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Cover Story | October 2017

Warming Up to the Idea

<span style="font-weight: bold;">Besides being a zero carbon emitting source of energy, costs of geothermal has significantly reduced over the years, making it an available option for India - one that the government too is contemplating.</span> <p></p> <p> Geothermal energy is a clean and sustainable alternative source of energy, wherein geothermal literally means heat from the earth. Resources of geothermal energy range from the moderate-to-low temperature hot spring systems to hot rock found a few miles beneath the earth's surface, and down even deeper to the extremely high temperatures of molten rocks. </p> <p>Geothermal energy can be located at various depths of the earth's crust, but the economically recoverable energy is confined to depths of three-four km. The recoverable heat energy is possible only from circulating hydrothermal fluids. Geothermal resources account for only a small part of the world's present day energy consumption.</p> <p>Geothermal power plants operated in at least 24 countries in 2010, and geothermal energy was used directly for heat in at least 78 countries. These countries currently have geothermal power plants with a total capacity of 10.7 GW, bu t 88 per cent of it is generated in just seven countries: the United States, the Philippines, Indonesia, Mexico, Italy, New Zealand, and Iceland. </p> <p>The most significant capacity increases since 2004 were seen in Iceland and Turkey. Both countries doubled their capacity. Iceland has the largest share of geothermal power contributing to electricity supply (25 per cent), followed by the Philippines (18 per cent).</p> <p>Currently, majority of India's energy needs are met by conventional sources of energy. But, the Government of India (GoI) has unveiled new renewable targets for 2022 (100 GW solar, 60 GW wind and 15 GW from biomass, geothermal, hydel, etc.); which coupled with a joint collaboration research project with Norway has opened the door for geothermal.</p> <p> <span style="font-weight: bold;">India prospects</span><br /> In India, exploration and study of geothermal fields started in 1970. The Geological Survey of India (GSI) has identified 350 geothermal energy locations in the country. The most promising of these is in Puga valley of Ladakh. The estimated potential for geothermal energy in India is about 10,000 MW.</p> <p>The country has huge potential to become a leading contributor in generating eco-friendly and cost effective geothermal power. Around 6.5 per cent of electricity generation in the world would be done with the help of geothermal energy and India would have to play a bigger role in the coming years in this direction. But, the power generation through geothermal resources is still in nascent stages in India. </p> <p>GSI has identified about 340 geothermal hot springs in the country. Most of them are in the low surface temperature range from 37oC-90oC which is suitable for direct heat applications. Some of the prominent geothermal resources include Puga Valley and Chhumathang in Jammu and Kashmir, Manikaran in Himachal Pradesh, Jalgaon in Maharashtra and Tapovan in Uttarakhand. A new location of geothermal power energy has also been found in Tattapani in Chhattisgarh. </p> <p>Puga, which is located at a distance of about 180 km from Leh in the Ladakh region of Jammu and Kashmir across the great Himalayan range, is considered to be a good potential of geothermal energy. In Puga valley, hot spring temperatures vary from 30oC to 84oC (boiling point at Puga) and discharge up to 300 liters /minute. A total of 34 boreholes ranging in depths from 28.5 m to 384.7 m have been drilled in Puga valley. Thermal manifestations comes in the form of hot springs, hot pools, sulphur condensates, borax evaporates with an aerial extent of four km. The hottest thermal spring shows a temperature of 84oC and the maximum discharge from a single spring is 5 liters /second.</p> <p>The thermal water from Chhumathang is quite similar to the thermal waters at Puga except the difference that its water has relatively higher pH and sulphate. Geothermal activity at Manikaran occurs in the form of hot springs over a distance of about 1.25 km on the right bank of Parvati river with a temperature range of 34oC-96oC, whereas on the left bank over a distance of about 450 m with a temperature range of 28oC-37oC.</p> <p>At Tapovan geothermal area, the highest temperature recorded is 65oC. The discharge from this spring varies between 0.83-9.2 litre/second. Similarly, Tattapani is a promising geothermal resource in Peninsular India. Thermal manifestation at Tattapani is very intense in an area of 0.05 sq km with several hot spots, hot water pools and marshy land. The surface manifestations show occurrence of white to dirty white deposits identified as silica and moderate to low sag activity. </p> <p>Sixty thermal water springs occur at 18 localities in the West Coast hot spring belt. One geothermal power project has a capacity of 25 MW. Himurja, Himachal Pradesh has decided to select some geothermal resources in Beas valley, Parvati valley, Satluj valley and Spiti valley in Himachal Pradesh for deep drilling up to two km for exploitation of geothermal energy.</p> <p> <span style="font-weight: bold;">Proposed facilitation </span><br /> Suitable land for development and maintenance of the project, is facilitated by state governments, who can be approached for allocation after ascertaining potential through geo-magnetic survey, exploration well, satellite database, etc. </p> <p>Financially, since 100 per cent FDI is allowed in the renewable sector, foreign entities are welcome for collaboration and technology transfer. GoI also provides 40 per cent depreciation for installation of heat pumps during the first year of installation, as they are categorized as energy saving devices under waste heat recovery equipment. In order to encourage geothermal projects in country, the Finance Ministry has been proposed for a revenue ruling in terms of import, excise relaxation &amp; tax benefits on equipment and machinery required for setting up of geothermal heat pumps and geothermal power generation projects. The level of funding will be decided on a case-to- case basis. </p> <p>Funding for projects which are found technically viable is done through National Clean Energy Funds (NCEF) with GoI financial incentives on case-to-case basis based on Committee under MNRE. The incentive will be provided through lead banks/FIs for offsetting loan portion at suitable interval after establishment of geothermal reservoir potential. The bids will be evaluated through reverse bid method in case competitive bid is not adhered to by concerned authorities.</p> <p>Furthermore, active participation by state governments is crucial in the planning and implementation of geothermal programmes and they would be asked to empower its existing State Nodal Agencies (SNA) to act as single nodal agency for development and promotion, including securing all necessary permissions required from various statutory authorities. </p> <p> <span style="font-weight: bold;">Pricing challenges</span><br /> Unlike traditional power plants that run on fuel that must be purchased over the life of the plant, geothermal power plants use a renewable resource that is not susceptible to price fluctuations. But, although the cost of generating geothermal has decreased by 25 per cent during the last two decades, exploration and drilling remain expensive and risky.</p> <p>New geothermal plants currently are generating electricity from $0.05-0.08/kwh. Once the capital costs have been recovered price of power can decrease below $0.05/kwh.</p> <p>Drilling costs alone account for as much as one-third to one-half to the total cost of a geothermal project. Locating the best resources can be difficult; and developers may drill many dry wells before they discover a viable resource. Because rocks in geothermal areas are usually extremely hard and hot, developers must frequently replace drilling equipment. Individual productive geothermal wells generally yield between 2 MW and 5 MW of electricity; each may cost from $1 million to $5 million to drill. A few highly productive wells are capable of producing 25 MW or more of electricity.</p> <p>However, all things taken into account, the price of geothermal is within range of other electricity choices available today when the costs of the lifetime of the plant are considered.</p> <p> <span style="font-weight: bold;">Advantages &amp; limitations</span><br /> The geothermal power plants have almost zero emission, with great potential as a clean, green and naturally occurring renewable source of energy. Geothermal hot water can be used for many applications that require heat including heating buildings, raising plants in greenhouses, drying crops, heating water at fish farms, and several industrial processes. It can be used for generating electricity as well. </p> <p>Geothermal has minimal land and freshwater requirements. Geothermal stations use 404 square meters per GWh versus 3,632 and 1,335 square meters for coal facilities and wind farms respectively. They use 20 litres of freshwater per MWh versus over 1000 litres per MWh for nuclear, coal, or oil.</p> <p>Geothermal power stations can also disrupt the natural cycles of geysers. For example, the Beowawe, Nevada geysers, which were uncapped geothermal wells, stopped erupting due to the development of the dual-flash station.</p> <p>Geothermal power requires no fuel; it is therefore immune to fuel cost fluctuations. However, capital costs tend to be high. Geothermal power is highly scalable: a small power station can supply a rural village, though initial capital costs can be high. It is therefore necessary to explore the possibility of setting up more geothermal power plants to use the naturally occurring renewable source of energy.</p> <p>But, though geothermal energy has several advantages, it also has certain disadvantages and limitations. If harnessed incorrectly, geothermal energy can sometime produce pollutants. Improper drilling into the earth can release hazardous minerals and gases from deep down inside the earth, which can be contained quite easily. It is also feared that the geothermal power plant sites may run out of steam in the long run.</p> <p>Geothermal power plants must be located near specific areas near a reservoir because it is not practical to transport steam or hot water over distances greater than two miles. Since many of the best geothermal resources are located in rural areas, developers may be limited by their ability to supply electricity to the grid. New power lines are expensive to construct and difficult to site. Many existing transmission lines are operating near capacity and may not be able to transmit electricity without significant upgrades. Consequently, any significant increase in the number of geothermal power plants will be limited by those plants ability to connect, upgrade or build new lines to access to the power grid and whether the grid is able to deliver additional power to the market.</p> <p> <span style="font-weight: bold;">Outlook</span><br /> The World Energy Council notes that energy sustainability relies on three pillars: energy security, energy equity (access and affordability), and environmental sustainability. The future of geothermal energy investment growth will depend on how well this technology and the associated regulatory framework can blend with these objectives. </p> <p>However, the biggest challenge going forward will be providing affordable energy and thus, the short and medium term outlook is quite different for OECD and developing countries. Over the last decade, the geothermal industry's centre-of-gravity has pivoted away from the USA towards Europe and Asia. Already many of the largest geothermal operators reside in the Asia-Pacific region. </p> <p> <span style="font-weight: bold;">Key Findings</span><br /> </p> <ul> <li>Geothermal energy contributes a tiny proportion of the world's primary energy consumption. Even in electricity generation, geothermal produces less than 1% of the world's output.</li> <li>There were 315 MW of new geothermal power capacity installed in 2015, raising the total capacity to 13.2 GW.</li> <li>Turkey accounted for half of the new global capacity additions, followed by the United States, Mexico, Kenya, Japan and Germany.</li> <li>In terms of direct use of geothermal heat, the countries with the largest utilisation that accounted for roughly 70% of direct geothermal in 2015 are China, Turkey, Iceland, Japan, Hungary, USA and New Zealand.</li> <li>In 2015, total power output totalled 75 TWh, the same number being also valid for total heat output from geothermal energy (excluding ground heat pumps).</li> <li>World geothermal heat use (direct &amp; storage) reached 563 PJs in 2014.</li> <li>Global investment in 2015 was $2 billion, a 23% setback from 2014. During the period 2010-2014, around $20 billion were invested in geothermal energy by 49 countries for both direct use and electric power.</li> <li>The pace of geothermal development has been conditioned by legal frameworks and particularly by conservation legislation. However, the pace of development might accelerate due to climate change concerns and increasing need to de-carbonise the energy sector.</li> <li>Geothermal energy currently finds itself burdened by a higher installed costs and longer development periods relative to solar and wind. As a result, in many countries, geothermal energy projects have been and are reliant on government incentives to compete against both natural gas and other renewable generation.</li></ul> <p><span style="font-style: italic;">Source: World Energy Council - World Energy Resources - Geothermal 2016</span></p> <p> <span style="font-weight: bold;">Geothermal Project in India </span><br /> Geothermal resources are present in seven provinces in India, however there is no geothermal power plant yet, but only a number of projects. One of the projects is the result of a recent collaboration between India and Norway in the north-western Himalayas. Two pilot demonstration projects investigating the utilisation of low and medium temperature geothermal resources for heating purposes, successfully improved the livelihood of the local population. </p> <p>The area has a very short supply of electricity of about 3 hours per day, and temperatures drop in the winter season to below 20¦C. In addition, natural resources such as wood are in short supply and people rely on fossil fuels like coal for heating their homes. </p> <p>The researchers assessed the resource potential and heat load for heating up a hotel and restaurant, and successfully managed to install heating systems that keep the indoor temperature at about 20<span class="st">°</span>C. Due to the shortage of electricity available, solar panels have been installed to make possible the continuous operation of the heat pumps. </p> <p>These kinds of projects play a key role in improving the life expectancy and overall standard of living of people living in areas characterised by fuel-poverty, relative isolation and geothermal resource potential11. At the country level, India announced plans to develop 10,000 MW of geothermal energy by 2030 in partnership with countries that are top producers of geothermal power generation: USA, Philippines, Mexico and New Zealand. </p> <p>There are already some sites in the country where geothermal energy is explored, namely Cambay Graben in Gujarat, Puga and Chhumathang in Jammu and Kashmir, Tattapani in Chhattisgarh, Manikaran in Himachal Pradesh, Ratnagiri in Maharashtra and Rajgir in Bihar. The plan is part of the government's pledge to increase the share of renewable power to 350 GW by 2030.<br /> Source: World Energy Council - World Energy Resources - Geothermal 2016</p> <p> <span style="font-weight: bold;">Geothermal Provides Energy the Grid Needs</span><br /> Base load, load-following, spinning and non-spinning reserve energy - geothermal provides numerous values to the grid that intermittent power sources cannot. Known to be a base load generation technology, advancements in geothermal production make it possible to provide ancillary and on-demand services, such as load-following or energy imbalance services, spinning reserves, non-spinning reserves, and replacement or supplemental reserves. This helps load serving entities avoid additional costs from purchasing and then balancing intermittent resources with storage or new transmission. Flexible projects are operating in three states with several more planned, based on demand.<span style="font-style: italic;"><br /> </span></p> <p><span style="font-style: italic;">Source: Geothermal Energy Association, USA</span></p> <p> <span style="font-weight: bold;">Geothermal Boosts Local and Regional Economies </span><br /> The local and regional economic benefits of geothermal power plants cannot be overstated. In some counties, it is the largest employer and often the largest taxpayer. Geothermal energy developments also pay more taxes than any other clean energy resource. </p> <p>Geothermal resources, generally developed in rural areas, can transform some of America's most economically disadvantaged areas into technology hubs, keeping communities healthy and families whole. The economic benefits of a typical 30 MW geothermal plant during its 30-year life cycle:</p> <ul> <li>$150-225 million inbound capital investment to build the plant (cost dependent on technology),</li> <li>Up to 50 long-term jobs to run it,</li> <li>Many supply chain companies each year to assist and supply plant operators,</li> <li>$9.5-16.5 million paid in property taxes to the state and county,</li> <li>$18-33 million paid in annual royalties to the land owner(s),</li> <li>Average construction period 2-4 years with a construction team of 100+ full-time jobs (FTE),</li> <li>Average geothermal worker operating the plant will earn about $70,000 per year,</li> <li>Millions in employee, employer, sales and other taxes paid to Federal and state governments,</li> <li>Social, environmental and economic justice in rural and disadvantaged areas.</li></ul> <p><span style="font-style: italic;">Source: Geothermal Energy Association, USA</span><br /> <br /> <span style="font-weight: bold;">- JOCELYN FERNANDES</span></p>
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