Study Says Geothermal Energy Most Efficient and Improving Fastest

08.12.09Bill Opalka, Editor-in-Chief, Topic Centers, Energy Central

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A new study says geothermal energy is the most efficient source among renewable energy resources and could become cheaper than fossil fuel-generated energy with a concerted government research effort.

New York University Stern School of Business Professor Melissa Schilling finds that the cost of generating electricity with geothermal or wind energy is a fraction of the cost of solar energy. The performance of both is improving much more per dollar of R&D invested in them than solar technologies, she says in the study "Technology S-curves in Renewable Energy Alternatives: Analysis and Implications for Industry and Government."

Schilling examined data on government R&D investment and technological improvement and found:

Geothermal energy is the most efficient renewable energy alternative and is improving the fastest. Wind energy is second.
Fossil fuel technologies are no longer improving (in terms of efficiency). These technologies have likely reached their performance limits, though the government still spends far more on them.
Both geothermal and wind energy technologies have been underfunded by national governments relative to funding for solar technologies, and government funding of fossil fuel technologies might be excessive given their diminishing performance.

Most of the geothermal energy used as of 2006 came from underground hot water or steam sources, with a long-term potential for geothermal energy available in the heat of hot, dry rock formations deeper within the Earth's crust.

Technology for harvesting geothermal energy is at a relatively early stage of development. According to the Geothermal Energy Association, the United States' installed capacity of geothermal energy was approximately 2,800 megawatts in 2006, which is less than 0.3 percent of total electricity capacity in the United States. Geothermal power is much more plentiful in the southwestern U.S, with approximately 6 percent of the energy produced in California from that source.

The study says geothermal's key advantages are: a large amount of potentially tappable energy exists; it is clean; and it is reasonably inexpensive. The Department of Energy's Energy Efficiency and Renewable Energy division said electricity production costs for geothermal steam plants at 4 to 6 cents per kWh in 2006, and 5 to 8 cents per kWh for binary plants. The estimates suggest geothermal energy is more expensive than fossil fuels or hydroelectric power, but less expensive than wind, solar power, or biomass. The costs of many of the major fossil fuels have been on the rise for the past decade, while the costs of generating energy from renewable sources have been in steep decline.

The study plotted the performance of a technology against the money or effort invested in it. The results show an S-shaped curve: slow initial improvement, then accelerated improvement, then diminishing improvement. These S-curves can help show the relative payoff of investment in competing technologies, as well as providing some insight into when and why some technologies overtake others in the race for dominance, according to this study. The analysis of renewable energies with an S-curve has implications for both government and industry. "Using data on government R&D investment and technological improvement (in the form of cost reductions), we show that both wind energy and geothermal energy are poised to become more economical than fossil fuels within a relatively short time frame," the study states.

The study also claims research and development for wind and geothermal technologies has been under-funded by national governments relative to funding for solar technologies. Funding of fossil fuel technologies might be excessive given their diminishing performance.

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Limitations of the S-curve approach include the difficulty of estimating average costs of energy production. And the inferences were drawn from data from only nine countries. Despite these limitations, the analysis offered these insights:

Plotting performance against investment suggests that R&D investments in fossil fuel technologies by government is probably excessive given that fossil fuel technologies do not appear to be reaping performance improvements and in fact are experiencing declining performance despite the significant investment. However, cost data indicate that fossil fuels are still, less expensive than the renewable alternatives.

The results suggest that renewable energy sources (particularly wind and geothermal) have been significantly underfunded relative to their potential payoffs. The S-curves for both wind energy and geothermal energy show major performance gains as a function of R&D investment, and both appear to be poised to become economically comparable, if not superior, to fossil fuels with modest investment. The collective government R&D investment in wind energy and geothermal energy by the nine countries considered here totaled just over $2.6 billion and $4.1 billion, respectively, over the 1974-2005 period. The U.S., Norway, Japan, and Canada still invest more government dollars yearly on R&D for fossil fuel technologies than for all of the renewable energies combined. Spain, Sweden, Switzerland, and the United Kingdom spend more R&D on renewable energies than fossil fuel technologies.

Investment in fossil fuel technologies is made by countries and companies that are likely to have considerable assets and commitments in fossil fuels; it is currently more profitable to focus on fossil fuel energy sources than renewables. Data in this study suggest that new entrants into the energy industry are likely to benefit more from investment in wind or geothermal energy than fossil fuel, biomass, or solar technologies.

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Reader's Comments

Date	Comment
James Carson 8.12.09	While wind may cost a "fraction" of solar, the value of the power generated is worth only a "fraction". Why? Wind produces the most when loads (and prices) are low, while solar produces when loads (and prices) are high. As for geothermal, two countries already get about a quarter of their power from geothermal, Iceland and New Zealand. They have special circumstances: plenty of geothermal energy to tap, and expensive alternatives. In the US, the best geothermal locations are also national parks. Yellowtone, for example. They also tend to be considerable distances from population centers, not unlike wind. Still, geothermal is a very interesting approach. I would like to see some efficiency and cost numbers for the deeper rock formations you mentioned. James Carson, RisQuant Energy
Phil Williams 8.12.09	Percentage of the country’s electricity generation from geothermal: El Salvador 22% Kenya 19% Philippines 19% Iceland 17% Costa Rica 15% Nicaragua 10% Guadeloupe 9% New Zealand 7% Indonesia 7% Mexico 3% Guatemala 3% Italy 2% USA 0.5% Japan 0.25% Country Electricity GWh per annum USA 17,916 Philippines 9,253 Mexico 6,282 Indonesia 6,085 Italy 5,340 Japan 3,467 New Zealand 2,774 Iceland 1,483 Costa Rica 1,145 Kenya 1,088 El Salvador 967 Nicaragua 271 Guatemala 212 Turkey 105 Guadeloupe 102 Country Geothermal direct use GWh per annum China 12,605 Swede 10,000 USA 8,678 Turkey 6,900 Iceland 6,806 Japan 2,862 Hungary 2,206 Italy 2,098 New Zealand 1,968 Brazil 1,840 Georgia 1,752 Russia 1,707 France 1,443 Denmark 1,222 Switzerland 1,175
Harry Valentine 8.12.09	There is certainly opporunity galore for small-site geothernal energy across the USA and Canada in regions where oil and natural gas deposits occur. There are several thousand deep test wells and dry/exhausted wells in thise regions. Ground water has seeped into these capped wells and reach temperaturesjust under the boiling point of water. There are capped wells located near lakes and streams and could generate electric power from the temperature difference between the deep well and the surface water.
James Carson 8.12.09	Phil: Orkustofnun, the Iceland energy statistics authority reports that 24.9 of capacity and 26.5 of the MWH are geothermal as of 2006. Link below. You are correct about New Zealand; I apparently recalled a goal rather than an achievement. http://www.os.is/Apps/WebObjects/Orkustofnun.woa/swdocument/20644/Energy_Statistics_2007.pdf The rest of the comparisons are interesting, but reinforce my point for the most part. All of them, except Italy, Kenya and Turkey, are on the 'ring of fire'. Even these three countries have extensive vulcanism that I presume are the primary energy. Further, I do not agree that comparing developing countries to the US is particularly illuminating. Harry: I agree that those opportunities are interesting, but to reiterate, I want to see some cost and production numbers. James Carson, RisQuant Energy
Roger Arnold 8.16.09	It would be interesting to see what specific types of R&D the authors of the study are suggesting that the government should be funding. For geothermal energy to have any impact on electrical power generation in this country, they pretty much have to be talking about heat mining of hot dry rocks. Other forms are very location-specific, and the best of those resources are already tapped. But AFAIK, the technology involved in heat mining of hot dry rocks is nothing more than hydrofracturing. Same as now being used for natural gas from tight sand and shale gas formations. The only difference is that you have to drill two wells instead of one -- one for cold water injection and one for hot water extraction. And the fracture zones from the two wells must intersect. But that's no different than the situation for in-situ leaching for uranium mining. I suppose there's room for improvement in equipment for power generation from low-temperature heat sources. But unless there's some fundamentally new technology there to be explored, that doesn't seem like the kind of thing the government has any business getting involved in. The study sounds to me like somebody's bid for a handout. I think the main thing holding back geothermal power from hot dry rocks at this point is not technical but legal. Specifically, liability for triggering earthquakes.
Len Gould 8.17.09	"the cost of generating electricity with geothermal or wind energy is a fraction of the cost of solar energy." -- I'd really like to see the basis of that study's so-called conclusion. Solar thermal is now approximately double in kwhr cost to wind BUT has FAR better potential to improve that situation. Sargent & Lundy's engineering concludes that with a volume installation achieving only 2.8 GW and some minor technical improvements/advances, solar thermal could generate on-peak power for $0.062 / kwh, almost all during peak periods. Invest in some insulated boxes of gravel for thermal storage and it can be made 83% reliable baseload. I don't care what some professor from the east coat thinks, wind in never likely to reach either of those targets. She should probably learn to distinguish solar PV from solar thermal.
Douglas Trerice 8.18.09	One cannot compare fossil fuel R&D with renewable R&D. Fossil fuel R&D is directed to controlling emissions not efficiency or reliability. Renewable RD is driven by cost and efficiency improvement technical concerns. In another words the research goals are not the same, therefor any comparison is apples and oranges.
Don Hirschberg 8.18.09	Is geothermal energy renewable? I suppose at some great depth it is “fossil heat.” How much heat is currently being produced by radioactivity, or are we faced with geothermal depletion? Have any old installations noticed a diminution of performance? With a large number of geothermal plants in many locations and geology - and most likely using a variety of designs, I wonder what question(s) big research is supposed to answer?
Douglas Trerice 8.18.09	I guess geothermal is not renewable as it is driven by the heat from the earth's magma and that will not be replenished by the sun. But, the sun's radiation limits the cooling rate for the magma. Don, you might want to check the success with the Geysers in northern CA. They have been tapped since, I believe the 1930's. However they are the easy kind of geothermal because the are geysers and the hot brine was already comming to the surface. They have bumped up the output by pumping treated sewerage waste water into the hot zone. The R&D investment is directed toward finding and quantiifying likely geothermal zones and how to drill and develop the zones. Wells have to be drilled to calibrating surface measurement models - an expensive proposition!
Don Hirschberg 8.18.09	"The earth’s heat content is [[1 E31 J \|1031 Joules]][1]. This heat naturally flows to the surface by conduction at a rate of 44.2 TW,[18] AND IS REPLENISHED BY RADIOACTIVE DECAY at a rate of 30 TW.[19] This is more than double humanity’s current energy consumption from primary sources," Wikipedia, (My emphasis) I am a bit skeptical that 3 significant figures are justified (i.e. 44.2). How very curious that the estimated replenishment rate is so similar.
David McGee 8.19.09	RE: is geothermal "renewable"? Don H answered that question as best it can be. It is irrelevant because the heat is being lost anyway, might as well use it on the way out. It could accelerate the earth's cooling rate somewhat, but then that would help global warming. DOE has pushed Louisiana to do some of the deep geothermal for years. We just need to drill some deep wells (12,000 ft) and then go horizontal for a ways--far enough to heat the volume of water that would be flowing to the desired temperature. Most people don't understand that wells have to be plugged (concrete) within one year of production ceasing. Wells that flow for years generally plug naturally from dissolved minerals (some witin a few years). We don't have any abandoned wells to use, readily. Horizontal wells with fracturing cost about $8 million each and it would take significant numbers to produce a 1000MWs. No one knows just how long the fracturing will last. From the Barnet Shale experience it seems it can last many years. If some one has the money, the drilling rigs are available right now. With some luck, geothermal might be cheap after everything is paid back, then again, the wells may plug or the fracturing may close up in a couple of years... Do you feel lucky?
Don Hirschberg 8.20.09	Whenever I encounter numbers far beyond what we humans normally experience I like to count the orders of magnitude. As for astronomers, one significant figure confirmations might well be appropriate. Few will be interested but: I had run across a figure of 0.1 watt per square meter for this planet’s heat loss being associated with “more than twice” the energy we use. Well, this ancient slide rule Ch.E. doesn’t think in watts/M^2 so I converted it to BTU per square foot per hour, namely 0.032, immediately recognized as an exceedingly low rate. Taking the radius of the earth as 4000 miles and current anthropogenic energy as 500 x 10^15 BTU’s I find heat loss to be about 3 times our energy usage, ergo I can accept the “more than twice “ statement on Wikipedia.
Roger Arnold 8.20.09	Is geothermal energy renewable? It depends on the rate at which heat is withdrawn. One has to distinguish two very different types of geothermal power generation. One is the type found at the Geysers: magma intrusion close to the surface, consequent high thermal gradient and heat flow, temperatures high enough for steam generation in porous rock at shallow depths. That form is easiest to tap with highest return on investment, but limited to areas where the right conditions are found. It's usually sustainable, but may require water injection if natural inflow can't replace the hot water and steam taken for power generation. The other type doesn't rely on a near-surface magma intrusion. Go deep enough, and hot rock can be found anywhere. But it will be at depths where the geostatic pressure is too high above hydrostatic pressure for water to reach naturally. It will be "hot, dry rock". The technology for tapping hot dry rocks is very similar to that used for in-situ leaching for extraction of soluble minerals, or for some types of enhanced oil recovery. One or more injection wells, one or more extaction wells, linked by a network of fractures created by hydrofracturing and sand propping. The heat flow rates into hot dry rocks are so low that steady-state extraction would be totally uneconomic. It's properly termed "heat mining". When enough heat has been taken from one set of wells that production falls off -- as it always will -- then it's time to drill and fracture some more rock somewhere else. But the practice is "sustainable" in the sense that the thermal resource is so vast that it could be "mined" at terawatt levels for thousands of years. You just need to be prepared for a LOT of drilling, a LOT of hydrofracturing, and the ocassional earthquake that the hydrofracturing has a tendency to induce. I'm not a fan of this approach (in case you couldn't tell :-)
Don Hirschberg 8.20.09	When Douglas wrote, “I guess geothermal is not renewable as it is driven by the heat from the earth's magma and that will not be replenished by the sun” he hit on the essence. Whether we tap the geothermal energy dating from the earliest days of the earth or from that of radioactive decay over billions of years it is all from a one-shot deal, big as that deal is in human terms. I suggest we only call renewable that energy we got from the sun today, or in recent years (I’m thinking of sun energy temporarily stored in the water above dams and trees, etc.) Here we are, a mere pea orbiting a sun so distant that it subtends about a half degree, thereby sending nearly all of its energy (99.9%?) off into space.
James Carson 8.21.09	Roger: The idea of inducing an earthquake in a geologically active zone does give one pause.
Don Hirschberg 8.22.09	In my 8/20/09 comment I wrote (the sun) sent nearly all its energy off into space. That's OK, but I entered a bonehead percentage. The percentage should be nines clear across the page, i.e. 99.9 with many more nines. My calculator can't distinguish it from 100%. As I said "nearly all."