In its recent report entitled, “Geothermal Energy: International Market Update” the Geothermal Energy Association (GEA) stated that “both the number of countries producing geothermal power and the total worldwide geothermal power capacity under development appear to be increasing significantly.” However, despite the evidence of significant growth, the report went on to say the potential of geothermal resources to provide clean energy appears to be under-realized, and an element cited as a reason for this under realization is that “new projects… have high associated costs and risk factors.”
With so much growth potential for the geothermal industry, it is no wonder that we at Concepts NREC are seeing an increase in new business projects that are designed to get more out of the turbomachinery as well as to design turbomachinery that operates in new ways. Because geothermal energy projects are so expensive, in order to secure funding, it is critical that solutions providers have development partners that can prove concept viability for technical and commercial success via early engineering and mechanical design support.
True, geothermal as a renewable energy resource does not pose a great technical hurdle. The sun doesn’t have to shine, and you don’t have to worry about seasonality or weather conditions. However, it is currently an expensive resource, because it requires drilling thousands of feet deep to tap into a hot steam or water resource. Sometimes you only hit steam; other times you hit just hot rocks. Often, minerals that interfere with heat exchangers are in the steam. While each of these scenarios has solutions, current technology makes them expensive on a per unit energy costs basis. Therefore, getting financing relies on advancing the technology to ensure an attractive proposition. The best way to accomplish this is to employ state-of-the-art engineering to get the most energy out of every well then making the most of that energy.
A specific example of how expert engineering turbomachinery design and analysis support assisted in securing technology advancement funding was announced this past summer. GeoTek Energy, LLC (GeoTek) announced that its GeoTek Gravity Head Energy System (GHES) received $450,000 for its initial design, and it will receive up to $2.4 million in additional funding for design validation and further development as part of the US Department of Energy (DOE) Geothermal Technologies Program (GTP) to advance innovative geothermal technologies.
In making the GHES funding announcement, Dave Marshall, chief financial officer of GeoTek, said, “You can’t underestimate the importance of selecting from the beginning a technical partner with such (turbomachinery engineering) experience to increase the likelihood of success.” GeoTek’s collaboration partner was Concepts NREC, which worked with GeoTek in the early stages to prove the GHES concept viability.
The original GHES includes a gravity-driven downhole pump that uses the force of gravity to eliminate traditional pumps and motors typically needed in binary geothermal energy production. The newly designed GHES downhole turbopump builds on the concept yet is a unique design, and Concepts NREC led the effort to achieve a reliable, high performance product. These improvements help GHES reduce the cost of geothermal energy by increasing output and accelerating initial electricity generation.
According to the “Annual U.S. Geothermal Power Production and Development Report,” published in April 2011 by the GEA, since 2009 approximately $262.9M and $4.6M in cash grants have been provided to utility-scale geothermal projects and geothermal heat pump projects respectively. As indicated by the report, this increased progress in the development of geothermal projects has been fueled by federal incentives and funding to help offset the risk and high capital cost of geothermal development.
Anyone following the state of the geothermal industry sees that it is growing in importance and that a significant level of funding to advance the technology comes in large part from United States Federal Government. Those companies that best demonstrate concept viability secure the funding to go full steam ahead.
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