utility geothermal working group update
DESCRIPTION
Utility Geothermal Working Group Update. Prepared for APPA E&O Conference Generation & Fuels Environmental Committee Round Table April 18, 2007 Al Pless, Economist Southeastern Power Administration (706) 213-3847 [email protected]. Utility Geothermal Working Group Sponsors. - PowerPoint PPT PresentationTRANSCRIPT
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Utility Geothermal Working Group Update
Prepared for
APPA E&O ConferenceGeneration & Fuels
Environmental Committee Round Table
April 18, 2007
Al Pless, Economist
Southeastern Power Administration
(706) 213-3847 [email protected]
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Utility Geothermal Working Group Sponsors
And the Geothermal Resources Council
Contact: Guy Nelson, Team Leader
(541) 994-4670
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What is the Utility Geothermal Working Group?
The UGWG is a group of utilities and ancillary associations formed under the US Department of Energy’s (DOE) Geopowering the West (GPW) Initiative
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UGWG Support
UGWG is supported by a number of organizations, including:
• Bonneville Power Administration (BPA)• DOE• Geothermal Resources Council (GRC)• Western Area Power Administration (Western)
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UGWG MissionTo accelerate the appropriate integration of three geothermal technologies into mainstream applications
• Power Generation• Direct Use• Geothermal
Heat Pumps
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Some UGWG Members
Arizona Public Service BPA
State Working Groups GRC
Sandia National Lab Western
Idaho National Lab Ormat, Int’l
South San Joaquin ID Palo Alto Utilities
Salt River Project Redding Electric
Seattle City Light Springfield UB
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Webcasts
Power Generation Direct UseGeoExchange Transmission Issues Public Participation Tale of Two BuildingsRECs Project 25x25Central Solar Option
www.repartners.org
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GRC Annual Meeting
• UGWG Annual Meeting in conjunction with the GRC meeting
• UGWG Members encouraged to submit papers for the GRC meeting
• Several sessions are designed to address Utility Issues
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AffirmationCost Effective Energy Efficiency is the first choice
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Duct Loss and Testing
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Geothermal Power Productioneothermal Power Production
UTILITY GRADE POWER UTILITY GRADE POWER Modular power plants are readily expanded as needs increase Power costs competitive with current fossil fuel technologies Base Load power produced 24/7 @ over 90% Capacity Factor Fuel Risk assumed by project operator not by consumer
SUSTAINABLE & ENVIRONMENTALLY SAFESUSTAINABLE & ENVIRONMENTALLY SAFE Many projects operating for decades at 98%+ availability Geothermal is non-combustion - near zero emissions
MINIMAL SURFACE USE - INDEPENDENT OF WEATHERMINIMAL SURFACE USE - INDEPENDENT OF WEATHER
FIELD-PROVEN TECHNOLOGIES - 9,000 MW WORLD WIDEFIELD-PROVEN TECHNOLOGIES - 9,000 MW WORLD WIDE
STRAIGHT FORWARD TO INSTALL, OPERATE AND MAINTAINSTRAIGHT FORWARD TO INSTALL, OPERATE AND MAINTAIN Projects developed over 3 year period - O&M by local staff
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Binary Cycle Power Plant
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Biomass - Energy Forestry Energy Crops
22000
Average Capital and Delivered Costs
Capital Cost (US$/kW)
Cost of deliveredenergy (US$/kWh)
Coal
Gas
Wind without PTC
0
1000
2000
3000
0 0.02 0.04 0.06 0.08 0.10 0.14 0.16
Solar Thermal Power
Solar Photovoltaic
0.12
4000
0.86 0.880.18 0.20
New Geothermal without PTC
Source: International Energy Agency & Ormat
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PROJECT DEVELOPMENT 20 MW netPROJECT DEVELOPMENT 20 MW net
1. Exploration & resource assessment $ 5.0 M 12 Months time frame
2. Well field drilling and development 15.0 12 Months time frame after completion of item 1
3. Power plant, surface facilities, & transmission 30.018 Months time frame with overlap of item 2
4. Other costs: 10.0o Commitment feeso Legal & Accounting fees o Consultants, o Interest during construction, ando Debt service and operating reserveo Construction contingencies and Developers fee 12 Month process which should begin after completion of item 1
5. TOTAL FINANCED COST FOR 20 MW PROJECT $ 60 MTo be provided as construction phase financing
6. Total Average Development Period 36 months
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Geothermal Power Economics
Gas Fired Combined Cycle Default Choice• Capital Costs + O&M Cost + Fuel Costs = 6.5¢ to
7.2¢ per kWh
Geothermal Power Costs• Capital Costs + O&M Cost + Fuel Costs = 6.5¢ to
9.5¢ per kWh• Geothermal Fuel Costs are zero, O&M costs are
less than 1.0¢ per kWh
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Geothermal Power Capital CostsInterest rates are the key!!!!
Capital Cost (CC) = $3000/kW
@ 0.2 Annual Factor, CC = 7.6¢/kWh
(reflects interest rates of ~ 18-20%)
@ 0.15 Annual Factor, CC = 5.7¢/kWh
(reflects interest rates of ~ 13-15%)
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Utilities with Geothermal Power in their Resource Portfolios
No. CA Power Agency – including Alameda, Palo Alto, Lodi, Lompoc, Roseville, Redding, Silicon Valley Power, and Turlock Irr. Dist.
So. CA Public Power Authority – including Anaheim, Burbank, Glendale, and Imperial Irr. District
Investor Owned Utilities such as PG&E, SCE, SDG&E, Idaho Power, and PacifiCorp
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UGWG Draft Steps to Implementing a Successful Geothermal Power Project
1. Delineated geothermal resource, with bankable
report, defining probable long term performance.
2. Financible Power Purchase Agreement from a Creditworthy purchaser.
3. Defined permitting path without pitfalls.
4. Credible developer with proven track record and experienced supply/subcontract team.
5. Control of entire geothermal resource to preclude competing interests for same fluid/steam supply.
6. Use of Proven Technologies.
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Geothermal Heat Pumps
Geothermal heat pumps use the stable temperatures of the ground (often vertical boreholes typically are 100 to 400 feet deep) as a heat source to warm buildings in winter and as a heat sink to cool them in summer. Also called ground-source heat pumps or Geoexchange units.
Illustration developed by NREL
Heating Mode
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Geothermal Heat Pumps
Cooling Mode
Illustration developed by NREL
Geo Heat Pumps
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Geothermal Heat Pump (GHP) Economics – Residential Customer Perspective
Assumptions: electric rate = 10¢ per kWh, gas rate = $1.50 per therm, res. gas heating use = 900 therms per year, res. electric AC use = 1660 kWh per year
Conventional HVAC costs (gas heating and electric cooling) = $1350 (heating) + $166 (cooling) = $1516/year
GHP costs (all electric) = $1061 + loop lease
Sources for assumptions are USDOE and USEIA. If the conventional source is propane, oil, or electric resistance for heating, GHP economics are better.
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Customer GHP Economics Continued
GHP makes sense if the loop lease is less than:
Conv. Cost – GHP costs =
$1516 - $1061 = $455/yr
Loop leases vary due to loan terms.
Assuming 6% - 30 year terms = $332/yr
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Other factors influencing GHP economics (customer perspective)
The Utility can sweeten the pot by offering1. A rebate (often in $/ton) and or
2. Favorable rate schedules and or
3. Low (sometimes even zero) loop lease rates
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Utility GHP Economics
Utility economics are less straight forward than customer economics.
Considerations include:
• Peak period (Summer vs. Winter)• Default heating option (electric (electric resistance vs. other)
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Utilities with GHP in Their Resource Portfolios
Colorado Springs, Delta-Montrose, First Energy, Kansas City P&L, Moon Lake, Otter Tail, Palmetto, Plumas-Sierra, and Yellowstone Valley.
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Future UGWG ActivitiesWorkshops and Webinars in conjunction with Western, UWIG, NREL, APPA, and NRECA
See repartners.org website for details
CREBs
-April 4th, Webinar
Heat Pump Economics
-Utility Energy Forum May 4
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Future UGWG Activities – Technology Related
•Waste Heat Recovery
•Utility Financing
•Geothermal Heat Pumps