Geothermal in U.S. stalls as global grows
March 2, 2015
The market for geothermal energy last year remained stagnant in the United States as it continued to grow in the rest of the world.
Only two new power plants were brought online in the U.S. and many projects here nearly ready to produce energy remain stalled because they lack a power purchase agreement with a utility.
"Growth is strong worldwide, but the U.S. market is in a lull," said Karl Gawell, executive director, Geothermal Energy Association in Washington, D.C., which last week released an annual industry report.
The industry expanded 5 percent last year for the third year in a row, due almost entirely to new production in Turkey, Kenya, Indonesia and the Philippines, according to the report.
In 2014, 21 new power plants added about 620 megawatts of new capacity worldwide.
In the U.S., a 1.5 MW plant in Klamath Falls, Ore., operated by the Oregon Institute of Technology and a 2 MW plant in Surprise Valley, Calif., owned by Surprise Valley Electric Corp., went online last year.
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Ben Matek, GEA industry analyst and research projects manager who prepared the report, said geothermal can be price competitive with its main renewable energy competitor, solar, which is priced under $0.10 a kilowatt now.
"Ormat (Technologies Inc.) just signed a PPA for $0.09 a kilowatt," said Matek.
Ormat, based in Reno, last year was the leading supplier of equipment to geothermal providers, cornering 26 percent of the market, according to the report.
Ormat has nearly two dozen U.S. plants in some phase of development, including seven northern Nevada projects.
And last year the company purchased the remaining American geothermal projects from Alternative Earth Resources in one sign of continuing consolidation in the industry.
Several other countries, including in Latin America and Africa, have set goals for geothermal use and even where solar is gaining ground, such as throughout Africa, geothermal remains a competitive option for baseload power, said GEA's Gawell.
Gawell attributes the domestic slowdown in the industry to the lack of PPAs, uncertainty over federal legislation that provides incentives for renewable energy and a purchasing process that underestimates the cost of using other renewable energy sources such as solar and wind, making geothermal less competitive.
In Nevada, NV Energy late last year issued the first of three annual request for proposals for 350 MW of renewable energy in order to retire coal.
"We'll just have to wait and see who wins," said GEA's Matek.