Updated U.S. geothermal supply curve

This paper documents the approach used to update the U.S. geothermal supply curve. The geothermal supply curve analysis undertaken in this study estimates the supply of electricity generation potential from geothermal resources in the United States and the levelized cost of electricity (LCOE), capital costs, and operating and maintenance costs associated with developing these geothermal resources. The supply curve data are used as input to annual reporting by the U.S. Department of Energy (DOE) under the Government Performance and Results Act of 1993, the DOE portfolio development support processes, and market penetration models in support of other DOE analyses. Supply curves were developed for four categories of geothermal resources: identified hydrothermal (6.4 GWe), undiscovered hydrothermal (30.0 GWe), nearhydrothermal field enhanced geothermal systems (EGS) (7.0 GWe) and deep EGS (15,900 GWe). Two cases were considered: a base case, which assumes modest improvements in EGS reservoir performance from current benchmarks, and a target case, which assumes significant advances in reservoir performance from the Geothermal Technologies Program (GTP or the Program) funding of EGS research, development, and demonstration projects. Project development costs for the geothermal resources in the assessment were estimated using the Geothermal Electricity Technology Evaluation Model (GETEM). Inputs for GETEM were based on probability distributions of geothermal technology costs and performance levels from experts submitted as part of the GTP’s 2009 technical risk assessment. Supply curves were generated for each of the four geothermal resource categories for both the base and target cases. Capital costs by project phase for the different technologies were also calculated. For both cases, hydrothermal resources dominate the lower cost range of the combined geothermal supply curve. The supply curves indicate that the reservoir performance improvements assumed in the target case could significantly lower EGS costs and greatly increase EGS deployment over the base case. The paper discusses the results of the supply curve analysis and improvements that can be made to future supply curve representations. INTRODUCTION AND PURPOSE This paper documents the approach taken as part of the Department of Energy (DOE) Geothermal Technologies Program’s (GTP or the Program) annual supply curve update to characterize and represent the supply of electricity generation potential from geothermal resources in the United States. The geothermal supply curve is used as the basis for input to market penetration models for an array of tasks that analyze the competitiveness of geothermal electricity generation against other forms of electricity generation and forecast the penetration of geothermal technologies into the national electricity generation market. The primary use of data from the supply curve is to provide cost input for the annual reporting under the Government Performance and Results Act of 1993 (GPRA) and for the DOE portfolio development support processes. Geothermal supply curve data are also supplied as input for numerous additional DOE analyses. The primary purposes of this paper are to: 1. Document the approach taken in identifying geothermal resources and determining the electricity-producing potential of these resources, 2. Document the approach taken in estimating the levelized cost of electricity (LCOE), capital costs, and operating and maintenance (O&M) costs from these geothermal resources, and 3. Discuss the resulting supply curve and how improvements can be made to future supply curve representations. For this study, the geothermal resource was broadly split between two technologies: conventional hydrothermal and enhanced geothermal systems (EGS). The hydrothermal resource consists of the naturally occurring geothermal sites conventionally used to produce electricity. Enhanced geothermal systems are artificial geothermal systems created by drilling into formations of hot rock, hydraulically stimulating the formation to open and extend fractures, intersecting the fractures with one or more drilled holes, and then circulating fluid through the fractures. Injected fluid is heated by the hot rock as it is circulated through the reservoir, brought to the surface, and then used to produce electricity in a power plant before being re-injected into the reservoir, forming a closed-loop system. To develop the supply curves for this study, the hydrothermal and EGS resources were further subdivided into four geothermal categories: identified hydrothermal, undiscovered hydrothermal, near-hydrothermal field EGS, and deep EGS. In defining the geothermal resource, published and available resources were used whenever possible. In particular, the supply curve update benefited greatly from the geothermal resource assessment performed by the U.S. Geological Survey (USGS) in 2008 (Williams, Reed et al., 2008b). The supply curve update also drew upon methodologies and data from the Massachusetts Institute of Technology (MIT) Future of Geothermal Energy report to characterize U.S. EGS resources (Tester et al., 2006). The LCOE of the geothermal resources used to generate the supply curve were estimated using the Geothermal Electricity Technology Evaluation Model (GETEM), with cost input elicited from experts as part of a recent GTP geothermal technical risk assessment (Young and Augustine, 2010 (in press)). A more detailed account of the methodology and assumptions used to develop the geothermal supply curve, including additional analysis, is described in a forthcoming National Renewable Energy Laboratory (NREL) technical report (Augustine, 2010 (in press)). GENERAL APPROACH AND ASSUMPTIONS The same approach was used for each of the geothermal resource categories considered. The primary steps in generating a supply curve and model input were the resource characterization and the estimation of the cost of the resource. For the resource characterization, the category and scope of the geothermal resource were defined. Next, information sources were identified and gathered from the literature and other available sources. These were assembled into a database of the potential electrical generating capacity of the resource. The cost of developing each category of geothermal resource was estimated using the resource characteristics from the characterization, the technology components required to develop the resource, and any factors or assumptions included in the funding case under which the resource would be developed. The potential electrical generating capacity from the resource characterization was combined with the estimated cost of developing that capacity to generate the supply curve.