, studying technology compatibility with the
environment, protocols for interacting with devices, and developing
power measurement standards.
Section 5. Marine Renewable Energy Research and Demonstration Centers
Calls for the establishment of one or more Centers for the
research, development, and demonstration of marine renewable
technologies. Such centers shall serve as permanent installations in
environmentally approved areas where prototype technologies can be
tested in connection with the power grid. Centers shall also serve as
clearinghouses of industry relevant information. Sites for Centers
shall be chosen on the basis of accessibility to appropriate marine
energy resources and proximity to an existing marine renewable energy
research and development program.
Section 6. Authorization of Appropriations
Authorizes appropriations of $50,000,000 for each of the fiscal
years 2008 through 2012.
Statement of UTC Power
UTC Power appreciates the opportunity to submit the following
statement for the record for the House Committee on Science and
Technology, Energy and Environment Subcommittee hearing on ``Developing
Untapped Potential: Geothermal and Ocean Power Technologies.''
Company Background
UTC Power, a business unit of United Technologies Corporation, is a
world leader in commercial stationary fuel cell development and
deployment. UTC Power also develops other innovative power systems for
the distributed energy market. This document focuses on issues related
to the latest addition to our portfolio of clean, efficient, reliable
technology solutions--namely, PureCycle power system. This is an
innovative low-temperature geothermal energy system that represents the
first use of geothermal energy for power production in the State of
Alaska and the lowest temperature geothermal resource ever used for
commercial power production in the world. The technology currently is
being demonstrated at the Chena Hot Springs resort 60 miles from
Fairbanks, Alaska and 35 miles off the power grid. UTC Power recently
announced an agreement with Raser Technologies to provide up to 135
PureCycle geothermal power systems totaling approximately 30 megawatts
of renewable power for three Raser power plants.
Summary
Geothermal energy addresses many of our national concerns, but its
potential is largely untapped. UTC Power's PureCycle system represents
an innovative advancement in geothermal energy production and is
operating successfully today in Alaska as part of a demonstration
effort. This geothermal energy breakthrough offers the possibility of
tapping into significant U.S. geothermal reserves for a domestic,
renewable, continuously available source of power to meet our growing
energy demands. Congressional action is needed, however, if the United
States is to translate this potential into reality. We welcome the
introduction of the ``Advanced Geothermal Energy Research and
Development Act of 2007'' (H.R. 2304) as a key element of the
comprehensive policy framework that is necessary to advance our
nation's use of geothermal energy.
Geothermal Energy Addresses Many National Concerns, But Huge Potential
is Largely Untapped
Our nation is faced with air quality and global climate change
challenges, ever-increasing fuel costs and a desire to be less
dependent on energy sources from politically unstable areas of the
world. The United States is blessed with an abundance of geothermal
energy resources that offer a renewable, continuously available,
largely untapped domestic resource. The country generates 2,800 MWe of
geothermal energy for power production in California, Nevada, Utah and
Hawaii and another 2,400 MWe is under development. While estimates
vary, the Geothermal Energy Association indicates that with effective
federal and State support, as much as 20 percent of U.S. power needs
could be met by geothermal energy sources by 2030. The National
Renewable Energy Laboratory's report ``Geothermal: The Energy Under Our
Feet'' concludes: ``Domestic resources are equivalent to a 30,000-year
energy supply at our current rate for the United States.'' The study
also notes: ``New low-temperature electric generation technology may
greatly expand the geothermal resources that can be developed
economically today.''
Chena Hot Springs Resort Puts Geothermal on the Map in Alaska
Thanks to a partnership between UTC Power, Chena Hot Springs
Resort, the U.S. Department of Energy, Alaska Energy Authority, Alaska
Industrial Development and Export Authority and the Denali Commission,
Alaska was added last year to the list of states using geothermal
resources for power production. The system operates on 165+F
(74+C) geothermal water and by varying the refrigerant can
use hydrothermal resources up to 300+F (149+C).
This is an exciting breakthrough since previously experts had assumed
that geothermal fluids needed to be at least 225+F
(107+C) for economic power generation. It is also
significant since a large portion of the estimated known U.S.
geothermal resources are expected to be in the low to moderate
temperature range, including a large number of deposits associated with
oil and gas wells that are currently not economically viable and
therefore non-productive.
The system was commissioned in August 2006 and provides power for
the resort's on-site electrical needs. Our two PureCycle 225 kW Chena
units have logged 5,400 hours of experience with 98 percent
availability.
The visionary owners of the resort, Bernie and Connie Karl, are
committed to a sustainable community that is entirely self-sufficient
in terms of energy, food and fuel. Their dedication is evidenced by on-
site renewable power sources that secure their energy independence
while benefiting the environment.
We are working closely with Alaskan authorities regarding further
development of and enhancements to this technology. There is
significant potential to deploy PureCycle systems for biomass
applications at Alaska's more than 200 rural villages that currently
depend on diesel generators with fuel being shipped by air or water.
The present approach results in high costs, logistics issues, and
dirty, loud power generation that is inconsistent with native cultural
values.
Description of PureCycle Technology
The PureCycle system is the product of a UTC brainstorming session
in 2000 focused on opportunities for organic growth. It is based on
organic Rankine cycle (ORC) technology--a closed loop process that in
this case uses geothermal water to generate 225 kW of electrical power.
Think of an air conditioner that uses electricity to generate cooling.
The PureCycle system reverses this process and uses heat to produce
electricity. The system is driven by a simple evaporation process and
is entirely enclosed, which means it produces no emissions. The only
byproduct is electricity, and the fuel--hot water--is a free renewable
resource. In fact, after the heat is extracted for power, the water is
returned to the Earth for reheating, resulting in the ultimate
recycling loop.
Innovative Features and Awards
The PureCycle system reflects a number of key innovations and
breakthroughs. As mentioned previously, the Chena project is the
world's lowest temperature geothermal resource being used for
commercial power production and represents the first time geothermal
energy has been used to produce electricity in Alaska.
On the technical side, the PureCycle system capitalizes on an
advanced aerodynamic design that results in 85 percent efficiency from
a radial inflow turbine derived from a Carrier Corp. compressor.
Carrier Corp. is a sister UTC company and a world leader in air
conditioning and refrigeration technology. The geothermal system is
also unique in its ability to match the turbine design to working fluid
properties, thus allowing the equipment to operate on a range of low to
moderate temperature energy resources and enhancing its flexibility to
meet customer requirements.
While the PureCycle system and its application to the geothermal
energy market are new, the product draws upon decades of UTC
innovation, operating experience and real-world expertise. Key
components of the system are derived from Carrier Corp. and 90 percent
of the PureCycle system is based on UTC high-volume, off-the-shelf
components that enhance the value proposition to our customers.
The Chena project has attracted world-wide attention and won two
awards in 2006--a U.S. Environmental Protection Agency and Department
of Energy 2006 National Green Power Award for on-site generation and
Power Engineering magazine named it Renewable/Sustainable Energy
Project of the Year.
What Is the Significance of Low Temperature Geothermal Energy?
Previously, geothermal energy for power production has been
concentrated in only four Western U.S. states. The ability to use small
power units at lower temperature geothermal resources will make
distributed generation much more viable in many different regions of
the country. Simply put, PureCycle technology could result in
significant new domestic, continuously available renewable energy
resources--not just in Alaska, but across the country. The capability
to operate with a low temperature resource allows the UTC PureCycle
System to utilize existing lower temperature wells and to bottom higher
temperature geothermal flash plants and many existing ORC binary power
plants.
In addition, there are more than 500,000 oil and gas wells in the
U.S., many of which are unprofitable. The use of geothermal hot water,
which is abundant at many oil and gas well sites, to produce a
renewable source of electrical power could extend the life of many of
these assets. This would result in significant environmental, energy
efficiency, climate change, economic and other benefits associated with
the development of geothermal oil and gas electrical power.
Recommended Actions
It is unfortunate that at this moment in time when there are
exciting innovative developments in the world of geothermal technology,
the Federal Government is cutting off research and development funding.
The rationale given is that the technology is mature and represents a
resource with limited value since it is confined to only a few Western
states.
We have only scratched the surface regarding our nation's
geothermal energy potential. The R&D possibilities have not been
exhausted and this is NOT a resource that is limited to only a few
Western states. There are advances in low-temperature geothermal energy
alone that prove otherwise.
The National Research Council report ``Renewable Power Pathways''
recognized the importance of geothermal energy and stated: ``In light
of the significant advantages of geothermal energy as a resource for
power generation, it may be undervalued in DOE's renewable energy
portfolio.''
Government action is needed on a variety of fronts to fully realize
the potential of our nation's significant geothermal resources. UTC
Power recommends:
1. Extension of the geothermal production tax credit and revised
``placed in service'' rules.
The 2005 Energy Policy Act made geothermal energy production
eligible for the Sec. 45 federal Renewable Electricity Production Tax
Credit (PTC). This incentive is adjusted for inflation and currently
provides 2.0 cents per kWh for energy produced from geothermal
resources. A taxpayer may claim credit for the 10-year period
commencing with the date the qualified facility is placed in service.
Many geothermal projects take years to develop. The PTC timeframe
is too short for most geothermal projects to be completed by the
current placed in service deadline. We support the Geothermal Energy
Association's position that ``To achieve sustained geothermal
development, Congress should immediately amend the law to allow
facilities under construction by the placed in service date of the law
to qualify, and extend the placed in service deadline by at least five
years, to January 1, 2014, before its expiration.''
Since our PureCycle system is just now entering the marketplace,
we need certainty and stability with regard to this important incentive
to maximize market penetration and capitalize on the many societal
benefits of geothermal power production.
2. Robust funding for DOE's Geothermal Research Program.
There are a variety of geothermal research, development and
demonstration needs, including cost-shared partnerships to:
- enhance the performance of existing successful geothermal
power production systems;
- improve the efficiency of geothermal capture rates;
- increase the size of low temperature systems to one
megawatt;
- develop systems that can operate at even lower temperatures
than today; and
- demonstrate the benefits for other applications including
the oil and gas market as well as industrial reciprocating
engines (jacket water and exhaust heat).
3. Comprehensive nationwide geothermal resources assessment.
The most recent U.S. Geological Survey for geothermal energy was
conducted in 1979. This survey used techniques that are outdated today
and was based on technology available 30 years ago. It did not consider
low to moderate temperature resources since there was no technology
available at the time that could utilize these resources in a cost-
effective manner.
4. Incentives for geothermal exploration and drilling.
According to the Geothermal Energy Association, 90 percent of
geothermal resources are hidden with no surface manifestations.
Exploration is essential to expand production, but exploration is
expensive and risky. Cost-shared support for exploration and drilling
should be continued and expanded.
Comments on H.R. 2304
We applaud the leadership of Reps. McNerney (D-CA), Gordon (D-TN)
and Lampson (D-TX) in introducing the ``Advanced Geothermal Energy
Research and Development Act of 2007'' (H.R. 2304). This legislation
addresses many of the pressing research, development, demonstration and
commercial application needs related to geothermal energy. UTC Power
offers the following suggestions to clarify the Congressional intent
and enhance the legislation's effectiveness.
Section 4--Hydrothermal Research and Development--As noted above, there
are significant opportunities for research, development and
demonstration activities related to low temperature geothermal power
production. We recommend that a third category of programs be included
in this section that addresses the opportunities related to enhanced
performance, higher efficiency, greater size, lower temperature,
biomass, reciprocating engines (jacket water and exhaust heat), and oil
and gas applications.
In addition, to ensure the required site characterization
activities include examination of low, moderate and high temperature
resources, language should be added to make this explicit. As noted
above, previous assessments have not focused on low temperature
geothermal resources based on the assumption that technology was not
available to economically utilize these resources. As our Chena Alaska
project has demonstrated, low temperature geothermal resources can be
tapped for power generation and therefore it is essential that resource
assessments include information on their location and key
characteristics.
Section 8--Centers for Geothermal Technology Transfer--The list of
subjects being addressed by these information clearinghouses should be
expanded to include advances in geothermal power production technology
so state of the art developments can be disseminated to interested
parties.
Section 10--Study on Advanced Uses of Geothermal Energy--H.R. 2304
calls for a series of reports not later than one year, three years and
five years after enactment on advanced concepts and technologies to
maximize the geothermal resource potential of the United States
including the co-production of geofluids for direct use or electric
power generation in conjunction with existing oil and gas extraction
operations. We believe the Nation could speed up its use of these
strategically important resources by beginning a demonstration program
at the earliest possible date to validate the technology. By supporting
a demonstration effort in parallel with a more extensive and rigorous
examination of the characteristics of these sites and their location,
we could expedite the technical learning process and accelerate the
timeframe in which we could maximize the many benefits of these
resources. UTC Power would therefore recommend that in addition to the
study mandated in Section 10, language be added in Section 4
authorizing a demonstration program for co-production of geofluids for
direct use or electric power generation in conjunction with existing
oil and gas extraction operations.
Conclusion
As UTC Power's Chena project demonstrates, far from being a mature
technology with limited geographic reach, geothermal energy has the
potential to satisfy a significant portion of our growing energy needs
with a renewable, continuously available domestic resource. But
appropriate government policies must be adopted and implemented to make
this a reality. We welcome the opportunity to work with Members of the
Committee and other stakeholders to refine and enhance H.R. 2304 and
ensure its enactment and implementation as part of a comprehensive
package of initiatives that support geothermal energy production.