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In the race to provide clean, renewable energy, geothermal development projects are gaining steam. According to the Geothermal Energy Association, in spring 2010, the United States led all countries in installed geothermal capacity, with approximately 3,086 megawatts throughout nine states. An additional 7,057 megawatts were being developed nationwide.

Most geothermal activity is occurring in western states, and Oregon ranks third in the U.S., behind only California and Nevada, with 370 megawatts in development.

And as with most renewable energy efforts, federal and state financial incentives have played a significant role in advancing the timeline to bring such projects to the fore. Last month, the U.S. Department of Energy announced a $96.8 million loan guarantee for a 23-megawatt project, the Neal Hot Springs, being developed in Southeastern Oregon.

Additional commercial-scale geothermal development in Oregon is planned for the Crump Geyser area in Lake County. With at least one well completed and an accompanying power plant expected to generate up to 30 megawatts, Crump Geyser is anticipated to be online before the end of 2013 in order to qualify for federal incentives. The developer has indicated that expansion of capacity may be a possibility.

A geothermal facility requires construction of a well up to thousands of feet deep to tap reservoirs of hot water. Once brought to the surface, the super-heated, mineral-laden water is used to spin a turbine to generate electricity. Water is then reinjected into the same formation from whence it came, to be reheated and withdrawn again.

Much like water resources, geothermal resources can provide base-load power at performance levels above those such as coal. Also like hydro, geothermal is more consistent than intermittent renewable energy sources such as wind and solar. Geothermal power also is considerably less expensive than solar or nuclear power and is typically comparable to wind, new coal plants or biomass.

Geothermal has a fairly benign environmental footprint. It requires minimal surface space, so the facilities do not take up a large amount of land. Also, greenhouse gas emissions are either nonexistent or minimal, depending on the type of geothermal system used.

Another benefit of geothermal development is speed. Projects typically can be developed within a three-year period and, with the advance of new technologies, can operate with fluids below 200 degrees Fahrenheit. This creates opportunities for new development in areas that only a few years ago were not considered viable.

So, with all of these favorable characteristics, does geothermal have a downside? Locating geothermal reservoirs sufficient to merit commercial-scale development requires significant up-front investment. By comparison, the process and risk associated with evaluating opportunities in other renewables such as wind and solar are essentially straightforward.

Extensive preliminary exploration efforts are required to identify areas with the highest probability of possessing a sufficiently sized geothermal reservoir. However, greater certainty of real production capacity does not occur until at least one well is completed. This is a significant consideration, because one well can cost millions of dollars, depending on depth and geologic conditions.

Subsequently, investment in such projects requires a certain stomach for risk. For most stakeholders in the renewable energy race, however, the payoff from being able to produce a long-term supply of clean, reliable, base-load power is certainly worth the gamble.

Peter Mohr is an attorney in the energy and the environmental and natural resources practice groups at Tonkon Torp. Contact him at 503-802-5759 or [email protected].