Geothermal Technologies Office Overview Presentation to METI/JOGMEC/AIST| October 14, 2014

Jay Nathwani

Geothermal Technologies Office

Chief Engineer

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Jeff Miller

Director, DOE Japan Office

US Embassy Tokyo

What is Geothermal?

Geothermal Heat Pumps/ Ground Source Heat Pumps

Use relatively constant temperature of the earth as heat sink for commercial and residential heating and cooling

• Near ambient temperatures (~40-80°F)

• Shallow depths - trenches to wells hundreds of feet deep

Direct Use Geothermal

Use thermal energy (heat) from the earth directly for heating/cooling buildings, greenhouses, aquaculture, pools, spas, etc.

• Moderate temperatures (100-300°F)

• Wells hundreds to thousands of feet deep

Geothermal Power (Electricity Generation)

Use thermal energy (heat) from the earth to generate electricity

• High temperatures (>300°F) as well as low temperatures (<300°F)

• Wells up to many thousands of feet deep

• Baseload generation value proposition

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Conventional Geothermal System

Hot fluid (water, steam, or both) produced from wells

drilled into ground

Fluid passed through power plant to generate electricity

Fluid (usually) re-injected back into ground

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Enhanced Geothermal Systems

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• Sector Size: Moderate current installed capacity (3.4 GWe), growing 100-150 MW/yr

• Where: Historically concentrated in a few states – but that’s changing – the co-called “tyranny of geography”

• Production: Baseload - with flexibility increasingly valued by the market

• Financial: Investment profile can be risky – but improving due to technology

• Near Term: Lots of upside potential – new fields, new concepts, and new technologies.

• Growth Opportunity: Strong potential for longer term market growth and disruption.

US Geothermal Landscape – what you should know

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3.4 GW (Currently Installed)

Developing plants + New

Hydrothermal 30+ GW

100+ GW Greenfield EGS?

7-10 GW In- to Near-Field

EGS

U.S. Geothermal Growth

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Key current growth in NV, CA, OR, ID, CO, NM

Where Else Could We See New Growth Potential?

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• Cascadia

• Snake River Plain

• South Texas/Gulf Coast

• Appalachian Basin (and other interior basins)

• New Mexico/Colorado/Rio Grande Rift

• Select interior basins

• Eastern Great Basin

Note: PCA (Planned Capacity Additions), pilot plants and utility scale geothermal plants built in the first half of the 20th century and then decommissioned are not included in the above time series.

Source: GEA

Private Industry and Government Policy Collaborations Total Nameplate Geothermal Capacity in the U.S. as of January 2014

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Year

GRED I, II, III

CA reaches 2000 MW

PURPA

PTC, ITC

CA’s GRDA

First binary unit online

Industry Coupled Case Studies begin

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Explains strong industry interest in new prospects,

new technologies, and drilling

• Combination of early higher risk, higher costs, and regulatory uncertainty can impair projects

• Reinforces GTO focus on areas such as drilling cost, success probability, and new technologies

Adapted from ESMAP, 2012 Geothermal Handbook: Planning and Financing Power Generation

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2-4 years 1-2 years 1-2 years

GTO Major Initiatives Addressing the Risk Profile

GTO Major Initiatives

New Geothermal Opportunities “Play Fairway” Pathway to next-step drilling validation

Accelerating EGS Build upon R&D and demonstration project

successes EGS R&D Frontier Observatory for Research in

Geothermal Energy (FORGE) FOA

Tackling Deployment Barriers Regulatory Roadmap: Streamlining National Geothermal Data System: leveraging access

to data

Additive Value Low Temp Mineral Recovery Hybrid systems

NEW: Subsurface Engineering Crosscut (SubTER) Intra- and inter-agency effort to address common

subsurface challenges and better leverage DOE R&D

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Subprograms Leverage One Another Crosscutting Research

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Growth

Resource

Characterization

Non-unique signals, blind resources, cost, downhole tools limited by temperature

Reservoir Access

Comparative lack of high performance drilling tools for large diameter, high-temperature, rock drilling, cost

New occurrence models

Rotary steering

Remote sensing

Feasibility study for Horizontal wells

Technology Barriers GTO-Funded Solution Set Goal

High temperature tools

Play Fairway analysis

Hydrothermal

Blind resource signatures

Sustainability

Maintain productivity with minimal thermal drawdown and water losses

Leveraging O&G technologies

Hydrothermal sub-Program Technology and Engineering Needs

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Courtesy Baker Hughes

Courtesy US Geothermal

Peer Review reports

• Advance Key Innovative Exploration Technologies (IET)

• Targeted drilling and geophysical techniques

• Execute Play Fairway Analysis • Observational, analytical integration,

interpretation, basin and systems evolution

Hydrothermal Near-term Tools, Maps, Analysis, “Plays”

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Low

Temp/Co-

pro Growth

Cooling Technologies

Air-cooled systems are constrained in hotter areas of the arid-concentrated Western U.S.

Fluid Value

Lower temperature fluids are inherently less valuable for power generation than hotter; additional uses/revenue sources are needed

Energy Conversion

Improve efficiencies for lower temperatures, operation & maintenance, cost

Advanced working fluids

Technology Barriers GTO-Funded Solution Set Goal

Coproduction

Innovative conversion cycles

Improved binary system components

Leveraging O&G infrastructure

Hybrid cooling cycles

Hybrid Technologies

Materials Extraction

Low Temperature sub-Program Technology and Engineering Needs

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Courtesy UTC Power

Courtesy NREL

Courtesy UTC Power

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Low Temperature Expansion via Direct Use

• The low-temperature portion of the geothermal spectrum used for direct-use applications, contains the bulk of the readily accessible resource base.

• About 25% of US energy use occurs at temperatures <100C – mostly from burning natural gas and oil.

• If a resource is located near a direct use application, it may be more economically advantageous to use that heat directly, rather than electricity generation.

What is Direct Use? Direct use is the utilization of geothermal waters, without a power plant or heat pump, to provide: Space and district

heating/cooling; agricultural applications; aquaculture; water heating/chilling; industrial uses and water treatment/desalination.

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© by J.W. Tester, D.B. Fox and D. Sutter, Cornell University 2010

The Blue Lagoon in Iceland

• Low-Temperature Mineral Extraction - Resource

assessment and feasibility (additive value)

• Large-scale Direct Use: where does it make technical and commercial sense?

• Use geothermal hot fluids for heating and cooling

• Potential displacement of traditional baseload generation on site-by-site basis

• Large-scale development most likely along Atlantic Coastal Plain where population centers overlie basement granitic rocks with radiogenic heat-producing elements.

• Other potential basins include the Allegheny, Illinois and Michigan.

Low Temperature Near-term Materials Extraction, Direct-Use, Hybrid Systems

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Courtesy Bloomberg Courtesy Electratherm

O&G Well Temp, Gulf Coast

EGS

Success

Reservoir Access

New well geometries and concepts, optimized drilling

Reservoir Creation

Characterize local stress, zonal isolation, novel fracturing methods, increase fractured volume per well

Productivity

Increase flow rates without excessive pressure needs or flow localization

Sustainability

Maintain productivity with minimal thermal drawdown and water losses

Hard/Hot-rock drilling, completion technologies

Rotary steering

Zonal Isolation

Smart tracers

High-T sensors

Stress-field diagnostics

Cross-well monitoring

Diverter technologies

Technology Barriers GTO-Funded Solution Set Goal

Challenges to EGS Development Technology and Engineering Needs

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Snapshot of U.S. Efforts in EGS EERE-funded demonstration projects showing promising results

Desert Peak, NV. In FY13, successfully

stimulated an existing sub-commercial well -

first EGS project in US to produce commercial

electricity (additional 1.7MW) to the grid.

High T Hydrothermal

Reservoir

High T, Low Permeability Margins Nearfield EGS

Candidate Wells

Infield EGS Candidate Wells

(unsuccessful hydrothermal wells)

Infield and Nearfield EGS

Greenfield – where no

geothermal dev’t exists

The Geysers, CA. Created man-made reservoir

beneath the productive portion of a natural

reservoir. Potential to produce 5MW.

7-10 GW

resource

potential

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Nearfield – on the

periphery of a

hydrothermal field

Infield – within a

hydrothermal field in an

unsuccessful hydrothermal

well

Pathway to larger, more complex and

more challenging R&D efforts

• Ormat Technologies’ Desert Peak EGS project successfully supplied 1.7 MW electricity to the grid – a first-in-the-nation achievement

• DOE invested $5.4 million, with a private costshare of $2.6 million

• Desert Peak represents a near-term opportunity to develop EGS at lower cost and risk; potential for reserve additions at highly competitive costs ($0.02-05/kwh)

“If we can go to all the hundred or thousands of wells that

are unproductive and tinker with them to make them productive,

this is a game changer.”

Paul Thomsen, Former Director of Policy and

Business Development, Ormat Technologies

– MIT Technology Review, 4/2013

Desert Peak EGS Demonstration 1st US Grid-Connected EGS Project, 2013

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• Continue to grow existing fields (through in-field EGS) using thermal and multi-stage vertical-well stimulations, high-temperature thermally-degradable packers

• Integrated EGS R&D: Advance high-fidelity subsurface characterization via an integrated technical approach to EGS R&D

• EGS Field Observatory (FORGE), data availability and the validation and testing of replicable EGS development methodologies.

Re-completion of the well at Desert Peak

175-fold increase in well productivity

additional 1.7 MW

increased power output by nearly 40%.

graphics courtesy of Ormat

Technologies.

What’s Next for EGS? In-Field Stimulations, Horizontal Wells, Replicability

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6 - 7 Years

• High-risk / high-reward - Drilling technology, well construction and integrity - Advanced characterization tools and methods - Stimulation technologies

• Highly-integrated technology testing

• Live data site

• Explicit partnerships with the research community and other subsurface stakeholders

• Methodology for reproducing large-scale, economically-sustainable heat exchangers

Site Selection & Planning

Site Preparation & Characterization

Technology Testing & Evaluation Closeout

Frontier Observatory for Research in Geothermal Energy (FORGE)

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FORGE: Frontier Observatory for Research in Geothermal Energy

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FORGE Structure – Phased Approach

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New Selectees for GTO FY14 Funding Opportunities Projects Starting Fall 2014, 32 Projects, $18M

Play Fairway Analysis Integrated EGS R&D Value-Added Materials

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Permitting challenges A non-competitive process can doom projects

Data Access Creates more prospects, lower risk and cost, more efficient geothermal research and resource development

Financing Relatively small size of the Industry + perceived risk = project financing challenges

Grid Integration Solutions to supply geothermal electricity to the grid

Regulatory road-mapping and streamlining Initiative

National Geothermal Data Repository

Modeling

Demonstrations

Market reports

Working groups

Market Barriers Potential Solution Set Goal

A Clearer Pathway for Geothermal

Development

Techno-economic analysis

Key Market Barriers Many Elements Unique to Geothermal

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Launch of the National Geothermal Data System

“Best-in-class” data collection and usability effort

Addresses a

significant obstacle to geothermal development: lack of quantifiable data

Nine million inter-

operable GIS data points in 340 separate web feature and map services

Complies with the Administration’s Open Data Policy

Supports the Energy Department’s efforts to reduce cost and risks associated with widespread adoption of geothermal energy

Tools and

Models

Featured

Node

Training

Free software

for data

providers

Newest

Submissions

Access to

9 million

datapoints

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The Regulatory Roadmap is a set of flowcharts providing detailed information outlining the requirements for developing geothermal energy projects

Includes topics such as land access, siting, exploration, drilling, plant construction and operation, water resource acquisition, and relevant environmental considerations.

Geothermal Regulatory Roadmap

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•Geothermal Vision Study

•Validation of GTO-funded efforts, including tracking of commercial and emerging commercial projects

•Collaboration with CEQ, BLM, NFS, state regulators and industry to identify opportunities to responsibly optimize the geothermal development permitting process

• Life-cycle analysis of environmental impact of geothermal (GHG, water, footprint)

•Tools to enable public sharing of GTO-funded RD&D data and results

Systems Analysis – Near Term Techno-Economic Analysis and Validation, Regulatory Streamlining, Data Sharing

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Key Results on Funded Projects 2013

The Geysers EGS demonstration project in northern California successfully drilled a

new and distinct reservoir in a very low permeability, high-temperature region, yielding a sustained 5

MW resource. Desert Peak EGS demonstration project became the first grid-connected EGS project in

America to generate commercial electricity, with an additional 1.7 MW at the existing well-field.

Florida Canyon Mine Low Temperature project demonstrated the ability to take

advantage of geothermal power generation —as a byproduct of gold mining—to generate electricity for

less than 6 cents/kWh. This patented plug-and-play technology is the first in the nation to employ cost-

free geothermal brine at a mine operation.

An innovative exploration project at Caldwell Ranch in California culminated in

the confirmation of an initial 11.4 MW of equivalent steam—50% more than early estimates—from three

previously abandoned wells. First geothermal project where an abandoned steam field has been

successfully re-opened for production. The Geothermal Regulatory Roadmap—an online public tool that outlines federal, state,

and local regulation for geothermal development in selected geothermal-rich states—was cited in the

White House Report to the President, issued in May 2013, as a best practice.

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Oregon Institute of Technology: Commissioned 1.5 MW of newly-installed geothermal

power on campus, from a $1 million GTO award with $4 million match by Johnson Controls.

Pagosa Verde: GTO’s $3.9 million geothermal exploration project in Colorado is being matched by a

$1.98 million state bond, with a bill signing by Colorado Gov. Hickenlooper on May 30.

National Geothermal Data System: Deployed “best-in-class” geothermal data system June

FY14, and GEA award.

FastCAP: GTO’s $2.2 million investment has succeeded in development and commercialization of a

cutting-edge power system for geothermal exploration in high vibration, extreme drilling environments.

Surprise Valley Electrification Corp:* a non-profit rural cooperative, plans to go online with

a low-temperature, 3 MW geothermal power plant later this year, funded with $2M in GTO Recovery Act

funds, matched by a $3M Oregon Department of Energy Business tax credit. Waste heat from the plant

will be used for aquaculture, green house farming, and district heating.

* Expected

Key Results on Funded Projects 2014

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SNL Drilling: Developed and licensed a first-of-a-kind, high-temperature (480F), elastomer-free

drilling motor for use with pneumatic down-the-hole-hammers, for drilling in high temperature

geothermal formations.

Raft River (Idaho) EGS Demonstration Project:* Will complete two phases of thermal

stimulation that commenced in FY 2013, and will complete a large injection volume hydraulic stimulation

of an existing sub-commercial well. Through this combination of wellbore thermal conditioning and

hydraulic stimulation, this is targeted to become a commercial production/injection well.

Bradys (Nevada) EGS Demonstration Project:* Will have completed final stimulation stages by the end of FY.

AltaRock EGS Demonstration Project: * in Oregon will accomplish re-stimulation of an

existing well and completing a production well into the stimulated reservoir.

* Expected

Key Results on Funded Projects 2014, CONT’D

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Simbol groundbreaking:*Originally funded for $3 million in Recovery Act funds to

study methods of extracting valuable minerals from geothermal brines, this project will break

ground in October 2014 on construction of a commercial lithium extraction plant in the Salton

Sea area in CA – projected to be operational by 2016.

EGS demos:* Four of five EGS Demonstration projects completed, with increased

injectivity, comparable to commercial hydrothermal wells measured in EGS target wells.

Supercritical CO2:* First-ever CO2 geothermal thermosiphon test is expected at the

Cranfield, MS site.

Commercial hybrid cycle CSP-Geothermal binary power plant demonstration* completed, in cooperation with National lab and industry partners. Will

quantify potential benefits of different operating strategies and integration schemes of

commercial hybrid plants in real-world conditions.

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Key Anticipated Results on Funded Projects 2015

* Expected

Questions?

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