A recently announced geothermal energy project in Texas and the execution of power purchase agreements in California mark new milestones for geothermal energy in the U.S.
Southern California Edison Agreements
A late June announcement by Fervo Energy detailing the execution of two power purchase agreements totaling 320 MW with Southern California Edison, an investor-owned utility, garnered headlines in the energy and general media sectors and justifiably so, as the agreements mark a major milestone when it comes to geothermal energy PPAs.
Fervo said that the agreements are the world’s largest geothermal PPAs to date.
SCE will purchase the power from Fervo Energy’s 400 MW Cape Station project currently under construction in southwest Utah. The first 70 MW phase of the project is expected to be operational by 2026 and the second phase will be operational by 2028.
In 2021, the California Public Utilities Commission issued a mid-term reliability mandate requiring utilities to procure 1,000 MW of non-weather-dependent, non-battery, zero-emission energy to increase the reliability of the state’s electric grid.
“This decision catalyzed demand for geothermal, which provides firm, carbon-free power, filling gaps left by weather-dependent renewables like solar and wind,” Fervo said.
By using techniques adapted from the oil and gas industry, Fervo has de-risked a scalable approach to geothermal development, it said.
Early drilling results, released in February 2024, show faster drilling times and an overall reduction in costs at Cape Station, Fervo’s 400 MW development in Beaver County, Utah.
“These positive results support continued commercialization and a readiness for large-scale agreements like this, the world’s largest geothermal PPA. Fervo has now contracted 373 MW of renewable power from Cape Station,” it said.
In 2022, Fervo contracted 53 MW of power from Cape Station to California community choice aggregators, and in 2021, Fervo and Google signed the world’s first corporate agreement to develop next-generation geothermal power.
Fervo’s commercial pilot in Nevada came online in November 2023 and is sending carbon-free electricity to the local grid that powers Google’s data centers.
California is Biggest Generator of Geothermal Energy in U.S.
With more than 650 active, high-temperature (fluids over 212 degrees F) wells that tap into geothermal fields, California is the largest generator of electricity from geothermal energy in the United States, the California Department of Energy Conservation notes on its website.
The Geysers, the world’s largest geothermal field, is in Sonoma, Lake, and Mendocino counties.
Other major geothermal locations include the Salton Sea area in Imperial County, the Coso Hot Springs area in Inyo County, and the Mammoth Lakes area in Mono County, according to the California Energy Commission.
Company to Build First Geopressured Geothermal System in Texas
Meanwhile, Sage Geosystems on August 13 said it had entered into a land use agreement with San Miguel Electric Cooperative Inc. for the 3-MW Geopressured Geothermal System energy storage facility.
Sage and the cooperative said the project will be the first to supply geothermal energy storage to the Electric Reliability Council of Texas grid.
Sage’s “EarthStore” system will be in Christine, Texas near the SMECI lignite coal power plant. Sage will operate as a merchant, buying and selling electricity to the ERCOT grid.
The facility will use Sage’s proprietary technology to store energy, targeting 6-to-10-hour storage durations and delivering a round-trip efficiency of 70-75 percent.
In addition, water losses are targeted to be less than 2 percent. At scale, this energy storage system will be paired with renewable energy to provide baseload and dispatchable power to the electric grid.
When combined with solar power, Sage’s EarthStore facility enables 24/7 electricity generation at a blended Levelized Cost of Energy well under $0.10/kWh, it said.
A 2023 study explored the potential for geothermal energy in Texas and discussed how it could be rapidly developed using existing oil and gas industry technology.
The study, The Future of Geothermal in Texas: The Coming Century of Growth & Prosperity in the Lone Star State, was conducted by the University Lands Office, and the International Energy Agency and researchers at Texas universities, the University of Texas at Austin, Southern Methodist University, Rice University, Texas A&M University, and the University of Houston.
If the Texas oil and gas industry were to drill 15,000 geothermal wells each year for four years, it would provide the energy equivalent of all oil and gas used for electricity and heat production in Texas today, the study found.
Sage Geosystems, Meta Enter Geothermal Energy Agreement
And on Aug. 26, Sage Geosystems and Meta Platforms announced a new agreement that they said “would significantly expand the use of geothermal power in the U.S. and would be the first use of next generation geothermal power east of the Rocky Mountains.”
This partnership will deliver up to 150 MW of new geothermal baseload power to support Meta’s data center growth.
Sage will utilize its proprietary Geopressured Geothermal System to provide power to Meta’s data centers. Meta was formerly known as Facebook Inc.
In a post about the news, Meta said that the first phase of the project will aim to be online and operating in 2027.
Public Power Utilities and Geothermal Energy
A number of public power utilities have geothermal energy in their resource mix.
In particular, the California public power community has been active in adding geothermal energy to its generation mix for decades.
In 1984, California public power utility Turlock Irrigation District acquired an interest in a geothermal power plant in the Geysers Steam Field, the world’s largest geothermal field, located in California’s Lake County approximately 70 miles north of San Francisco. TID’s portion of the project is capable of generating 6.8 megawatts.
In 2023, California public power utility Pasadena Water and Power said that it was expanding its energy portfolio with 25 megawatts of geothermal energy.
The City Council approved a 15-year, 25-MW contract with the Southern California Public Power Authority for the purchase of geothermal energy from Geysers Power Company, LLC, an indirect subsidiary of Calpine Corporation, beginning on January 1, 2027.
Along with the Coso Geothermal Project contract, which was acquired in 2020 and is also anticipated to start delivering energy in 2027, geothermal power is expected to make up approximately 25 percent of PWP’s retail energy sales by the end of 2027.
Geothermal energy is also part of the generation portfolio for the Los Angeles Department of Water and Power.
Northern California Power Agency
In 1997, Northern California Power Agency was one of the pioneers that created the world’s first geothermal-injection system to recharge the production wells at the Geysers, it notes on its website,
Since steam extracted from the Geysers is not naturally replenished by groundwater, a supplementary source of water is needed.
NCPA notes that it contracted with Lake County Sanitation District to take their treated wastewater effluent and -- utilizing two 1-megawatt solar installations -- pump it more than 26 miles for injection into the geothermal reservoir, dramatically extending the life of this clean, base-load resource.
Had NCPA not acted, the Geysers facilities would have ceased production in 2013. “Instead, this critical base-load renewable resource will continue to generate clean, reliable power for decades to come,” it said.
NCPA, a California Joint Action Agency, was established in 1968 by a consortium of locally owned electric utilities to make joint investments in energy resources that would ensure an affordable, reliable, and clean supply of electricity for customers in its member communities.
NCPA members include municipalities, a rural electric cooperative, and other publicly owned entities for which the public agency provides such services as the purchase, aggregation, scheduling, and management of electrical energy.
SCPPA
The Southern California Public Power Authority, a joint powers authority consisting of eleven-member municipal utilities and one irrigation district, has entered into a number of geothermal energy PPAs as detailed on its website.
Those PPAs include, among others:
- SCPPA entered into a 25-year PPA with Ormat for 16-MW of long-term geothermal renewable energy. The Casa Diablo IV geothermal project is located in Mono County, California and began making deliveries to SCPPA on July 14, 2022. Participants: Colton, California (100%).
- SCPPA entered into a 25-year PPA with Open Mountain Energy for 12.5-MW of long-term geothermal renewable energy. The Star Peak geothermal project is located in Lyon County, Nevada and began making deliveries to SCPPA on September 28, 2022. Participants: Glendale (100%).
- SCPPA entered into a 20-year PPA with Coso Geothermal Power Holdings, LLC for 17.5MW – 55.3 MW (depending on contract year) of long-term geothermal renewable energy. The Coso geothermal project is located in Inyo County, California and began making deliveries to SCPPA on January 1st, 2022. Participants: Banning (15-45%), Riverside (48-62%), Pasadena (21-37%, beginning in year 6).
California Community Choice Aggregators
Community choice aggregators in California are pursuing geothermal energy projects.
For example, Sonoma Clean Power, in partnership with the counties of Sonoma and Mendocino, is leading an effort to build 600 megawatts of new geothermal energy in its service area over the next decade.
In early 2023, Open Mountain Energy,a geothermal energy developer, said it had executed five power purchase agreements for near term development projects in Nevada and California.
The projects include Fish Lake Geothermal, Humboldt House Geothermal, Whitegrass No. 2 and Mayacma Geothermal, LLC. The power purchase agreements were with a number of Caliifornia CCAs, along with public power utility Lassen Municipal Utility District.
UAMPS (Utah)
Meanwhile, Utah Associated Municipal Power Systems has a Firm Power Supply Project manages various power supplies for participating members.
The project agreement provides flexible terms for the purchase and the sale of capacity and energy from multiple resources.
The Project includes long-term market purchases, wind energy from the Pleasant Valley Wind Energy Facility, geothermal/solar from the Patua Geothermal Plant, waste heat from the Sunnyside Cogeneration Facility, and three utility scale solar projects, Red Mesa Tapaha and Steel Solar 1(A) and 1(B).
UAMPS is a full-service interlocal agency, that provides comprehensive wholesale electric energy services, on a non-profit basis, to community-owned power systems throughout the Intermountain West. The UAMPS membership represents 50 members from Utah, Arizona, California, Idaho, Nevada, New Mexico and Wyoming.
Department of Energy Report on Geothermal Energy
At the federal government level, the U.S. Department of Energy in March 2024 issued a report about geothermal energy, “Pathways to Commercial Liftoff: Next-Generation Geothermal Power.”
“Next-generation geothermal has a unique value proposition, including minimal workforce and supply chain risk, low land use, and flexible generating capability,” the DOE report said.
The geothermal industry “leverages existing fossil energy supply chains and workforce. Geothermal energy may also be stored in the subsurface and dispatched flexibly, enabling it to load-follow variable renewables as long-duration energy storage, providing a needed grid service,” the report said.
“Because next-generation geothermal applies subsurface engineering technologies leveraged by the oil and gas industry that have caused environmental harms in the past, such hydraulic fracturing, it can create public concerns. Technology differences between oil & gas and geothermal hydraulic fracturing reduce the actual likelihood of such harms occurring; however, transparency and monitoring of environmental health impacts are the fastest path to ensuring that these environmental risks are low and provide a social license to operate,” the report said.
DOE said that “these unique capabilities help enable geothermal energy to command a price premium -- conventional and next-generation geothermal power purchase agreements are signed today for between $70 and $100 per MWh.”
The report noted that these agreements are driven by increasing systemwide recognition of the need for clean firm power.
DOE also said in the report that next-generation technologies can expand geothermal power by more than a factor of 20, providing 90 GW or more of clean firm power to the grid by 2050 across the U.S. based on power sector modeling detailed in the report.
“Variation in technical and market factors, such as the availability of land for power generation, the addition of flexible power, and the availability of other nascent technologies, could drive over 300 GW of deployment by 2050,” the report said.
DOE Invests $31 Million to Reduce Costs and Expand Geothermal Energy
More recently, on Aug. 26, DOE announced the selection of six projects that will receive up to $31 million to advance geothermal energy throughout the country.
The projects will improve the construction of enhanced geothermal systems and demonstrate how reservoir thermal energy storage can reduce energy needs for industry – supporting DOE’s Enhanced Geothermal Shot™ goal to reduce the costs of enhanced geothermal systems (EGS) by 90% by 2035 and DOE’s Industrial Heat Shot™ goal to develop cost-competitive industrial heat decarbonization technologies with at least 85% lower emissions by 2035.
The selected projects are:
- Clemson University (Clemson, SC, $4,880,182): This project will develop an AI-enabled, photoacoustic imaging tool for high-temperature and high-pressure well logging to assess geothermal well integrity without active cooling.
- Innovative Downhole Solutions Inc. (Houston, TX, $2,509,545): This project will develop a durable ultrasonic measurement tool capable of operating for 24 hours in high-temperature geothermal environments to assess wellbore construction materials and practices.
- Lawrence Berkeley National Laboratory (Berkeley, CA, $2,016,000 ): This project will develop a tool for geothermal borehole integrity evaluation, designed to assess wellbore integrity in extreme conditions without the need for downhole electronics.
- Los Alamos National Laboratory (Los Alamos, NM, $3,674,955): This project will develop a high-resolution acoustics-based tool to provide high-fidelity data for evaluating EGS components under extreme conditions.
- Schlumberger Technology Corporation (Houston, TX, $10,000,000): This project will develop a wireline tractor-conveyed system for long-term integrity modeling of cement and casing.
- Project Development Solutions, Inc. (Bakersfield, CA, $7,899,807): This project will pilot a reservoir thermal energy storage (RTES) demonstration project at Kern Front Oil Field in Bakersfield, pairing subsurface geothermal reservoirs with a steam system and process heat off-taker.
