August 2010
Hot Spots for Geothermal Energy
by Gail Rubin
New Mexico is rich in geothermal resources, and many of the hottest hot spots for energy generation are in rural electric cooperative territories. From the Jemez Mountains to the Animas Valley, geothermal electricity production is starting to move from potential to reality.
Volcanic history in New Mexico is relatively young, geologically speaking, and the hot springs throughout the state are one indicator of the heat energy in the earth that comes close to the surface here. Geothermal energy can generate steam to power an electric power plant turbine with little or no greenhouse gas emissions.
Geothermal energy provides one of the cleanest and most dependable sources of renewable electricity. Wind and solar are intermittent, but the Earth’s energy is constant.
A map of New Mexico geothermal resources prepared for the U.S. Department of Energy by the Idaho National Engineering and Environmental Laboratories shows the western half of the state has significant geothermal resources. Much of that territory is on land controlled by the Bureau of Land Management, U.S. Forest Service, the State of New Mexico, and Native American tribes.
“Here in New Mexico, we’re dominated through the middle of the state with a feature called the Rio Grande Rift, which means the continent is pulling apart, the mantle is upwelling, and you get higher incidences of volcanism out of these rift places,” explains New Mexico geothermal expert Jim Witcher.
Associated with these rifts are relatively shallow hot spots. Hot spots that also have water are called hydrothermal reservoirs. They can be used to produce power with relatively little engineering effort. According to Witcher, New Mexico has a near-term potential to generate 80 megawatts from this type of reservoir. Eventually, this resource could produce up to 350 megawatts.
Another type of geothermal reservoir consisting of hot dry rock has the potential for generating thousands of times the amount of energy compared to hydrothermal reservoirs. However, water must be supplied to the hot rock, and the technology to do so, called enhanced geothermal systems, is much more complex, with only limited worldwide demonstrations now working at a commercial scale.
According to Witcher, “Geothermal resource potential exists in all areas of New Mexico for base load power using new technologies such as enhanced or engineered geothermal reservoir technology.”
The Lightning Dock Project
This summer in the boot heel section of the state, Raser Technologies started drilling at its Lightning Dock project to access water that’s over 300 degrees Fahrenheit. A rancher drilling for water in the late 1940s first discovered hot water in the Animas Valley. The first commercial attempt to find hotter water from deep drilling occurred in the 1980s, but the resource was considered too cool to generate electricity. Now, with better technology developed over the past 30 years, the company re-entered this productive well that extends 7,000 feet below the ground surface.
“With the evolution of technology, temperatures of 300 degrees plus are now more than suitable for commercial generation of electricity using binary technology,” says Mike Hayter, director of Business and Project Development for Raser Technologies. “Along with temperature, you have to consider the function of depth and cost, in terms of whether it’s feasible. It’s technically feasible to generate electricity with water as low as 200 degrees, but financially it becomes difficult as the temperature decreases.”
There are three primary technologies for generating electricity from geothermal heat: dry steam, flash steam and binary.
“If you have enough temperature and flow, if you don’t have to pump from a depth that is too great—if all those things come together, then you have a wonderful opportunity to build a binary technology commercial generation plant. That’s what we’re doing at Lightning Dock,” says Hayter.
Raser Technologies is working with Columbus Electric Cooperative headquartered in Deming, to interconnect with the co-op’s lines to feed in the electricity the new plant produces, which will be sold to the Salt River project in Phoenix. The company expects to be generating power by the end of 2011.
“We’re very excited about the tremendous support from the local community, private citizens, businesses, and the co-op,” says Hayter. “Much of the industry is watching this because we are the first commercial geothermal power plant development project to actually go from start to finish. We’ve blazed the trail with the state, county, and the BLM on geothermal regulatory processes, and that is going to help any future projects developed in New Mexico.”
Michael Fletcher, general manager at Columbus Electric Cooperative, says, “We really welcome and encourage economic development in our service area, especially alternative energy, and are happy about the jobs it’s creating in the area. We’re 100 percent behind the Lightning Dock Project.”
Geothermal Exploration
Further north, the Pueblo of Jemez received a $5 million grant from the U.S. Department of Energy through the American Recovery and Reinvestment Act to locate and drill two exploratory wells to tap into local geothermal resources. The pueblo will work with Los Alamos National Laboratory scientists to do computer modeling of information collected through seismic surveys of rock densities and a high-tech magnetotelluric survey of magnetic fields. The end result will be a 3-D image, sort of a geologic magnetic resonance imaging that pinpoints the underground geothermal resources.
The study will detail the full extent of the resource—how hot the water is, its chemical constituency, the pressure it’s under, how much is available—and where they can best locate wells for power generation. This process will conclude February 2012.
Greg Kaufman, the interim director of the Department of Resource Protection at the Pueblo of Jemez, says at that point, the pueblo will decide how to use the available geothermal resources. The pueblo is in negotiations with Jemez Mountains Electric Cooperative regarding a solar photovoltaic commercial-scale project.
“We’re trying to make renewable energy a central theme for economic development, and all those projects fit well with the culture and traditions practiced here. And most of these projects have jobs associated with them,” says Kaufman. “This is an example of the stimulus package at work. It’s helping local people here and could result in something significant for the Pueblo of Jemez and the state.”
Renewable Energy Carrots and Sticks
While most folks wouldn’t build a power plant in their back yard, federal tax credits provide incentives for the production of electricity from geothermal energy. There’s a production tax credit of 2.2 cents per kilowatt-hour, available for facilities placed in service before December 31, 2013. It’s paid for energy produced up to 10 years after the facility is placed in service. Additionally, business taxpayers can claim a 10 percent tax credit, without limitation, on qualified equipment purchased and installed for geothermal electricity generation.
Also, Congress has allocated up to $2.8 billion in Clean Renewable Energy Bonds (CREBs) to finance facilities that generate electricity from renewable resources. These bonds are reserved for electric cooperatives, public power providers, and state, local and tribal governments. The advantage of these bonds is that the federal government pays all interest costs.
A state law passed in 2007, SB418: Enhancing the Renewable Portfolio Standard, requires New Mexico’s rural electric cooperatives to obtain 5 percent of their electricity from renewable sources by 2015, and increase to 10 percent by 2020. Renewable energy includes wind, solar, biomass, and geothermal.
Part of the bill is designed to help co-ops acquire renewable energy by establishing funding sources for developing or purchasing renewable energy resources with a Renewable Energy and Conservation fee. Co-ops may elect to collect from customers up to a 1 percent renewable energy fee, which is matched at 50 percent by the state. The bill also established a program for retail customers to voluntarily purchase more renewable energy than the co-op is required to provide under the Renewable Portfolio Standard.
Geothermal Resource Actions
While geothermal resources such as hot springs in New Mexico have been used by humans for thousands of years, we are just beginning to accurately assess the scope and character of the energy that can be tapped below the earth’s surface.
Directed by Governor Richardson’s first Executive Order in 2010, the New Mexico Energy, Minerals and Natural Resources Department initiated the “Geothermal Database Working Group.” This consortium of technical experts is tasked with developing a geothermal resource assessment database and compiling technical and policy recommendations to promote geothermal development in New Mexico.
Similar assessment databases were compiled for wind and solar resources in recent years. As with the wind and solar, the geothermal database will go a long way in fostering more geothermal electricity production in the state by providing companies with accurate information on which to base economic evaluation of proposed power plants.
The working group includes experts from the New Mexico Bureau of Geology and Mineral Resources, New Mexico Tech, Los Alamos and Sandia National Laboratories, the New Mexico Office of the State Engineer, and other state agencies. In support of these efforts, the Energy, Minerals and Natural Resources Department allocated American Recovery and Reinvestment Act funding through the State Energy Program to fund a renewable energy project at New Mexico Tech for graduate students to collect and analyze information for the database.
Two symposiums on geothermal energy will be held in August and September. The one scheduled for September will focus on geothermal energy production potential in the state, and the other in August is about oil and gas/geothermal co-production.
Details about these meetings, or general geothermal information, are available from Steve Lucero with the Energy Conservation and Management Division at 505-476-3324.
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