The licence for the San Onofre nuclear power plant is due to expire in 2022, and the Diablo Canyon plant will not be permitted to continue generating after 2024, unless it applies for a 20-year extension. The facilities have a combined nameplate capacity of around 4,300 MW.
California’s once-through cooling policy which will prevent power stations from releasing hot water into the sea will result in the retirement or modification of 16 power plants from as early as 2015. In addition to these retirements, California also has to meet its AB32 goals to reduce the state’s greenhouse gas emissions to 1990 levels by 2020, said Karen Douglas, commissioner at the Californian Energy Commission.
Douglas told media at the Geothermal Energy Finance and Development Forum in San Francisco that CEC regulators were preparing plans to maintain grid capacity of 31,000 MW of peak load electricity.
She said: “This is getting back to long term thinking about how our electricity system is going to evolve – a combination of explicit state policies and obsolescence of current infrastructure. We have a current state policy to reduce our investments in the least efficient generation and we’re working with southern Californian utilities on their timeline for divesting from coal resources that they own. So we foresee only the need to backfill for resources that are covered by the once through cooling policy (OTC), but also coal resources that we’re currently dependent on.”
None of us expect those [nuclear] plants to be around by 2050
“We need to find a way to fulfill [power demand] once those plants are no longer operating,” she said. “As we think about our long-term climate goals we are considering the rate at which nuclear plants will be phased out of our system. Certainly utilities have plans and taken steps to get their licences extended for the San Onofre and Diablo Canyon. However, none of us expect those plants to be around by 2050.”
Douglas said that the CEC’s Desert Renewable Energy Conservation Plan was “unapologetically looking at how to maximise the geothermal output … because of its smaller land footprint and it’s also baseload or dispatchable power. We’re looking at 8,000 MW just in our back of the envelope assumptions of what we can do.”
Making Its Mark As A Power Source
Last year, geothermal provided 42% of California’s non-hydro renewable electricity. The Geothermal Energy Association estimates that up to “24,750 megawatts (MW) of geothermal energy resources could be developed in California using conventional and incrementally improved technologies”.
In 2009, the US Geological Survey released its first national geothermal resource estimate in more than 30 years with figures showing that geothermal power production could significantly add to the electric power generating capacity in the United States.
The survey found that the United States has an estimated 30,033 MW of power generation potential from conventional, undiscovered geothermal resources, and 517,800MW of power generation potential from unconventional (high temperature, low permeability) Enhanced Geothermal Systems (EGS) resources.
The Geysers in northern California has an installed capacity of 1,500 MW and is the world’s largest geothermal plant. Although now operated by Calpine Energy, Magma Power Company drilled the first commercial geothermal well in 1955 and the plant peaked at 2,000MW in 1987. Well pressure has since declined but the plant now operates at 63% capacity, much higher than the capacity factor of wind (30%) and solar (10%).
Mark Taylor, head of geothermal & CCS research, at Bloomberg New Energy Finance said: “There is natural resource decline – and plant built in the last 5 years are starting from a lower capacity factor which is not that great for companies and investors. But utilities are still in love with [geothermal] and power plants still getting good Power Purchase Agreements.”
Funding New Resources
Taylor said that of the $260 billion invested globally in clean energy last year, $2.6 billion was invested in geothermal. He said: “That may sound depressing but it’s actually pretty good. In 2010, geothermal was $3 billion flat. Those are the two highest years we’ve seen – $440 million invested in 2011, 17% of that is in the US. It means there’s going to be a lot of plants online in the next couple of years.”
BNEF forecast 800 MW in additional capacity in the US by 2020, with a further 4 GW added in the rest of the world.
There had been a flurry of later stage investment in 50 MW projects in the US such as Blue Mountain and Desert Peak 2 in Nevada, Puna in Hawaii and East Brawley in California.
In later comments, Taylor told Breaking Energy: “The more power you draw the faster resources decline. You might be sucking the well too fast. They will recharge but they need time.”
He said that utilities were still signing generous power purchase agreements around $82 to $117 per MWh over a 20 year PPA contract for non-commissioned plants that will start in 2016.
“Utilities aren’t interested so much in MW, but the MWh – how much power you can get out of it which means that you can buy more Renewable Energy Credit to fulfill your RPS goals.”
“I like to describe geothermal as nice work if you can get it. It’s ideal for utilities to meet their RPS goals because it has a high capacity factor – whereas wind only has a capacity factor of 30% and wind 10%.”
Resource decline is compensated for by constancy, and geothermal had to be at the heart of the renewables mix, said Douglas.
“A system that has a balanced mixed of geothermal, and biomass, solar thermal, PV and wind will function very differently. We need think about how to meet the needs of our electricity system to allow us to deliver reliable electricity – this is where geothermal power is our bread and butter. This is where geothermal provides us with what we need without having to go out and deliver new technology for storing or balancing or integrating.”
Photo Caption: A geothermal power plant in California.