[Graeme]

When Should Geothermal Heat Pumps Qualify for State Renewable Energy Credits?

A relatively new policy being considered for state renewable energy standards (RESs) is to allow geothermal heat pumps (GHPs) to be treated the same as traditional renewable energy sources for awarding renewable energy credits (RECs).

GHPs are used for space heating and cooling in buildings. The temperature in the ground remains relatively constant throughout the year. A GHP can transfer heat from the ground into the building during the winter and transfer heat back into the ground during the summer. Thus, the ground acts as a heat source in winter and a heat sink in summer.

Renewable energy is defined as electricity generated from renewable sources. GHPs do not generate electricity. They do not fit the definition of a renewable energy source. Of the thirty seven states that have mandatory or voluntary RESs, nine allow GHPs to earn alternative energy credits by displacing electricity and/or fossil fuels used for heating or cooling (see Table 1 below). The alternative credits can substitute for conventional RECs.

According to the U.S. Environmental Protection Agency, GHPs can save homeowners 40 - 60 percent in heating and cooling costs over conventional heating and cooling systems. GHPs use electricity, but far more efficiently than traditional air conditioning systems for cooling. Since they reduce the total amount of electricity used, usually during peak load hours, they always reduce CO2 emissions when used for cooling. Nationally, 22 percent of the electricity used in homes is used for cooling. Thus, in states where lots of cooling takes place GHPs can reduce electricity usage considerably. But since installing a GHP is very expensive, no one is going to invest in one simply for cooling.

When GHPs are used for heating the impact on total carbon dioxide (CO2) emissions can vary due to many variables like local climate, building size, the efficiency of the GHP itself, etc.


There have been two bills recently enacted which are considered model bills for treating GHPs like tradition renewable energy sources for awarding RECs — one in Maryland and one in New Hampshire. The two dominate points in support of the bills were cost and efficiency. The two laws only require that the GHP show energy savings and not emissions savings. But, the goal of state RESs is to reduce CO2 emissions by reducing the amount of electricity produced from coal. RESs are not about saving energy or money per se. Energy efficiency is only relevant if it results in a net reduction in CO2 emissions.


Thus, allowing RECs for GHPs probably only makes sense in states where the consumption of electricity for cooling is high and the consumption of fossil fuels for heating is low, or if the GHP always displaces heat from electricity — not heat from fossil fuels.

In Table 3 (below), states in warmer climates with high annual usages of electricity for heating and that do a lot of cooling, like Arizona or Texas, are states where including GHPs in their RES programs might reduce total CO2 emissions. States in cooler climates with low annual usages of electricity for heating and that do little cooling, like Michigan or New Hampshire, are states where using GHPs in their RES programs is likely to increase CO2 emissions — as a general rule.

renewableenergyworld

[Graeme]

Marubeni Targets National Park in Japan for Geothermal

Marubeni Corp. (8002), the biggest investor in electricity generation among Japan’s trading houses, is working on how to revive the geothermal industry and tap heat that powers volcanos as an alternative to nuclear reactors.
The effort would draw pools of underground heat with a potential of double the current capacity of geothermal projects operating worldwide. That would help Japan shift away from atomic reactors that provided 30 percent of the nation’s power before the accident in Fukushima two years ago.

“We’ve focused on hydro before,” Masahiro Uegaki, assistant general manager of Marubeni’s domestic power projects, said in an interview at the company’s headquarters in Tokyo. “Recently we are developing solar, wind and other renewable energies. Geothermal is one of our new activities.”

Expanding geothermal would benefit turbine makers such as Mitsubishi Heavy Industries Ltd. (7011) and Toshiba Corp. (6502), both of which already supply equipment outside Japan. Marubeni’s study is possible since the government last year eased rules to allow geothermal in protected national parks, part of an effort to boost supplies of renewable energy.

bloomberg

[ROCKMAN]

It seems as though low temp geothermal isn't being applied today in many cases where it would be economical. At least 10 years ago I saw a film of a project in Atlanta. It was for a nursing home under construction and was going to be used the system to supplement heating. Obvious very cheap equipment and materials compared to a development like The Geysers in CA. And just as obvious more universal potential. I don’t recall any of the metrics of the project but given that it passed economic muster when energy costs were less I would imagine it would make more sense today. I suspect the cost of the system was amortized into the construction cost of the facility and thus financed. Not sure how affordable it would be for residential users down here in Houston but we constantly have small business buildings and strip centers going up. I've never seen such systems advertised locally. But all it takes is a water well drilling rig and we have lots of those around. I used them all the time to drill supply wells for my drilling projects.

[Graeme]

I'll try to find more details about GHP but this article indicates a growing trend.

Oil Heating Set To Disappear By 2025

Instead of publishing the long awaited proposals for the UK's Renewable Heat Incentive (RHI) last week, HM Government outlined the next steps in the implementation of the UK's national heating strategy, first published last year.

The proposals make grim reading for the UK's oil heating industry. Heating oil is effectively set to disappear from the UK's energy mix by 2025. Around 900,000 homes in England, 430,000 homes in Northern Ireland, an estimated 120,000 homes in Scotland and 113,000 homes in Wales currently depend on heating oil in the UK. Most of these homes are in rural areas, beyond the reach of the gas network. A smaller number of homes in rural areas are dependent depend upon other fuels for space and water heating, including LPG and solid fuel. And if the government is to be believed, all those homes are going to have to find something else to replace their existing heating systems with over the next decade or so.

Underlining the extent of the crisis now facing the UK oil heating industry, DECC's proposals didn't even mention B30K Bioheating Oil. Developed by OFTEC and championed by its Director General, Jeremy Hawksley, B30K was at one point described as a 'drop in' replacement for traditional kerosene fuelled heating oil systems. Its omission, serves to add weight to the concerns expressed by some, over the ability of OFTEC to lobby effectively on behalf of the industry it purports to represent.

Speaking at the publication of the proposals, Energy & Climate Change Secretary, Ed Davey said, "If we can increase the use of low carbon heating in our homes, businesses and across our economy, we can help reduce our dependence on costly carbon intense fossil fuels. Last year we launched the UK's first ever heat strategy, to get us on the right pathway to decarbonisation and today we have published an update on the progress we have made so far, alongside a new set of actions specifically targeted at industrial heat, urban heat networks and heat in buildings.

"Many homes and businesses across the UK have already switched away from fossil fuels and are using kit like biomass boilers, heat pumps and solar thermal panels to provide heat, thanks to Government support, and I want to ensure even more householders and organisations get on board."

At rural installations, ground source and air source heat pumps appear to the technology of choice for future heating systems - displacing existing oil fired central systems in the process. By 2017, it is projected that ground and air source heat pumps will have overtaken heating oil. Oil fired central heating systems are set to all but disappear by 2025.

oilfiredup

[Graeme]

Geothermal Heat Pumps

Topics Covered
Introduction
Types of Geothermal Heat Pumps
Closed-loop System
Open-loop System
Hybrid Systems
How do Geothermal Heat Pumps Work?
Benefits of Geothermal Heat Pumps
Disadvantages of Geothermal Heat Pumps
References

Introduction
Geothermal heat pumps are otherwise known as water-source, ground-source, earth-coupled or geoexchange heat pumps.

They use earth's constant temperature as the exchange medium instead of outside air temperature. This enables the system to reach high efficiencies of 300% to 600% on cold winter nights, compared to 175% to 250% of air-source heat pumps.

Like any other heat pump, geothermal and water-source heat pumps can also heat, cool and supply hot water for domestic purposes. Some geothermal system models come with variable fans and two-speed compressors.

azocleantech


SA geothermal explorer Geodynamics commissions Habanero pilot plant at Innamincka

SA-FOCUSED hot rocks explorer Geodynamics has started commissioning operations at its long-delayed 1MWe Habanero pilot plant, sending its shares soaring.

The plant will be fully commissioned by end April with the trial to run until August, Geodynamics announced today.

The commissioning process involves the introduction of hot brine flow from its production well Habanero-4 into the plant to warm-up the brine system and commence generation of steam.

The Habanero-1 well will be commissioned as an injection well.

A closed loop created between Habanero-4 and Habanero-1 provides hot circulating geothermal brine used to generate the steam powering the Habanero Pilot Plant turbine.

"It is a significant achievement in Australian and global geothermal exploration, and importantly, it will be the first Enhanced Geothermal System (EGS) derived power in Australia," the company said.

adelaidenow

[Graeme]

New Work: ‘Geothermal Heat Pump Manual’

Spring is finally here, and New Yorkers are happily turning down their thermostats after an especially long, cold winter that saw an increase in energy bills. An alternative to costly, conventional energy sources, geothermal heat pumps (GHP) offer a cheaper, cleaner and more efficient way to heat and cool buildings. GHP systems take advantage of the relatively constant temperature of the earth’s interior, using it as a source or sink for heat. For cooling, heat is extracted from the building and dissipated into the ground; for warmth, heat is extracted from the earth and pumped into the building.

The New York City Department of Design and Construction (DDC) has identified GHP as an important strategy for developing sustainable energy in the city, especially for the reduction of greenhouse gas emissions. Working with the DDC, Pentagram’s Eddie Opara and team have designed Geothermal Heat Pump Manual: A Design and Installation Guide for New York City. The book is the companion volume to the DDC’s Water Matters: A Design Manual for Water Conservation in Buildings, designed by Opara by 2011. GHP systems are part of PlaNYC 2030, the city’s official plan for sustainability, and the manual’s guidelines will be the subject of a special roundtable presented by the Urban Green Council on April 10.

While common in other parts of the US, GHP is still relatively new to New York City, and the manual provides a definitive how-to guide for the systems and how they can be integrated into sustainable building projects. Like Water Matters, the GHP manual helps organize and outline complicated processes for a technical audience, in this case geologists and geothermal engineers. The content of the new book is even more complex than Water Matters, involving more intricate systems and larger project teams, and the book’s design presented a greater challenge for Opara and his team to make the information accessible, accurate and easy to use.

Geothermal Heat Pump Manual provides an invaluable resource for the DDC as it continues to advocate for clean, affordable energy in the city. The manual can be downloaded in PDF format here.

pentagram

Tomorrow, I hope to have some information which could be ground-breaking for the EGS industry. I have been communicating with a US geologist about new techniques that he is pioneering but I want his permission to reveal what he is doing.

[Graeme]

I just received permission from my US contact to post the following message:

Hello Graeme:

Yes of course you may do so..

The fracking method has some technical details to work through and the drill is in prototype design currently. Awaiting further financial arrangements which should be set in June or early July.

Am planning trials for the fracking later in the year once the tool designs are finalized..

The drill design will go into physical form of the prototype for testing and trials this fall and will be on-going during the winter according to the current schedule.

I have other information but that is all I can reveal at this stage.

[Beery1]

Another pipe dream, I fear. This is never going to be a significant source of energy. It's just not.

We need to stop flailing around for potential energy sources to keep society burning fuel at our present wasteful rate - it's not going to happen and even if it could happen, no sane person should want it.

The only sensible way forward is to power-down and power-off. We don't need new technology for that. All we need is what's going to happen anyway - a slow running-out of fossil fuels and a return to sustainable methods of travel, of work and passive methods of retaining heat and cool when we need them.

[Graeme]

Yes you are quite right. EGS in the US by itself is not going to be enough to supply electricity needs. But every little bit will help especially if it is used efficiently. Worldwide EGS may be significant however. We'll have to wait and see what develops.

[Graeme]

France fractured by fracking-like geothermal projects

It is an existential question in France: When is fracking not fracking? The country is pushing ahead with plans to harness geothermal energy from smouldering rock deep in the Earth's crust using drilling methods the oil industry says are like hydraulic fracturing, or fracking, which France outlawed in 2011.

Environment Minister Delphine Batho awarded two geothermal exploration licences in February and said 18 more were in review. Some will tap into volcanic heat by permeating rock in a process called ''stimulation'' that blasts acid and water into fissures to release heat. That may be seen as similar to how US explorers fracture fossil fuels from shale rock with chemical cocktails.


Acid will be used in geothermal rock cracks as opposed to the chemicals and sand used by the oil and gas industry, while hydraulic pressure will be lower, according to Mr Vernier. Nevertheless, this ''stimulation'' could create seismic events like one caused by the Soultz-sous-Forets project, which had a magnitude of 2.9 and was felt on the ground, he said.

A project in Basel, Switzerland, was shut down in 2006 after causing an earthquake of magnitude 3.4.

The hazards posed by the type of drilling required for the French geothermal projects are ''likely to be lower than for gas fracking,'' said Stuart Haszeldine, a geologist at the University of Edinburgh. ''There still are risks.''

Rock that is as many as six kilometres underground is under ''critical stress'' that could be perturbed by acid or cooling, creating tremors or cracks, he said. Pressure on borehole casings could also cause leaks and water contamination.

smh

[Graeme]

I'll focus on news stories for conventional geothermal and EGS in this thread. I see that there is another geothermal thread where I'll post articles on geothermal heat pumps.

Ormat to Provide 330 Megawatts of Geothermal Energy in Sumatra, Indonesia

A big congratulations to Ormat technologies of Yavne, Israel for signing a $254 million deal for providing geothermal energy in Indonesia! The first phase of the 330-megawatt Sarulla geothermal power station in Sumatra is due to begin operating in 2016.

Sumatra lies in one of the most geologically active parts of the Pacific ring of fire and is known for numerous active volcanoes. The nearby volcano of Krakatoa was responsible for the largest eruption in recorded history and Sumatra’s Toba volcano was responsible for earth’s largest volcanic eruption in the past two million years.

It was about 5000 times more powerful than Mount Saint Helen’s 1980 eruption. Earthquakes, volcanic eruptions and the threat of tsunamis are unfortunate facts of life for the people of Indonesia.

Now for the good news, Indonesia has 40 percent of the world’s exploitable geothermal energy potential. It has been estimated that as much as 28 billion watts of geothermal energy potential is available there or the equivalent of 12 billion barrels of oil. It has been a long slow process tapping into this energy.

greenprophet

[Graeme]

Japan Considering 21 Geothermal Plans After Fukushima, METI Says

Japan is considering at least 21 geothermal projects as it searches for alternative energy sources after the 2011 Fukushima nuclear accident, according to data compiled by the Ministry of Economy, Trade and Industry.

Incentives for clean energy, including above-market rates for power derived from underground sources regardless of plant size, are encouraging the projects, Shinichiro Fukushima, an official in charge of geothermal energy at the ministry, said at a briefing in Tokyo today. The 21 possible projects include seven where small-sized binary turbines may be used, he said.

Before Fukushima and the beginning of the incentive program in July, Japan’s geothermal power development was mainly comprised of large-scale projects concentrated in the Hokkaido and Tohoku regions in northern Japan as well as the southern island of Kyushu, Fukushima said.
“Even very small projects are now worth the cost with the introduction of feed-in tariffs,” he said.

Japan has 17 geothermal plants currently in operation with a total capacity of 520 megawatts, according to the ministry. The 21 projects now under consideration are at different stages of research, Fukushima said.

bloomberg

[Graeme]

Success With Enhanced Geothermal Systems Changing The Future Of Geothermal Power In The U.S.

Ormat Technologies, Inc. (NYSE:ORA), the U.S. Department of Energy and GeothermEx successfully produced 1.7 additional megawatts from an Enhanced Geothermal System (EGS) project inside an existing wellfield in the U.S. This is the first EGS project to be connected to the electricity grid. Using innovative subsurface technologies, research and development teams stimulated an existing sub-commercial injection well resulting in a 38 percent increase in power output from brine at Ormat’s Desert Peak 2 geothermal power plant in the Brady complex, Churchill County, Nev.

Support for the project included $5.4 million in direct DOE funding, $2.6 in million investment from Ormat, and more than four years of collaborative work with partners including Lawrence Berkeley National Laboratory, U.S. Geological Survey, Sandia National Laboratory, University of Utah EGI, Temple University and TerraTek.

By expanding existing hydrothermal fractures deep within the Earth’s crust, EGS technology enhances the permeability of underperforming wells, making it possible to extract additional heat from a reservoir’s rocks and inject geothermal fluid at higher flow rates. Ormat’s air-cooled power plants are the technology of choice for EGS developments, as they don’t consume water in the conversion of energy into electricity; all the geothermal fluid is re-injected, to be produced again after heating in the reservoir.

dailymarkets

The Next Challenge for Geothermal: Turning the Corner Towards Private Investment

Early this year, the U.S. geothermal industry caught a rare win with the passage of a PTC provision that allows projects to qualify for the tax credit as long as they are "under construction" by the end of the year. Many had been hopeful that the provision would help kickstart geothermal development in the U.S. Today, however the industry is still waiting for a clear definition of what "under construction" means, which is making it difficult for investors to feel confident enough to pull the trigger on new projects.

While the U.S. industry waits for projects to start moving at home, many are moving their interests to emerging market development and clean energy exports, especially in booming geothermal markets like East Africa and Southeast Asia, according to Karl Gawell, executive director of the Geothermal Energy Association. "Most people in the energy business know that you don’t work in isolation. You may be based here in America, but you are also selling equipment and operations on the worldwide market."


To help get these projects started, the World Bank recently announced a $500 million investment fund to aid in the exploration and drilling phases of project in emerging markets – one of the most costly and at-risk phases of geothermal development. When looking at the value chain of geothermal development, about 10 percent of the costs goes into test drilling, whereas with wind, for example, resource validation is only about 1 percent of the project cost, according to Pierre Audinet, clean energy program leader of ESMAP at the World Bank.

“The World Bank doesn’t want to run commercial operations, they want to use seed capital for funding issues that will bring in private capital,” said Gawell. “This is the next challenge for geothermal – whether it can turn that corner.”

renewableenergyworld

[Graeme]

Geothermal Energy Expected to More Than Double by 2030

Geothermal energy capacity will more than double by 2030 as developing economies including Indonesia, Chile and Kenya take advantage of natural resources, according to Bloomberg New Energy Finance.

Global capacity is estimated to reach 28.3 gigawatts in 62 markets in 2030, compared with 11.4 gigawatts in 25 markets last year, Mark Taylor, a New Energy Finance analyst, said today at the U.S. and International Geothermal Energy Finance Forum in New York.

“Geothermal is being seen as a development tool now, not just a niche market,” Taylor said. “It can be used as a driver of economic growth.”

Capacity in Indonesia, Southeast Asia’s fastest-growing economy, is estimated to more than triple to 5.6 gigawatts and account for 20 percent of output, becoming the world’s largest market. It ranked third in 2012 at 1.3 gigawatts.

Chile will increase to 1.9 gigawatts from none and Kenya to 3.5 gigawatts from 202 megawatts, according to data compiled by London-based New Energy Finance.

bloomberg

[Graeme]

Geothermal Looks to Confront Risk

The attraction of geothermal energy is that it is a baseload, emissions-free, renewable energy source -- and the challenge is that finding it and producing it puts capital at risk.

Between March 2012 and February 2013, seven U.S. geothermal projects came on-line. In 2012, U.S.-installed geothermal capacity grew by 147.05 megawatts, a 5 percent growth rate. Though up to twice as many plants could become operational in 2013, compared to the wind industry’s 13 gigawatts in 2012, and the solar industry’s 3 gigawatts, those still are not impressive numbers. The Geothermal Energy Association (GEA) U.S. and International Geothermal Energy Finance Forum in New York City took up the question of what’s holding the industry back.

Average development time for a geothermal project, beginning with exploration and exploratory wells, is 7.5 years, explained GEA Executive Director Karl Gawell. Commercial financing only comes when the resource is proved and power plant construction begins up to three years into the project cycle.

“Almost half the cost can be proving the resource,” Gawell said. “If all of that is off the balance sheet, it is going to be hard to get the project done. And during the financial crisis, what we’ve heard is that the level of risk lenders are willing to take is pretty close to zero.”

“As you get further along, and you have more resource proven,” agreed Marathon Capital VP Sid Sinha, “you can go to the bank and construction finance lenders and get financing. When you go operational, you can do some of that financing with long-term capital.”

What will positively impact development, Gawell said, is getting lenders to understand the risk. One potential investor said he was attracted to geothermal when he saw its long-term, steady payout. “But he had to get past the risk,” Gawell said. “As a community, we have not involved lenders at that level.”

greentechmedia

[ROCKMAN]

Graeme – What are your personal feelings about low temp vs. the really hot stuff? Long ago I worked for the company that owned The Geysers geothermal plants in CA and made a brief visit. Obviously impressive. But I’ve also seen a film on an impressive low temp op in Georgia. It was to supplement a nursing home under construction. The Geysers create a lot of energy but there aren’t many such opportunities. OTOH there may be hundreds of thousands of low temp ops that could work today. Might still be too much capital/logistics for many homeowners but commercial ops along with schools and other govt facilities would seem feasible. But I get the sense that few are looking into that possibility very deeply.

[Graeme]

Hi ROCKMAN, Yes I think there is considerable potential for exploitation of low temp geothermal resources in Georgia. I think I mentioned in my first post in this thread this potential. I'm sure that commercial ops are looking into this as you say. They will know who to contact for professional advice. In case somebody from that state views this, I could suggest the IGSHPA as an initial port of call.

Here is some news for conventional geothermal (and possibly GHP construction too) in USA:

Good News From the IRS on the PTC for Wind and Geothermal

Some good news from the IRS on April 15.

A newly issued definition from the IRS has removed the last element of uncertainty attached to the extension of the production tax credit (PTC). The PTC is crucial to the wind and geothermal industries.

The IRS definition of "under construction" was necessary because an extension of the credit passed on January 1, 2013 replaced language in the previous tax credit provision that required projects to be in production by the deadline to earn the credit. The new language allows the tax credit to apply to projects that are under construction by its expiration.

The new language was intended to compensate for the fact that lawmakers did not provide ongoing support to developers earlier in 2012. The uncertainty produced by that led to an abnormal shift in the wind business. Developers put their full effort into getting projects into production in time to qualify for the credit and virtually ignored planning and investment for 2013.

The result was record-breaking installations in 4Q 2012 and virtually no orders for 1H 2013.

Most wind industry forecasters expect orders to pick up now that the final element of uncertainty has been eliminated, but because large wind equipment manufacturing requires a long lead time, forecasters do not expect development to pick up until 2H 2013. The new under-construction provision should, however, drive development activity well into 2014.

According to IRS Notice 2013-29, released on April 15, wind, geothermal, biomass, landfill gas, incremental hydroelectric and ocean energy projects that meet one of two under-construction standards by December 31 of this year will qualify to either get: 1) a tax credit of $0.023 for every kilowatt-hour produced for the first ten years of the project’s life, or 2) an investment tax credit equal to 30 percent of the project’s cost when construction is completed.

To meet the "under construction" qualification, developers must either: 1) show “physical work of a significant nature” has begun on their project, either a) at the site, or b) in a factory to which the developer has given a binding order for specially designed equipment, or 2) show that at least 5 percent of the total project cost has been incurred.

There is no completion deadline for projects that meet the "under construction" standards by December 31.

greentechmedia

[Graeme]

Cracking Rock to Get More from Geothermal Fields

Geothermal company Ormat last week said it connected the first enhanced geothermal well to the electricity grid, adding an additional 1.7 megawatts to the Desert Peak project in the Nevada desert. It’s one of a number of enhanced geothermal projects partially funded by the Department of Energy. The approach used at this project, which increased production by 38 percent, could be replicated to expand production at many other existing wells, says Paul Thompson, director of policy and business development at Ormat.


“If we can go to all the hundreds or thousands of wells that are unproductive and tinker with them to make them productive, this is a game changer,” Thompson says. Drilling a brand-new well costs between $4 million and $7 million, whereas expanding existing resources is significantly less, he says.

In this project, Ormat pumped water from its existing hot-water source at a pressure between 800 and 1,000 pounds per square inch to create fractures in the rock. That allowed water to flow through a web of cracks at a much higher rate, going from 4 gallons per minute to 1600 gallons per minute, a change that made it commercially viable.

technologyreview

[Graeme]

Turkey rediscovers potential in geothermal energy

Turkey is rediscovering its geothermal energy resources.
Rich in geothermal resources, Turkey increased its drilling activities from 2,000 meters to 28,000 meters; and its utilizable heat capacity to 4,813 MWt by the end of 2012 with an increase by 46 percent in the last seven years.
According to Turkey's Mineral Research and Exploration agency (MTA) data, with its theoretical geothermal potential (31,500 MWt), Turkey ranks 7th in the world and 1st in the Europe.

The number of geothermal areas, which was 173 in 2005, reached 225 and 145,000 meters of drilling was conducted at those regions by the end of 2012. Turkey's visible heat capacity went up by 130 percent and recorded 7,000 MWt in 2012.

worldbulletin

[Graeme]

Nevada Geothermal Energy Will Help Power Los Angeles

For the first time, geothermal energy produced in Nevada will come to California.

This renewable energy first is slated to occur before the end of the year, when Ormat Technologies fires up its Wild Rose geothermal power plant in Mineral County, Nevada. The company announced this week that the energy produced at Wild Rose -- expected to average about 16 megawatts -- would be sold to Southern California Public Power Authority under a 20-year agreement.

Here’s an interesting thing about this agreement: We actually know the price. “Ormat will sell the power to SCPPA at $99 per megawatt-hour with no annual escalation,” Ormat said.

That’s a competitive price compared to other new generation sources, and ten or fifteen years from now it could very well be a bargain. The Nevada geothermal will also help the Los Angeles Department of Water and Power (LADWP) -- which is buying the energy, with Burbank Water and Power, from SCPPA -- to chip away at its reliance on coal. LADWP has vowed to be coal-free by 2025.

“Given the location of the Wild Rose geothermal plant and the way it will interconnect with the transmission system, the power could ultimately serve as a replacement for coal power LADWP receives from the Intermountain Power Plant in Utah,” Aram Benyamin, senior assistant general manager-power at LADWP, said in a statement. “So when you think about strategy, this could really open up the northern Nevada geothermal area and help us achieve our goal to stop using coal by 2025 and allow better integration of renewable resources in our portfolio.”

Benyamin was referring to a new transmission line being built by NV Energy that will make the Western grid more flexible for renewables.

greentechmedia