Can't quit "dirty power" cold turkey

In response to an over-enthusiastic Earth Day petition, the always-thoughtful Geoff Styles thinks through the following:

What would it mean if every power plant burning coal, oil or natural gas shut down today and remained idle? The short answer is chaos and social collapse, but let's take a quick look at why.

Here are a few of his facts for the numerically inclined:

As it turns out, all renewable sources plus nuclear generated a bit over 1.2 trillion kilowatt-hours (kWh) last year... Unfortunately, it's also less power than the US has generated in any year since 1966.

If we adjust for energy:GDP, then 1979, with its net generation of 2.25 trillion kWh, looks like a more appropriate basis of comparison to the economic work that our current zero-emission power output could do. The problem is that the US population has grown by 84 million people since then, and our economy, expressed in constant dollars, is more than twice as big as in '79--even after last year's contraction.

The wind, solar and geothermal power sources we've focused intensely on expanding accounted for just 2% of the electricity we used last year. Double them, and then double them again (10 years?) and that's still only 8%, compared to the 69% we got from fossil-based generation last year.

The argument almost makes itself, but he makes it well. And rightly doesn't even bother with the triviality of a similar argument for fossil transportation fuels.

Geothermal (or at least public handouts) attract big players

I haven't been too optimistic on geothermal power on this blog (here, here, here), but here at least is some marginally good news from the U.S. government's recent round of grants.

... what really caught our eye was how many big companies were looking for ways to participate. Oilfield service giants Baker Hughes and Schlumberger were given about $5 million each to develop drill bits, motors and other tools that can churn through rock at 300 degrees Celsius.

General Electric was awarded four grants for a combined $10.9 million to design various tools, fluids and pump parts to be used in different stages of turning hot water into electricity. Honeywell and Johnson Controls also got checks from Washington D.C.

I tend to believe that these types of large corporations are pretty hard-headed about how they spend money, making this a good sign. The realist in me points out that these are tiny amounts of money - easily small enough to be justified on PR grounds alone - and keep in mind these are grants, so no financial obligation (although there may be some associated R&D investment spend comitments)... so not worth reading too much into.

More geothermal problems

September hasn't been kind to geothermal power - first the AltaRock shutdown, then this:

Government officials here are reviewing the safety of a geothermal energy project that scientists say set off an earthquake in mid-August, shaking buildings and frightening many residents of [Landau, Germany].

Like other earthquakes that have been attributed to geothermal plants, the Landau temblor was sudden and brief and was accompanied by a sound that in some cases has been likened to a sonic boom. There were no injuries and there was no known structural damage to buildings in the city. But the 2.7 magnitude quake has stoked fears and set off debate in the state Parliament, which subsidized the construction of the plant, about the method’s safety.

At this rate, reputational obstacles may soon surmount (considerable!) practical ones:

But some experts in the field say they worry that projects like the one in Germany, if the managers deny responsibility for inducing earthquakes or play down the effects on people’s lives, could damage the reputation of geothermal energy, even in highly environmentally conscious areas of the world like California or Western Europe.

And these assets aren't even running yet; once they are the economics are pretty good, but the risk-return ratio is not very attractive for anyone considering a project from scratch.

Geothermal runs into trouble

From the NYTimes:

A $17 million energy project in California that was supposed to demonstrate the feasibility of extracting vast amounts of heat from the earth’s bedrock has been suspended indefinitely after the drilling essentially snagged on surface rock formations.

The project, run by AltaRock Energy, represents the Obama administration’s first major test of geothermal energy as a significant alternative to fossil fuels. But since drilling began in June, the project has encountered earthquake fears and scheduling delays.

Last month, federal scientists said that the company had fallen far behind schedule because a huge rig hired to drill down about 12,000 feet, or more than two miles, on federal land had not been able to pierce surface formations called caprock.

Geothermal looks great on paper, but this episode highlights just one of the hurdles between the idea and clean, constant baseload powered by the earth's core. Keep in mind that they don't even know until the hole is drilled whether it will be hot enough to generate power. As my colleague said, the combination of oil E&P risks with power generation returns means pretty unattractive economics.

Geothermal: Nice power, if you can get it

Via Green Sheet, Greentech Media puts a pretty positive spin on geothermal energy, based on a recent NYU report on "Technology S-curves in renewable energy alternatives":

An NYU Stern study says geothermal energy is the cheapest renewable energy out there, and could compete with coal with about $3.3 billion in government research funding.

This echoes the general sentiment of an earlier MIT report on geothermal, which concluded in particular that enhanced geothermal system (EGS) technology could be developed to tap deeper heat sources in an economically viable and environmentally non-damaging way.

According to a colleague of mine who has some experience in the sector, geothermal assets are great once they're built - clean, cheap, and constant baseload power - but there are a number of drawbacks as well. First, known geothermal resources are quite small, and even with EGS they are unlikely to satisfy more than a small slice of U.S. power demand. Second, these resources don't coincide with population centers and thus have the same transmission issues that plague the wind industry. Finally, geothermal exploration has a risk profile similar to upstream oil (you can get "cool holes" instead of "dry holes"), and combining that with power market type returns doesn't make for a very attractive private investment.

Perhaps government investment can bring the technology along to the point where private sector can run with it, but this quote is telling:

Geothermal energy hasn't gotten a lot of attention from venture capital investors to date, given that it's seen as a limited market with very high entry costs. And geothermal companies have long complained that they don't get the government support they deserve.

Any time VC investors and companies complain they "don't get the government support they deserve," the standalone economics of the business can't be that good.