EPA coal rules likely to boost geothermal

The Obama administration’s plan to reduce carbon emissions from coal-fired power plants holds promise to boost the geothermal industry that’s headquartered in Reno.

How much? When? Who knows?

Karl Gawell, executive director of the Geothermal Energy Association, was focused at his office in Washington, D.C., last week on proposed regulations from the U.S. Environmental Protection Agency that would require states to substantially reduce carbon emissions from coal-fired power plants.

While the details have yet to be nailed down, Gawell said it’s clear that the shift away from coal-fired plants could drive substantial development of geothermal plants in Nevada and other western states.

“The rule opens the door for renewables to play a big role,” he says.

Geothermal plants, which use the earth’s heat to create steam to drive power turbines, can be used by utilities to provide base-load power. They’re always on, unlike other renewable sources such as wind or solar that can be disrupted by a calm day or a passing cloud.

That, Gawell says, makes geothermal facilities an attractive substitute for coal-fired plants, which also are used for base-load generation.

That’s welcome news for the geothermal industry, which has struggled in the past couple of years. As prices for the natural gas that fuels many new power plants dropped sharply with the abundant supplies created by fracking, investments in geothermal facilities haven’t penciled out.

Nevada officials this year, however, began implementing a law that requires retirement of at least 300 megawatts of coal-fired generating capacity in the state this year, and retirement of another 250-megawatts of coal-fired capacity by the end of 2017. Geothermal developers will be competing to replace some of that capacity, but they acknowledge tough competition from other renewable resources.

Abundant geothermal resources are available in the West to cover the shift away from coal-fired generation.

In Nevada alone, the Geothermal Energy Association estimates that 60 percent of the identified geothermal resources have yet to be developed. In California, about 50 percent of the geothermal resource awaits development.

But the role that geothermal resources will play will depend largely on the plans developed by each individual state. The EPA’s proposal doesn’t set a nationwide regulatory plan, but instead requires states to develop their own.

Staff at the Nevada Division of Environmental Protection were digging into the 645-page EPA proposal last week as a first step in what is likely to a two-year effort to create regulations to reduce emissions from coal-fired power plants.

“It will be a long-term process,” says JoAnn Kittrell, a spokeswoman for the agency.

She notes, however, that some of the groundwork is in place. State law already requires the agency to monitor greenhouse gas emissions in the state and report to the Legislature every two years.

The most recent report found that Nevada accounts for about 0.7 percent of the nation’s emission of greenhouse gases.

NV Energy, the state’s largest utility, also was studying the EPA proposal last week, and executives of the company haven’t yet made any statements.

Gawell says the geothermal association plans to work closely with state regulators to implement policies that allow states to expand their geothermal production.

The proposed EPA rules also might bolster the position of U.S. geothermal companies in international markets, which have been growing at a 4-5 percent annual clip even as the domestic market has stalled in recent years.

Some foreign customers, Gawell notes, have questioned the commitment of the United States to reduction of greenhouse-gas emissions, and that’s dampened their enthusiasm to work with U.S. suppliers. Stronger rules by federal and state governments might help open some doors worldwide.

In the domestic market, however, the Geothermal Energy Association estimates that only 85 megawatts of new geothermal generation came on line during 2013.