As executives work to improve the perception of geothermal in the energy industry, service providers are finding ways to decrease the up front cost of developing the resource.
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| NV Energy’s Jack McGinley at the GRC Annual Meeting |
NV Energy’s Jack McGinley recently put the U.S. geothermal industry’s current challenge in succinct terms: Geothermal is not competing with solar PV on cost, and when it comes to utility power procurements, “low cost wins.”
McGinley is executive of regulatory and legislative strategy at NV Energy. Speaking at the Geothermal Resources Council 39th Annual Meeting in Reno, Nev., in September, McGinley explained that in the request for proposal (RFP) process for utilities, low cost, while not the only driver, is the primary driver.
“When you’re signing contracts at 3.8 cents and 4 cents a kilowatt-hour, it’s tough to beat that,” he said.
NV Energy’s most recent RFP went entirely to solar. Utility-scale solar project owners are regularly securing power purchase agreements at 5 cents per kWh or less, according to Lawrence Berkeley National Laboratory’s recent report “Utility-Scale Solar 2014.” Whereas the cost for geothermal power can be anywhere from 5 cents per kWh to 8 cents per kWh.
The good news for geothermal, according to McGinley, is that large power customers are eager for renewables, and they do not want it all in solar or wind — they want a balanced clean energy portfolio, including geothermal. Those big consumers, however, have a limit on how much they will pay for that energy.
