We Don’t Need a Geothermal Portfolio Standard

Michael Giberson

The new Jan./Feb. 2011 issue of the Electricity Journal is now available, and it contains the usual range of interesting things to consider.

Take, for instance, the article “Redefining Renewable Portfolio Standards: The Value of Installed Renewable Capacity.” The article observes, reasonably so, that some sources of renewable power can dependably generate power around the clock, while others are somewhat less dependable. And we can all agree that dependable power is somewhat more useful that less dependable power, other things being equal. But soon enough we depart this firm foundation and begin speculation on how we can rig power markets and renewable power policies to increase the role played by geothermal energy.

To which the appropriate response is: “Say what?”

It is as if the article does not realize that their are broader environmental goals at issue in renewable power policy. In fact, the only mention of the word “environment” in the article is in reference to “creat[ing] a suitable investment environment for developers” (p. 15; the article does mention greenhouse gases two times on p. 17).

By the end of the article the author is asserting that “States with geothermal resources should tailor their renewable portfolio targets to encourage geothermal development to the extent possible.” I guess I missed the benefit-cost analysis earlier in the paper, but when did anyone besides the geothermal power industry conclude it was in the public interest to encourage geothermal development “to the extent possible”? Actually, the author is a bit more generous, allowing that his ideas would equally apply to other dependable renewable resources like biomass and landfill gas.

We’d be better off if our environmental policy was more focused on solving environmental problems and less focused on boosting one segment of the power industry at the expense of other segments of the industry (and, ultimately, power consumers).



5 thoughts on “We Don’t Need a Geothermal Portfolio Standard

  1. There is no goal; there is no plan. There are what might be compared to children’s Christmas lists or letters to Santa Claus. Each child’s list is different, focused solely on his/her specific desires.

    “You’ve got to be careful, if you don’t know where you’re going, because you might end up someplace else.”, Yogi Berra

  2. You obviously have no real knowledge or expertise in the field of renewable energy, nor do you understand the distinction between baseload and peak power demands. Soon you will start seeing 100 MW , very fast statup gas turbines being needed in Texas to address the growing dependence on intermittent wind power. Geothermal power is distinguished as the only base load renewable power source. It is also highly economical. There are many pure play geothermal companies that actually make money. Show me a pure play renewable company outside of geothermal that actually makes money and pays its shareholders a dividend? Do you believe any of the solar PV companies would be in business without ($5,000 / kW !!!) gov’t subsidies? Next time do your homework before you spout off.

  3. Jack, I agree that geothermal generation can provide baseload renewable power. Do you think I claimed otherwise? (I don’t think it is the only baseload renewable; hydropower can provide baseload renewable power, too.)

    I also agree that solar PV companies are highly reliant on supportive government policies (outside of some relatively small off-grid market niches).

    My only point above is that a Geothermal carve-out, or baseload carve-out, or other further complexity in Renewable Portfolio Standards will not tend to produce cost-effective environmental benefits for power consumers/taxpayers/citizens. This is the wrong policy direction to go.

    The reliability of geothermal, especially in comparison to many other renewable technologies, is commercially valuable. Ordinary commercial contracts and dealmaking processes should be sufficient to allow geothermal power companies to monetize most of that commercial value, at least so long as they are not locked into dealing with a monopoly utility (and since the passage of PURPA and subsequent market developments, that should not be a problem for most generators). We don’t need public policies to tell us that it is more valuable and how much more to pay for it.

  4. I disagree Michael, unless it is also your prosition that the other incentives for wind, solar PV, etc are also misguided and should be retracted. If you look at what the gov’t is effectively paying, from an incentive perspective, on a $/kW installed basis, for different forms of renewable energy, they are paying far, far more for wind and solar PV than geothermal. Yet geothermal has far less environmental consequences than wind, and is aesthetically less environmentally intrusive than solar PV. Another way to look at this is on a power density basis i.e. MW / sq ft of real estate. Solar PV is off the charts here, and wind not too far behind…the power density of geothermal is enormous in comparison (very small environmental footprint for large amounts of power). Shouldn’t environmental impact consider how much of nature is being (forever) altered / impaired to produce each MW of renewable power? Now throw into this mix the fact that solar PV and wind are intermittent power sources that do nothing to reduce baseload power generation demands being met almost entirely by fossil fuels. The only other viable baseload renewable power source is hydro power, but I think you’d agree with me that geothermal has less adverse environmental impact than hydro. The only downside to geothermal is that the resources are much more limited than wind, solar and hydro, of course, and so the ultimate potential is less. Bottom line: Incentives should be based on the attractiveness / utility / environmental benefit of the renewable power source, not the weight of the sectors lobbyists in Washington. So, I believe that a geothermal carve out would in fact produce much more cost effective environmental benefits for power consumers / taxpayers / citizens. Funding for this carve out should come from reducing the existing incentives for other renewable segments with less cost effective environmental benefits. I could support your position, but only if alongside it you were also saying that other existing renewable incentives should be done away with, to let the market forces dictate forward progress instead of public policies. Lastly, I believe, at the end of the day, that we will see a very significant resurgence in nuclear power. France has been heavily reliant on nuclear power for more than a decade, with no significant safety incidents, and as such enjoys relatively cheap, emission free electric power. It is my belief that the future will relegate existing renewable technologies to relatively small niche roles, and nuclear power will become the mainstay. This won’t happen until the US feels much more economic pain from power / energy costs, but that day is forthcoming.

  5. Actually Jack, I’m pretty willing to say that other existing renewable incentives should be done away with. Generally, I support government-funding of research into all sorts of energy technology, because adding to technical knowledge contributes to the public good. In addition, I’d go for some *very limited* support for development and operation of new energy technology, since some things you learn only by doing. (But data for projects supported in this way should be made widely available for research purposes, because the intent of the support is to promote learning. Most commercial enterprises supported by renewable power subsidies treat their operations as private commercial matters not available for public review and scrutiny.)

    Tackling other kinds of environmental goals, like reducing air emissions, etc., should be done in other ways – not by subsidizing certain favored industry segments at the expense of others. One reason not to like RPS policies is that the subsidy goes to qualifying facilities without respect to the net environmental benefit created (if any!). (I think this is your point with respect to the advantages that geothermal has over other renewables: different environmental qualities, yet same subsidy.) RPS just tends to be inefficient policy.

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