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Geothermal energy getting a second look
Clean, reliable, plentiful, it attracts investment, mainly in Western states
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Published: November 7, 2008
RENO, Nev.
Not far from the blinking casinos of this gambler's paradise lies what could be called the Biggest Little Power Plant in the World.
Tucked into a few dusty acres near a shopping mall, it uses steam heat from deep within the Earth's crust to generate electricity. Known as geothermal, the energy is clean, reliable and so abundant that this plant produces more than enough electricity to power every home in Reno, population 221,000.
"There's no smoke. Very little noise," said Paul Thomsen, the director of policy and business management for Ormat Technologies Inc., which owns the operation. "People don't even know it's here."
Geothermal energy may be the most prolific renewable fuel source that most people have never heard of. Although the supply is virtually limitless, the big initial costs required to extract it have long rendered geothermal a novelty. But that is changing fast as this old-line industry buzzes with activity after years of stagnation.
Billionaire Warren E. Buffett has spent big. Google Inc. is bankrolling advanced research. Entrepreneurs are paying record prices for drilling leases in such places as Nevada, where they are prospecting for heat instead of metals.
"This is the new gold rush," said Mark Taylor, a geothermal analyst with New Energy Finance, a consulting company in Washington. He says that high fossil-fuel prices and worries about warming have revived the U.S. industry, along with federal tax credits and state laws mandating the wider use of renewable energy.
Worldwide, investment in geothermal was about $3 billion last year, Taylor said. Although that is a blip compared with the estimated $116 billion funneled into wind and solar, it is still a 183 percent increase over 2006.
Much of that new investment is in the United States, the world's leader in the field. More than 80 percent of the country's 3,000 geothermal megawatts are in California. The Geysers, a network of 22 geothermal plants north of San Francisco in the Mayacamas Mountains, is the largest geothermal complex on the planet. Calpine Corp. owns the largest part of it.
The area around the Salton Sea in California's Imperial County is another hot spot. CalEnergy Generation, a subsidiary of Buffett's Mid-American Energy Holdings, owns and operates 10 plants there and plans three more in the next few years.
Nevada, the nation's No. 2 geothermal producer, has 45 new projects under way, said Lisa Shevenell, the director of the Great Basin Center for Geothermal Energy at the University of Nevada in Reno.
"I've been at this 25 years, and I've never seen anything like it," said Shevenell, a research hydrologist. "Money is falling out of the sky."
Geothermal has been used since the 1820s and can produce a kilowatt-hour for between 4 and 7 cents.
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