The Geothermal Energy Association applauds Congress’ efforts to support the expanded use of the largely untapped domestic geothermal energy resource base. The Energy Policy Act of 2005 (EPAct) took major strides towards promoting greater use of geothermal energy and diversifying the mix of energy in the United States by extending the federal production tax credit to include new geothermal facilities. In 2007, Congress built upon this measure by enacting the Energy Independence and Security Act which includes the Advanced Geothermal Energy Research and Development Act of 2007. These provisions define a bold new vision of public-private partnerships and federal research and information initiatives that could help bring substantial new geothermal energy sources online to meet national energy needs.

In 2008, we urge Congress and the Administration to build upon these important measures.

Extend the placed in service deadline in the Section 45 Production Tax Credit ( PTC) to support sustained geothermal power development. The current placed in service deadline of the PTC is too short for most geothermal projects.  To achieve sustained geothermal development, Congress should immediately amend the law and extend the placed in service deadline by at least 5 years, to January 1, 2014.

Amend Section 45 to provide greater flexibility for geothermal facilities by allowing them to qualify once they are under construction. The Energy Policy Act amended the Section 45 Production Tax Credit to include new geothermal facilities on the same basis as new wind facilities. This has provided the incentive needed for companies to begin working to develop new geothermal power sites in Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah and other states. However, given that geothermal plants have long construction lead-times (at least 2-3 years and because the law requires projects to be “in service” by the deadline to qualify, it poses extreme risk to developers. If projects are even one day late, the entire credit is lost. As a result, some projects are not built, some are downsized in order to meet the deadline, and those that take the risk of building will be forced to bet on a future extension of the placed in service date. This uncertainty will result in higher financing costs and, thus, higher power costs for consumers.

Fund and implement the provisions of the Advanced Geothermal Energy Research and Development Act of 2007. This new authorization by Congress seeks to revitalize geothermal research and tap the full potential of the resource in light of recent reports by the Massachusetts Institute of Technology (MIT) and National Renewable Energy Laboratory (NREL). The authorization defines key actions to move technology forward across the spectrum of geothermal resources so that geothermal energy can be a major energy source in the future.

GEA supports the new program of geothermal research as well as the January 1, 2012 deadline established for completion of a comprehensive nationwide geothermal resource assessment as set forth in the 2007 energy bill (PL 110-140). Now, DOE needs to implement this new direction, OMB and the White House need to support adequate budgets to achieve its goals, and Congress must appropriate the funding at the levels authorized.

Expand and accelerate geothermal initiatives on the public lands. BLM’s Programmatic Environmental Impact Statement (PEIS) should be completed as a top priority; planning, leasing and permitting activities on BLM and National Forest lands should be adequately funded and conducted promptly; the USGS should conduct a comprehensive nationwide geothermal resource assessment that examines the full range of geothermal resources and technologies, including low and moderate temperature resources, oil and gas field’s with co-production potential and geo-pressured resources; and USGS should collect and make available to the public geologic and geophysical data to support exploration activities. Appropriations (and dedicated funding) of $25 million annually should be provided for these agency efforts.

Unleashing the Potential of Geothermal Energy
While only a small fraction of the geothermal resource base is utilized today, it already provides significant energy for our nation. The United States, as the world's largest producer of geothermal electricity, generates an average of 16 billion kilowatt hours of energy per year. With continued federal and state support, much more geothermal generation is possible. 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.

Within the next ten years, it is estimated that continued federal and state support could lead to the development of between 8 and 15 gigawatts of geothermal electric power to help meet national energy needs. Development of this additional electric power capacity will not only bring reliability to the power system, but would create over 10,000 new full-time jobs and stimulate over 70,000 person-years of construction and manufacturing employment. With advances in technology, even more of the largely untapped domestic resource base could be developed. Geothermal energy’s role among clean energy technologies is important to recognize. It is one of the few technologies that can supply, clean, reliable, low emission fuel that is also a baseload resource providing power 24-hours a day, 365 days a year.

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 would displace fossil fuels that would otherwise be needed for these purposes.

With expanded support from DOE, new areas of geothermal potential can be developed. Co-production of electricity from oil fields holds the promise of thousands of megawatts of new power, and geopressured resources hold even greater heat and natural gas potential if advanced technology can support their economic development. As technology develops further, geothermal energy will move progressively along the continuum towards enhanced geothermal systems which hold the promise of hundreds of thousands of megawatts of clean power across most of the nation.

 

For more information contact:

Geothermal Energy Association , 209 Pennsylvania Ave SE , Washington , D.C. 20003

Phone 202-454-5261, fax 202-454-5265; email research@geo-energy.org