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Environment & Energy Report

California Geothermal Plan Released After Leasing Spike (1)

Jan. 23, 2020, 8:54 PMUpdated: Jan. 23, 2020, 9:41 PM

Geothermal energy development may be undergoing a renaissance in the West as the Trump administration and developers are renewing their interest in geothermal leasing on public land.

One of the biggest indicators of renewed geothermal interest occurred Thursday when the Bureau of Land Management published a final environmental impact statement on a California geothermal leasing area that sat on the shelf for eight years.

The statement is for the proposed designation of a 22,805-acre Haiwee Geothermal Leasing Area north of Ridgecrest, Calif., and west of Death Valley National Park.

The BLM first identified the area for geothermal leasing in 2009, but progress on creating the leasing area stalled after a draft environmental review was published in 2012.

The least-tapped renewable energy source in the U.S., geothermal power is a tiny source of low-carbon energy today. But with new renewable energy mandates in California, Nevada, and other Western states, geothermal is expected to grow.

Geothermal resources are most abundant in Western states, where companies can most easily tap underground heat to create steam to generate electricity.

Constant Renewable Energy

Public concerns about water use by geothermal power plants within the proposed Haiwee leasing area prompted the delay in the leasing area designation, BLM California spokeswoman Michelle Van Der Linden said.

A federal water use study was completed in 2016, the same year a renewable energy conservation plan for public lands in the California desert was finished, she said.

That plan called for new alternatives to the original leasing area proposal, Van Der Linden said.

The BLM is moving ahead with the Haiwee proposal after the bureau saw a spike in interest in leasing public lands for geothermal energy in 2019.

In September, the BLM leased more than 102,400 acres in the BLM’s annual Nevada geothermal lease sale, up from 27,100 acres in 2018, 19,200 in 2017, and 32,075 in 2016.

“We’ve definitely seen a lot of growth,” said Lowell Price, Fluid Minerals Program manager for the Nevada Division of Minerals, which regulates geothermal development statewide. “Just following those lease sales will give you a pretty good indicator as to what’s to come.”

Advances in Geothermal Exploration

Recent advancements in geothermal exploration techniques that help companies avoid drilling geothermal wells that fail to tap a sufficient heat source are contributing to the renewed interest in leasing, Bridget Ayling, director of the Great Basin Center for Geothermal Energy at the University of Nevada, Reno, said.

The successful September lease sale demonstrates that a decade-long decline in geothermal energy may be ending, she said.

The lease sale “suggests more expenditure on exploration—more chances of discovering more geothermal resources in Nevada,” she said. “It’s extremely positive and might be the start of the next geothermal exploration boom in the state.”

There is also renewed interest in geothermal because it can do something other renewables can’t—generate electricity all the time, said Paul Thomsen, vice president for business development for Reno, Nev.-based geothermal developer Ormat Nevada Inc.

“We have a lot of projects being developed in the West because we’re seeing renewed interest in geothermal to provide carbon-free 24-hour power to California and throughout the West,” he said.

Most solar power plants produce electricity only when the sun is shining, but a geothermal plant can produce renewable power and operate at nearly 100% capacity 24 hours a day, Thomsen said.

The company operates or is developing 74 geothermal power projects throughout the West and Hawaii and is Nevada’s largest geothermal electricity producer.

Nevada the Base for New Geothermal

The BLM is moving ahead with six geothermal power projects in Nevada totaling 314 megawatts of electricity generating capacity. Each project is in the approval process on federal lands, and all are scheduled for approval in 2020 or 2021, according to BLM data.

So far, the Trump administration has permitted only one new or expanded geothermal power project on federal land since it took office in 2017—a third phase of Ormat’s McGinnis Hills geothermal project in central Nevada, which the bureau approved in 2018.

Geothermal power represents about 0.4% of U.S. electricity generation as of 2018. There are currently 2.5 gigawatts of geothermal power production capacity nationwide today, but most of those power plants were built in the 1980s, according to the Energy Information Administration.

The BLM began leasing federal lands for geothermal energy in 1978 and formalized a federal geothermal leasing program under the George W. Bush administration in 2008.

Leasing Heads to Utah

In 2020, the BLM is planning geothermal lease sales for Nevada and Utah with more leasing expected soon in California.

Of the geothermal power projects in the approval pipeline, one is currently open for public comment.

The BLM is soliciting public comments until Feb. 10 on the proposed 40-megawatt North Valley Geothermal Project north of Reno, Nev. The BLM expects to approve the North Valley project by the end of the summer, BLM spokeswoman Heather O’Hanlon said.

Ormat, which is developing the North Valley Project, expects it to serve about 30,000 homes in California, and to produce electricity equivalent to a solar project four times North Valley’s size.

(Adds comments from Bridget Ayling, director of the Great Basin Center for Geothermal Energy at the University of Nevada, Reno, in new paragraphs 13 to 15. )

To contact the reporter on this story: Bobby Magill at bmagill@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Renee Schoof at rschoof@bloombergenvironment.com

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