WorldWide Drilling Resource

10 NOVEMBER 2016 WorldWide Drilling Resource ® Geothermal Power as an Emerging Option Adapted from Information Provided by H. Sterling Burnett, Ph.D., and the Heartland Institute According to a new report from BCC Research, geothermal energy production will rapidly increase throughout the world from 2015 to 2020. Globally, geothermal energy had a total installed capacity of 12.2 gigawatts (GW) in 2014, with a market value of $12.9 billion. NorthAmerica leads the way with 41.8% of the international market, or 5.1 GW, followed by Asia-Pacific with 38.5% and Europe with 17.5%. The BCC study found geothermal energy will grow at a compound annual growth rate of 10% from 2015 to 2020, meaning the value of the world’s geothermal energy market will reach almost $20.8 billion in 2020. BCC Research Analyst Aneesh Kumar told American Energy News : “In the long term, increasing demand for renewable energy production and infrastructure development in developing regions, along with the increasing demand for power trans- mission across long distances and increasing investments in geothermal energy generation, smart grids, and power infra- structure will be key drivers of this market.” Like other sources of renewable energy, geothermal energy production has substantial capital investment costs; but unlike wind and solar power, it does not require large amounts of space. In fact, it can often be constructed below the structures it supplies power to, and produces consistent, rather than intermittent power. Still, geothermal exploration and dr i l l ing can be uncertain, not always y i e l d i ng pro f i t ab l e resul ts. Due to this factor, much of the geothermal industry relies on government support to overcome these costs and risks. A recent study by the Institute of Political Economy (IPE) at Utah State University, Reliability of Renewable Energy: Geotherma l, noted the most important subsidy for geothermal energy came from the 2004 American New Jobs Creation Act, which gave geo- thermal energy producers a production tax credit of 2.3 cents per kilowatt hour. In comparison to other forms of energy, subsidies for geothermal energy pro- ducers were relatively small. Of the $13.2 billion in energy subsidies provided to energy producers in fiscal year 2013, wind power received $5.4 billion and solar power received $5.3 billion. Solar power was by far the largest recipient of subsidies based on the amount of energy produced per dollar invested. In 2013, the geothermal industry received $345 million in government subsidies. According to the IPE study, if subsidies are left out of the cost benefit analysis, geothermal plants are a cost-efficient way to produce electricity because of their low operations and maintenance costs, and because they are physically reliable and can easily accommodate changes in electricity demand. WGP Project - Geysers, California, courtesy U.S. Geothermal, Inc.