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Geothermal Value Chain Analysis

The document provides an overview of the geothermal energy industry value chain, including technology providers, service and developers, operators, and regulators. Major technology players include Ormat Technologies, Mitsubishi Power, and Engie SA. Companies involved in engineering, procurement, and construction include Ormat and Mitsubishi Power. Large operators in the US are Calpine Corp., Ormat Technologies, and CalEnergy Operating Corporation. The document also discusses rising technologies, regulatory barriers around land access and permitting, and impacts of the Inflation Reduction Act on increasing incentives for geothermal development.

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Shipra Rajput
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89 views23 pages

Geothermal Value Chain Analysis

The document provides an overview of the geothermal energy industry value chain, including technology providers, service and developers, operators, and regulators. Major technology players include Ormat Technologies, Mitsubishi Power, and Engie SA. Companies involved in engineering, procurement, and construction include Ormat and Mitsubishi Power. Large operators in the US are Calpine Corp., Ormat Technologies, and CalEnergy Operating Corporation. The document also discusses rising technologies, regulatory barriers around land access and permitting, and impacts of the Inflation Reduction Act on increasing incentives for geothermal development.

Uploaded by

Shipra Rajput
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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GEOTHERMAL

VALUE CHAIN
ANALYSIS
Duke Energy Club
Table of Contents

01 Technology Providers 02 Service & Developers

03 Operators 04 Regulators

2
Industry Overview

3
01
Technology
Providers
Major technology players and key
technologies in the market.

4
Technology Providers Overview
❖ BHE Renewables
➢ 10 geothermal power plants in Southern California's Imperial Valley
➢ Exploring ability to recover lithium from geothermal brine
➢ Also in the wind, solar, and hydroelectric power industries

❖ Ormat Technologies, Inc.


➢ Vertically integrated (exploration, development, manufacturing, operation, etc.)
➢ Binary technology
❖ Mitsubishi Power
➢ Mitsubishi Power was the first to develop a combined system of a two phase flow
transportation and a double flash cycle

❖ Engie SA (Europe)
➢ Focuses on developing geothermal activities in France and other foreign countries

5
Power Plant Types
❖ Dry Steam
➢ Uses hydrothermal fluids that are already mostly steam.
❖ Flash Steam
➢ Fluids pumped from deep underground through high
pressures enter a low pressure tank. This change in
pressure causes fluids to rapidly transform into vapor.
❖ Binary Cycle
➢ Lower temperature geothermal resources.
➢ Geothermal fluids pass through a heat exchanger that
contains a secondary, or binary, fluid that has a much
lower boiling point than water. The geothermal fluid heats
the secondary fluid to flash to vapor.

6
7
8
Rising Geothermal Technologies
❖ Enhanced Geothermal Systems (EGS)
➢ Human-made reservoirs created by injecting fluid into “hot rock,” which is heated
by the natural warmth of the Earth’s core
➢ The fluid re-opens pre-existing fractures, allowing it to circulate through the hot
rock, and bring the heated water to the surface. That hot water becomes steam
that spins a turbine, creating clean, renewable energy.
➢ DOE funding up to $74 million for seven EGS pilot projects.

❖ Ultra-Deep Geothermal Drilling


➢ Using gyrotron-powered millimeter-wave directed energy drilling, combined with
argon gas as a cleaner and coolant.
➢ A Springwise team expects to reach depths of 20 kilometers in 10 days.
➢ The company is currently building deployable machines which could be ready for
full-scale field testing by 2024.
9
02
Servicers &
Developers

10
Major Servicers and Developers
❖ Many companies that are technology providers are also involved with Engineering,
Procurement, and Construction (EPC)
➢ Ormat Technologies, Inc.
■ Design, obtain equipment, supplies, etc. and construct the geothermal facility
for customer.
➢ Mitsubishi Power
■ EPC orders for about 70% of the 107 geothermal power plants they have
delivered.

❖ Geothermal Well Drilling Groups

➢ DRAGIN Geothermal Well Drilling


➢ Geothermal Resource Group
➢ Iceland Drilling Company
➢ Ormat GEODRILL
11
12
13
03
Operators

14
Major Geothermal Operators
❖ Major utilities and other long‐term operators of geothermal power plants in the US.

15
16
Major Geothermal Operators
❖ Calpine Corp. (US)
➢ Operate the Geysers, the single largest geothermal electrical operation in the world
(13 power plants with net generating capacity of 725 MW)

❖ Ormat Technologies Inc. (US)


➢ Over 1,000 MW of geothermal energy operations (2021)
➢ 6 countries: Kenya, Guadalupe, Guatemala, Honduras and the United States

❖ CalEnergy Operating Corporation (US)


➢ Operator for BHE Renewables
➢ 10 geothermal power plants producing 345 MW in Southern California

❖ Lopez Inc. (Philippines)


➢ 1164 MW total geothermal power capacity (2021)
➢ Philippines’ leading 100% renewable energy producer

17
04
Regulators

18
Geothermal Regulating Barriers
❖ Two major regulatory portions for geothermal energy: land access and permitting
➢ Land Access issues: tribal and cultural resources, environmentally sensitive
areas, biological resources, land ownership, federal and state lease queues,
proximity to military installation
➢ Permitting issues: regulatory framework (federal and state), environmental review
process, ancillary permits
■ Many states do not have a geothermal staff to lay out a plan for development
❖ Largest barrier is obtaining a Power Purchase Agreement (PPA)
➢ Must show a demonstrated resource and an interconnection study/agreement
➢ Geothermal developers require large capex investment before knowing viability of
development to win a PPA

19
Federal Regulatory Framework

20
State Regulatory Framework

21
Inflation Reduction Act Impacts
❖ Residential Clean Energy Credit
➢ 30% tax credit until 2032, 26% (2033), 22% (2034)
❖ Production tax credit for electricity from renewables
➢ Base credit: $0.03kW, inflation adjusted
➢ Bonus credits: 5x increase for meeting prevailing wage and registered
apprenticeship requirements, 10% increase for meeting domestic steel, iron, and
manufactured products requirements, 10% increase for energy community location
❖ Investment tax credit for energy property
➢ 6% of qualified investment (for first 10 years), 5.2% in 2033, 4.4% in 2034
➢ Bonus credits: same as production tax bonus credits
❖ $1 billion for electric infrastructure loans for renewable energy in Rural America
➢ Finance the construction of distribution, transmission, and generation facilities for
renewable electricity in rural areas
➢ System improvements and replacements
➢ Available until September 30, 2031 22
Conclusions

The IRA is expected The largest players The current technology


to vastly increase across the industry are environment is more
capital available for vertically integrated fragmented than it
geothermal across technology has ever been between
providers, servicers, different technologies,
development, but,
and operators. Ormat, leaving ample room
more importantly, BHE, and Mitsubishi for Quaise to establish
incentivize consumer Power are successful a niche.
demand. major players.

Inflation Vertical Opportunity


Reduction Act Integration for Tech

23

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