by James H. Caldwell and Dr. Liz Anthony, March 2016 (Center for Energy Efficiency and Renewable Technologies)
The purpose of this study is to quantify the value of additional geothermal energy in helping California comply with recently enacted legislation establishing a 50% Renewable Portfolio Standard (RPS) by the year 2030 and achieving the long term goal of reducing carbon emissions by 80% below 1990 levels by 2050. The study finds that development of an additional 1,250 megawatts (MW) of geothermal resources at the Salton Sea is cost effective as part of a diverse renewable portfolio.
This study is the first to quantify the economic value that adding additional geothermal resources can provide to California’s electric system. It compares a base portfolio that represents how California might achieve its 2030 targets under a continuation of current policies with a geothermal portfolio that replaces 3,800 MW of solar generation with 1,250 MW of new geothermal generation from the Salton Sea. It finds that incorporating the additional geothermal generation reduces CO2 emissions compared to the base case and saves the electricity system up to $75 in operational costs for every MWH of added geothermal generation. The potential savings could be as much as 2% of total system costs by 2030.
Although this dollar figure is specific to a future system operated much like today, the general conclusion that new geothermal is cost effective is robust across a range of scenarios that contemplate other innovative solutions for dealing with high penetrations of variable renewable energy resources in a carbon constrained world.
California will need a diverse portfolio of renewable resources and system flexibilities to meet the state’s renewable energy and greenhouse gas goals. This study indicates that adding new geothermal resources would be a cost effective step and one of the lowest-hanging fruit available to California as it journeys down the pathway to a low carbon future.
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