Earth power

The control room at Ormat Technology’s Steamboat geothermal facility has a wall of circuit breakers that surround a desk with a lone computer and an empty chair. This vacancy is normal for the control room because the entire power station, which is near the junction of U.S. 395 and Mount Rose Highway, is operated by five employees. Mechanical engineer Chris Reede’s office is down the road in the two-room, single-wide trailer that houses engineering projects.

The geothermal plant was built by Ormat, a renewable-energy company based in Israel. At this plant, the Earth’s internal heat boils water, which turns turbines, generating electricity.

On a normal workday, 23-year-old Chris Reede sits in his wood-paneled, ’70s-styled office designing new engineering projects. CAD (computer-aided drafting) drawings adorn the walls between the window and the door into the next office. Reede spends about 50 percent of his time in this room, conducting engineering projects and making field logs that he sends to a specialist in Israel. The other half of the time, Reede’s out of the office, walking through the jungle gym of pipes that make the Steamboat Hills facility on Powerplant Drive in Reno.

Reede started working for Ormat as an intern in 2007 and was later hired on as a full-time employee. He chose to work for Ormat because he wanted to help produce clean energy for the planet.

“It feels good to work for a company that is doing something that is good for the world, or at least good for Reno,” Reede said. “I’m helping the world and getting paid to do it.”

Reede is one of about 100 employees hired by Ormat in Nevada, where geothermal energy is becoming a factor in the increasingly competitive energy market.

Birth of an innovation
Ormat started in Israel in 1965 after husband and wife Lucien and Yehudit Bronicki took out a second mortgage on their home and bought patents from Lucien’s energy research lab, which closed due to a lack of funding after a change in Israeli politics. The company’s newly owned patents used a heat exchange process and turbines to create electricity. Ormat’s first project was a solar pond on the Dead Sea. The project successfully created electricity from stopping the water’s convection current by adding salt, causing a drastic temperature difference between the upper and lower halves of the water. The hot water was then converted to steam, which powered a turbine. While the project was successful, it was expensive.

The company had the rights to innovative technology, but it was struggling to find a cost-effective way to apply it in a world where gas and oil were cheap.

“In 1965, oil and gas prices were very low, so [the heat exchange technology] wasn’t commercially viable,” said Paul Thomsen, Ormat’s public policy manager. “They struggled for years to get the company to take off, so they began looking at another avenue to apply their technology—and that was geothermal.”

Ormat’s first United States-based project was built in the Nevada desert in 1984. The project at Wabuska was a one-megawatt project.

Later, in 1986, Ormat built the Steamboat Hills facility, which continues to produce power. The company shipped the heart of the power plant, the turbines, from Israel and began tapping into the heat made accessible by Nevada’s high tectonic activity.

“They shipped it here in an international shipping container, hooked it up to this great resource that is the Steamboat Springs area, and it has been producing power ever since,” said Thomsen. “The technology is sturdy enough that it has worked for 23 years.”

Reno is home to Ormat’s North American corporate headquarters. The company moved the headquarters to Reno for its geographic location, which sits in the center of high tectonic activity. Beneath Nevada, tectonic plates are constantly spreading apart, allowing heat to come closer to the surface.

At the time Ormat was looking for a headquarters location, Nevada’s political climate made Reno attractive. The company first looked at San Francisco and New York City, but the search ended in Reno after the company was invited to talk with Gov. Richard Bryan.

“For the company to come to the state in one day and get to sit down with the governor for an hour was an incredible sales pitch by the state of Nevada,” Thomsen said.

Ormat currently runs nine power plants with five under construction and 20 geothermal prospects—locations receiving further study—in Nevada. That equals 100 megawatts in operation that could power 75,000 homes, and 85 megawatts in development. According to Ormat, the 100 megawatts that are currently online displace 750,000 million tons of carbon dioxide and 220,000 million tons of oil. They plan to bring on 100 megawatts a year in the United States.

Nevada’s hot prospects
Geothermal energy has always been in Nevada—or more precisely, under Nevada. If it’s not grown, it has to be mined—right? Wrong. Geothermal energy is not mined, but rather tapped, and at a fraction of the environmental impact of fossil fuel production.

But the energy wasn’t tapped until 1984, when Ormat drilled. The cleaner energy was more expensive and harder to expand throughout the power grid. Since then, Sierra Pacific Power Company has bought and distributed geothermal power on their grids, but the power lines are still dominated by electricity produced with coal and gas.

SPPC renewable-projects development director Jack McGinley says that it is important to keep space on the grid for renewable projects, but it is also important to keep space for nonrenewable energy, such as coal and gas.

“It’s important to diversify in different technologies,” McGinley said. “I believe we need to have a balanced portfolio—coal and gas and geothermal—in case there is a drastic change in one of those resources, we can fall back on the others.”

In 1997, the Nevada Legislature enacted the state’s first Renewable Portfolio Standard (RPS). The legislation required electricity utilities to purchase a meager 1 percent of renewable energy for their total energy output in Nevada.

In 2001, the legislature approved a far bolder standard that required energy utilities to purchase 15 percent renewable energy of their total energy output in Nevada by 2013. The plan set gradual goals for energy utilities, raising the requirement 2 percent every two years. Then in 2005, the legislature passed a bill that extended the RPS to 20 percent by 2015—a goal that Sierra Pacific Power Company expects to exceed.

The RPS revamped the entire renewable energy market in Nevada. It forced utilities such as Sierra Pacific Power Company and Nevada Power to buy and distribute renewable energy, making them recognize the viability of renewable energy producers such as Ormat.

“Nevada was really progressive when it implemented the Renewable Portfolio Standard,” Thomsen said. “It said you have to do this, or you’ll be penalized, so utilities had to stretch a little bit … and it really created room for companies like us to move in and show we are a reliable, credible resource.”

Ormat and Sierra Pacific Power have had a relationship since Ormat first tapped into Nevada. Under the RPS, as more companies begin working together on geothermal projects, consumers may begin to see a more consistent price on their power bills—not to mention a cleaner environment.

Welcome to the machine
A machine has started up in Nevada for geothermal energy. One gear turns the legislative process while another turns the market, cranking out new projects and setting goals for the state’s energy policy. On March 26, Nevada Power, a subsidiary of Sierra Pacific Resources, meshed components in a joint ownership agreement with Ormat Nevada Inc., a subsidiary of Ormat Technologies, in the co-development of the Carson Lake geothermal energy project.

The Carson Lake geothermal project, which is set for location near Fallon, will produce 30 megawatts of power. This is the first project co-developed by a power utility and geothermal producer—and according to Jack McGinley, it’s a preview of more projects to come for Sierra Pacific Resources.

“We’re talking to folks about wind projects and geothermal projects,” McGinley said. “Geothermal is cost competitive and cheap in price—it just makes sense. The company is working and talking with developers to see more projects devoted to renewable energy.”

Sierra Pacific has 135 megawatts of projects set to go online soon and 288 megawatts of projects that have completed the contract phase and are expected to go online in the next couple of years.

Nevada’s geothermal facilities total approximately 257 megawatts with 300 more set for installation in the next two to three years. By 2015, experts predict that Nevada could reach 1,500 megawatts, but only if the land is available for use.

Land of opportunity
While companies have been cultivating relationships, government has been making land available, studying the environmental impacts, and conducting bids. The Bureau of Land Management leads this program, and at the reins sits BLM geothermal program leader Richard Hoops.

Hoops is in charge of planning the programs that go into the leasing of geothermal lands. In the United States, three-quarters of the federal lands leased nationally are leased in Nevada, so it’s not an understatement to say that Hoops has a lot of dirt on his hands.

“All lands have to go through a competitive bid process,” Hoops said. “Industries nominate the land, but there are other tracts we offer for sale. Then we take those tracts of land to an environmental field office and make sure everything is environmentally sound.”

The field office takes a fine comb to the nominated land. They make sure that if a geothermal facility is built on the given land, it’s not going to cause serious harm to the environment.

“We make sure we don’t impact the water supply, migratory birds, the hot springs … if there’s a group of sage grouse migrating through a tract of geothermal land at that time, we make sure we don’t use that land,” Hoops said. “Fortunately, these plants have essentially no emissions and occupy few acres.”

Once the environmental evaluation is completed, the BLM releases a sales outline 45 days prior to the sale. Hoops said these sales bring revenue back to the counties.

“Royalties from the bids will go back to the state and counties,” Hoops said. “For counties, this is a great revenue resource. Around half a million dollars a year will go to the counties.”

The next land auction will be conducted this July. Hoops said bidders can expect aggressive bidding because many nominations have been made, as well as application for drilling permits.

“This year has 93 nominations that total to about 275,000 acres,” Hoops said.

Under the Renewable Portfolio Standard, Hoops said the amount of land made available by the government will need to increase drastically.

“We have to almost double the statewide capacity in the next couple years,” Hoops said.

While the BLM works on leasing land, other experts continue to search for new geothermal sites. These discoveries could place Nevada in the new frontier of a geo thermal gold rush.A giant steps forward

There’s an outdated map of geothermal hotspots in Nevada outside Lisa Shevenell’s office. She’s director at the Great Basin Center for Geothermal Energy. Even in its outdated form, the geothermal hotspots are too many to count. The map is in the process of getting revamped with new sites. They’ve been finding so many new hotspots that the department has decided to publish the map online, so it can be updated on site.

“There’s a lot out there,” Shevenell said. “Some of these have been found by accident—a rancher drilling a well and complaining that the water is hot. I would like to see a lot more direct use for geothermal sites. Mainly what we use these waters for is spas.”

But reaching Nevada’s maximum geo-thermal power potential isn’t going to be easy. Various factors are at play, such as funding and workers. Many of these new geothermal facilities need employees, and Shevenell is afraid the universities are failing to meet that demand with students and funding.

“Most of the funding up to this point has been from the U.S. Department of Energy, and their budget this year was only $5 million for the entire country,” Shevenell said. “That’s almost nothing. We’ve been operating on one to one-and-a-half million a year.”

With few students studying geothermal at the universities, companies are finding it hard to fill positions. This may slow down new companies like the Italy-based company Enel, the third-largest energy provider in the world, which recently entered the Nevada market.

Shevenell believes Enel will bring fresh competition to the market currently dominated by Ormat. She is working with Enel to create new university projects in geothermal power.

“We’ve got another giant on the scene. They bought a couple properties here so we are probably going to be seeing them a lot more,” Shevenell said. “They’re probably going to be pretty good citizens. I’m working on a memorandum with them right now to do some cooperative research and training with students.”

At the end of the day, Shevenell looks forward to Nevada’s geothermal future. She shares the same perspective as most in the geothermal community—geothermal energy percentages will continue to rise in Nevada’s energy portfolio.

“I don’t see us going in any other direction unless we’re just stupid, frankly,” Shevenell said. “I’m confident we have 1,500 megawatts in Nevada that could be developed if economic and political and all the various considerations align properly.”

Meanwhile, back at Steamboat Hills, near the junction of U.S. 395 and Mount Rose Highway, Chris Reede sits in his wood-paneled, ‘70s-styled office, developing CAD drawings to adorn the walls that separate his desk from a geothermal power plant—drawings that may well impact the future of Nevada energy.