Geothermal energy is viable and reliable right now, and the promise of the industry is unparalleled given the positive characteristics of the resource.
The Cleanest and Greenest Energy Source - Geothermal
| Geothermal energy is viable and reliable right now, and the promise of the industry is unparalleled given the positive characteristics of the resource. |
| The Cleanest and Greenest Energy Source – Geothermal |
It is somewhat ironic that the least expensive, cleanest and most reliable power source available springs from the very earth we inhabit. Ask the average person on the street about geothermal as an energy source though, and you’ll most likely get a blank stare. Or perhaps they know someone heating and cooling their house with a heat exchange unit. While this form of geothermal energy plays an important role, large scale electricity production is happening and the industry is growing. The relatively low profile of geothermal energy is bound to change in the coming years as the incredible potential of energy generation from the heat stored in the earth becomes more and more mainstream – as it should. Geothermal energy is viable and reliable right now, and the promise of the industry is unparalleled given the positive characteristics of the resource. The difficulty of course is that unlike many conventional and other alternative energy sources, harnessing the heat of the earth to create power is a lesson in patience, perseverance and fortitude, not to mention a willingness to take risks and be rewarded only years down the road. No doubt these are some of the reasons there are only seven ‘pure’ geothermal companies exploring and producing power from the earth. There is no question though, that the field will get more crowded as the value and benefits of geothermal energy becoming more commonplace. The process itself is relatively simple. Once a suitable hot water source is located through exploratory test well drilling (in itself, time consuming and expensive) a power plant is constructed with a production well drawing the heat of the earth (in steam or liquid form depending on the temperature of the source) up and either directly powering turbines or flashing the steam to do the same. This produces electricity (sent through existing grids) and the liquid is then returned to the earth through another well to preserve and maintain the reservoir. While the above is a very simplified description of how energy from geothermal resources is produced, there a number of benefits that are undeniable. First it is clean. Second it boasts the best base load percentages (available power 95% or more of the time) Third, the footprint of a power plant is minimal. Fourth, the resource is long lasting; indeed the original geothermal-based power plant continues to produce electricity 104 years later! As noted, geothermal power produces energy with little or no emissions and it is clean and renewable. It is also a proven technology, with low operating costs; no fuel requirements once the plant is built insulate producers from commodity shocks. Geothermal is a base load power generating electricity continually, which contrasts with other alternative energy sources like wind or solar power, efficient only when the wind blows or the sun shines. For these and a host of other reasons like beneficial tax legislation and government incentives increasing alternative energy targets, Vancouver-based resource company Nevada Geothermal Power Inc. (NGP) (TSX.V-NGP, OTCBB: NGLPF) is one of the pure players, and is poised to become a leader in power generation over the next few years. For the last 10 years, Nevada Geothermal Power has developed its three properties in northern Nevada and one in southern Oregon, actively exploring and confirming the resources for several power plant projects and is nearing power generation at their keystone project Blue Mountain. The Blue Mountain geothermal field has advantages over many other geothermal projects underway as the resource is close to the surface (shallow) with easy road access and is situated within 20 miles/32 km of the electrical transmission grid. The Blue Mountain geothermal site now has a power purchase agreement for up to 35 megawatts of geothermal power with the Nevada Power Company, expected to come on line at the end of 2009. NGP announced on November 21, 2007 that it has executed a Large Generator Interconnection Agreement with the Sierra Pacific Power Company. The LGIA covers up to 75 megawatts of new electric generation in two phases from the Blue Mountain geothermal resource. Financially, the company has recognized the need for deep pockets for the initial phases of exploration and confirmation and solid financial footing throughout. Its Blue Mountain geothermal project is financed right through to the revenue phase and the company has a commitment for the initial phases of the Blue Mountain development of $140 million at present. Plant construction is anticipated to begin shortly and the company motto – Turn on the Power! – should be realized early in 2010, with more projects following suit. As President and CEO Brian Fairbank explains, the company is coming into prominence based on its properties and the foundation - professional expertise and solid finances - it has established. “Within five years we expect to have 50 megawatts online at Blue Mountain, enough electricity for 40,000 homes and the possibility of up to 100 megawatts total at this one site. Our other projects and potential acquisitions should have the company demonstrating the probability of another 50 – 100 megawatts beyond 2012.” Others concur. In a review of the Blue Mountain project, world-renowned geothermal consulting group Geothermex, Inc. noted: "Given the attractive temperature level for the drilling depth, the existence of an extensive geothermal anomaly, and the relatively flat and accessible terrain of the project site, the Blue Mountain project is as attractive as any being explored or developed in Nevada today." The State of Nevada currently is generating over 300 megawatts of geothermal power and has another 120 megawatts coming online in 2010. Even this will not be enough to meet the Renewable Energy Portfolio Standards (RPS) of 20 percent by 2015 without increased production; currently the state is at 8 percent. While a leader in the geothermal energy production field, the states potential power generation capacity – 2500 to 3700 megawatts - means current production is just the beginning. These are heady times for the industry and NGP in particular, and investors are starting to recognize the vast potential. Analysts suggest geothermal energy firms will explode in value once they start signing contracts and selling power, particularly given the fragility of the traditional resource market and the current economic uncertainty. A report in the June 18, 2007 Globe Investor by Jacob & Company analyst John McIlveen reflected the reality and the potential of geothermal energy when it said in part: It’s almost like real estate investing. You’re not looking for a flip tomorrow. This is a two-to four-year hold…”[The shares] will go sideways for a year, until something happens, then all of a sudden a whole year’s worth of appreciation will get into the stock in a couple of weeks.” That ‘something’ is about to happen with Nevada Geothermal Power and the company management team is buoyant and confident. They recognize that all their years of hard work are going to pay off as they establish their company at the forefront of an industry now starting to assert itself as a resource whose time has undoubtedly come. Contact Info: Nevada Geothermal Power Inc.: |
The content & opinions in this article are the author’s and do not necessarily represent the views of AltEnergyMag
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