Geothermal looks to regain traction in California

Geothermal development in California may have slowed in recent years, but its low cost and high reliability in comparison with solar and wind power should spark future growth, according to a panel of geothermal experts.

Geothermal is looking to gain its footing in the renewable energy market. Credit:iStock

Geothermal has thrived in other western U.S. states, but development has been hindered in California due to a lack of purchase power agreements, a lack of reliable transmission and a recent investment boom in solar and other renewable sources.

"California, the home of geothermal and the largest segment of the industry, seems to be right now treading water," said Karl Gawell, Executive Director of the Geothermal Energy Association (GEA).

But during a GEA hosted discussion in Sacramento last week, panelists were optimistic that geothermal could see resurgence in California once utilities and regulators understand the value and reliability of the power source.

"I don't think there is any lack of interest in seeing that happen. It's a question of finding the missing pieces to make that work," Gawell said.

One of those pieces is getting utilities and public utility commissions (PUC) to understand the value of geothermal, according to Paul Thomsen, Director of geothermal generation company Ormat Technologies. 

"The fantastic attributes of geothermal just aren't being recognized today," he said. "[Geothermal is] the absolute most cost-effective energy resource their probably is in California. We just have to get the formula right so that PUCs and utilities recognize that."

Getting the message across means getting geothermal involved in statewide energy planning processes and making the case that geothermal can be a cost-effective power source in a time when customers are as attuned as ever to their electricity rates. And in a risk-averse economy, it also involves instilling confidence in investors and financing that geothermal rates will remain economical in five to 10 years.

"It would behoove regulators in the state of California to enter into respectable contracts that investors can sign today," Thomsen said, adding that he doesn't foresee any financing problems going forward, and that people are generally very excited about geothermal development after they get past the initial investment point.

But expanding geothermal production goes beyond cementing investor and vendor confidence. Customers too must be brought on board with regard to renewable energy investment. Panelists suggested that customers are often afraid that new renewable energy will result in higher costs, and it is the energy industry's responsibility to address these concerns.

"People have to understand they are getting something for what they are paying," said J.R. Delarosa, Energy Advisor for California Governor Jerry Brown.

The Sacramento Municipal Utility District (SMUD) is one utility already working to bring customer renewable energy at affordable prices.

"I do not think the rate shock that people are so afraid of has to happen," said John DiStasio, General Manager and Chief Executive Officer of SMUD. SMUD has approached renewable energy as an integrated solution, he said, and this is also where geothermal will likely find much of its success in the state.

"If you have a portfolio of resources, you don't see a radical swing in pricing," Delarosa said.

All in all, the slow pace of geothermal growth might not make it the "flashiest" source of renewable energy, but it can't be considered dwindling, or even unpopular.

"I don't think we are forgotten," Thomsen said. "We have been the slow, steady of developer of real megawatt hours on the grid, time and time again," he said.