Despite the growing demand for clean sources of energy in order to meet the state’s renewable energy portfolio standard goal, which has propelled the development of solar and wind energy, others such as geothermal have been left behind.
The high initial cost and the slow regulatory process to get plants permitted have caused California to consider importing power from other states even before investing in further development of geothermal energy.
Now, a startup Australian firm wants to tap into the big potential for geothermal at the Salton Sea area by building a massive plant, the first in many years, thanks in part to a very different approach from what has been used in past development.
There are three key aspects in which Controlled Thermal Resources differs from previous development size, pricing and partnership with a mineral extraction firm.
Eleven months ago, Controlled Thermal Resources signed an agreement with the Imperial Irrigation District to lease 1,880 acres of land in the southeastern corner of the Salton Sea to begin the exploration to find the high-end resource the company is looking for.
“The Salton Sea field is very refined and is not as big as it may seem, is quite narrow to get the really good resource,” said Controlled Thermal Resources chief executive officer Rod Colwell.
The firm is currently awaiting permits from Imperial County to begin drilling between April and May to go through the main component of identifying the resource.
Economy of scale
At 280 megawatts, the proposed Hell’s Kitchen will be the largest facility in the country and Colwell hopes it can be fully operational by 2021. All existing plants in the Valley currently produce less than 50 megawatts.
To make it all happen Controlled Thermal Resources is making the most out of the economics of scale. By building a facility capable of producing much more power it allows the firm to lower its operation cost per megawatt.
“We quickly determined that making a facility that produces 50 megawatts was completely unviable when it comes to cost per megawatt,” Colwell said. “The LCOE (levelized cost of electricity) would’ve resulted in a million dollars a megawatt, which is off the charts.”
The one setback of the ambitious is acquiring the necessary permits from the CEC to build the actual facility which can be a slow process. Facilities that produce more than 50 megawatts are permitted by the CEC, others that produce less are permitted by the county.
As extravagant as the project might seem, Colwell and his firm have taken their time in the process to take the proper steps.
Colwell, who has a background in real estate, began looking into the possibility of getting involved in the renewable energy industry but with a change in government in Australia in 2007 resulted in incentives going away and engaging in solar was no longer feasible. Due to the geology in Australia geothermal wasn’t viable either so he and his team turned to California.
“We looked at the geysers and felt there were too many straws in the milkshake and Lessen Canyon was a little bit too green for us (too little development occurring),” he said. “The Salton Sea area was very special, we came here in 2011 and really hound in previous efforts. There were hundreds of wells and began to determine the areas in which we should be, and more importantly where we shouldn’t be.”
Once they identified what they considered the best possible location they got the ball rolling.
The second unique trait of this project is their partnership with another startup company, Alger Alternative Energy, which specializes in mineral extraction from geothermal brine, the fluid from wells, which is used to generate power. Colwell said that by starting out with mineral extraction operations in mind, they can design the facility in a way that they can incorporate Alger Alternative Energy’s technology to prevent it from interfering with the flow of the geothermal brine during energy production.
“We have to design certain aspects of the facility with the precaution that if their plant goes down, we need to generate valves so that we can generate power and vice versa,” Colwell said. “We’ve recently had workshops with engineers to get a broad sense of how the plant will be designed.”
Also by sharing the land, water, power lines and other infrastructure, the operation costs for both companies decreases.
Alger Alternative Energy was founded by Tracy Sizemore, who worked for Simbol Materials when it was partnered with EnergySource to extract different minerals such as lithium, potassium and silicon, which are found in the geothermal brine but due to internal struggles, the company ceased operation in early 2015. Sizemore couldn’t be reached for comment.
Despite the issues, Simbol officials said its technology was successful. Alger Alternative Energy acquired Simbol’s technology with additional patents which Colwell says he has seen working as advertised.
Graeme Donaldson the Salton Sea program manager for IID said that as the landowners they really hope to see Controlled Thermal Resources succeed because of the many benefits that it can bring when it comes to economic development in the area, jobs and a path to aid in the restoration efforts at the Salton Sea.
“If they are successful, then everyone else involved will be successful as well,” Donaldson said. “It will be a challenge but renewable energy is here to stay and geothermal will have a role to play as part of the state’s RPS goals.”
The challenges and high costs associated with geothermal plants have kept new developments from taking place at the Salton Sea, but CTR’s fresh approach may be the key to tap into the vast amount of potential for geothermal.
“If it (Controlled Thermal Resources) wants to be competitive it needs to have more than one string to its bow,” Donaldson said. “Their approach of the economies of scale will give them the ability to get their overall costs down in order to be competitive in the renewable energy market which is a very tight arena.”
Another tool that CTR is using in its project is flexibility on its pricing which would fluctuate during different times and would limit production in the middle of the day when solar energy is being produced at a large scale but ramped up once the sun goes down to incentivize the use of clean geothermal power rather than fossil fuels to produce electricity during the evening hours.
“In the late afternoon our prices would increase with demand but stay below that of gas peaking plants so as to encourage geothermal procurement rather than gas ramping,” said CTR chief engineer, Jason Czapla in an email. “Our overall average price throughout the day would allow our project to meet its financial objectives while allowing geothermal to be competitively priced compared to solar and gas ramping at their peak periods.”
Local officials have long argued that the state needed to get involved in making geothermal development more attractive for developers because of its benefits. IID as part of its Salton Sea Restoration and Renewable Energy Initiative identified geothermal energy development at the Salton Sea as a key aspect for emissive dust mitigation
The emissive dust at the Salton Sea has been a growing health concern as the sea continues to recede. The Imperial Valley has one of the highest rates of children with respiratory diseases in the state.
The Hell’s Kitchen plant could be the proof of concept the local officials can showcase the state on how beneficial the development can be for the Imperial Valley and the Salton Sea.
“This is really a test case and is a good one that will allow us to set the guidelines on bringing geothermal, habitat, mitigation and restoration together in an expedited timeframe,” Donaldson said. “It’s crucial that everything moves along together.”
Colwell said the facility will generate between 85 to 90 full-time jobs and will also peak at 460 construction jobs.
The project will start at 280 megawatts but if the source and the demand are there CTR conceives that it may be able to produce up to 700 megawatts later in the future.
Colwell recognized there is still much work to be done but said he is very confident that the due diligence he and his partners have had during the process will pay off. Although the plan is for both the CTR and Alger facilities to begin operating collectively that is subject to CEC permitting.
Staff Writer Edwin Delgado can be reached at firstname.lastname@example.org