Geothermal Power Has A Funding Problem

Wind, wave and solar get a lot of attention in the media, probably because there has been a lot of high profile activity around these technologies. Geothermal energy is a strong alternative energy source but, for whatever reason, doesn’t seem to get quite as much press.  A recent report from the Geothermal Energy Association (GEA) indicates that could present a problem for the long term success of geothermal energy projects.

First, the good news is that the U.S. Geothermal Power Production and Development Report shows that, as of now, the geothermal industry is producing clean power in nine states and developing 146 projects across 15 states. Right now, the United States ranks number one in geothermal energy production, generating approximately 3,102 MW. According to the GEA, that’s enough to power the residential populations of San Francisco, Portland and Seattle combined.

Neal Hot Springs, geothermal power project, Oregon

image via U.S. Geothermal

Currently, geothermal electric power is being generated in states including Alaska, California, Hawaii, Idaho, Nevada, New Mexico, Oregon, Utah and Wyoming but, according to the report, there is a lot more potential  waiting to be tapped. According to the GEA, if all of the geothermal projects that are under way but in early stages were to be brought online, it would triple U.S. geothermal power production. Currently, the lion’s share of the geothermal  industry is concentrated in the western U.S. but pilot projects are beginning to show development potential further east.

Future growth, however, will require more funds. “While the government incentive programs may have given the geothermal space a lift in terms of initiating new activity, it’s going to take additional support from private investment…” said Saf Dhillon, Investor Relations, U.S. Geothermal Inc.

Perhaps these new reports will help generate awareness that the industry needs. For the first time, the GEA’s annual report was produced under a reporting system known as the “Geothermal Reporting Terms and Definitions” with the intent to increase the accuracy and value of the information presented. These “terms and definitions” act as a guideline to project developers in reporting project development information to the GEA.

“The new system increases the precision of our reports,” said GEA Research Associate Dan Jennejohn. “By providing the industry and public with a lexicon of definitions and a guideline to determine phases of development, we can better asses a geothermal project’s position in the development timeline.”

  • Paul

    Thanks for the article on geothermal’s current contribution and potential. One aspect that is not addressed is the uncertainty created by the govenment incentive programs. These programs have a relatively short time horizon and do not support the longer term development cyle required by geothermal. A project just getting started today will not be able to access these programs unless it is completed by the end of 2013, a near impossibility given the permitting and financing process required to bring a plant to production. For these programs to support a sustained ongoing program of geothermal development, they need to maintain incentives with a time horizon of at least five to seven years in the future.