Geothermal resources provide energy in the form of direct heat and electricity, totalling an estimated 805 PJ (223 TWh) in 2012.
Two-thirds of this output was delivered as direct heat, and the remaining one-third was delivered as electricity.
Geothermal direct use continued to increase globally during 2012. Direct use refers to direct thermal extraction for heating and cooling. A sub-category of direct use is the application of ground-source heat pumps (GHP), which use electricity to extract several units of thermal energy from the ground for every unit of electrical energy spent.
Although there are limited data available on recent growth in direct use of geothermal energy, output is known to have grown by an average of 10% annually from 2005 through 2010; much of that growth was attributed to ground-source heat pumps, which experienced an average annual growth of 20%. Assuming that these growth rates have persisted in the last two years, global geothermal heat capacity reached an estimated 66 GWth in 2012, delivering as much as 548 PJ of heat.
GHP represents the largest and historically fastest-growing segment of geothermal direct use. In 2012, it reached an estimated 50 GWth of capacity; this amounts to about three-quarters of estimated total geothermal heat capacity, and more than half of heat output (>300 PJ).i Of the remaining direct heat use (nearly half), the largest share goes to bathing and swimming applications, with smaller amounts for heating (primarily district heating), industrial purposes, aquaculture pond heating, agricultural drying, snow melting, and other uses.
At least 78 countries used direct geothermal heating in 2012The United States, China, Sweden, Germany, and Japan have the largest amounts of geothermal heating capacity, together accounting for about two-thirds of total global capacity.
China remains the presumptive leader in direct geothermal energy use (21 TWh in 2010), followed by the United States (18.8 TWh in 2012), Sweden (13.8 TWh in 2010), Turkey (10.2 TWh in 2010), Iceland (7.2 TWh in 2012), and Japan (7.1 TWh in 2010).5 Iceland, Sweden, Norway, New Zealand, and Denmark lead for average annual geothermal energy use per person.About 90% of Iceland’s total heating demand is derived from geothermal resources.
Heat pumps can generate heating or cooling and can be used in conjunction with combined heat and power (CHP) plants.8 Global installed heat pump capacity doubled between 2005 and 2010, and it appears that this growth has continued in subsequent years.In the EU, GHP capacity rose about 10% between 2010 and 2011, to a total of 14 GWth, led by Sweden (4.3 GWth), Germany (3 GWth), France (1.8 GWth), and Finland (1.4 GWth).10 Canada had more than 100,000 systems in operation by early 2013, and the United States is adding about 50,000 heat pumps per year.In 2012, Ball State University in Indiana installed the largest U.S. ground-source closed-loop district geothermal system to heat and cool 47 buildings.
Geothermal electricity generation, which occurs through kinetic conversion of high- or medium-temperature steam, is estimated to have reached at least 72 TWh in 2012.
Global geothermal electric generating capacity grew by an estimated 300 MW during 2012—with new capacity coming on line in the United States (147 MW), Indonesia (110 MW), Nicaragua (36 MW), and Kenya (7.5 MW)—bringing total global capacity to an estimated 11.7 GW.
The countries with the largest amounts of geothermal electric generating capacity are as follows: the United States (3.4 GW), the Philippines (1.9 GW), Indonesia (1.3 GW), Mexico (1.0 GW), Italy (0.9 GW), New Zealand (0.8 GW), Iceland (0.7 GW), and Japan (0.5 GW).
The United States added 147 MW of geothermal generating capacity in 2012, increasing total capacity by 5% to 3.4 GW. This represents the second highest increase in geothermal power capacity over a calendar year since the 2005 decision to extend the production tax credit (PTC) to cover geothermal projects.
Of particular note was the first facility to combine solar PV and geothermal generation at the Stillwater Geothermal Power Plant in Nevada. This hybrid plant was recognised for enhancing thermal efficiency, improving production stability, and reducing investment risk.18 By early 2013, the United States had 175 geothermal projects in development, representing more than 5.5 GW of potential, of which one-half might come to fruition in the coming decade.
Indonesia has not added much capacity in recent years, but added two 55 MW units at the Ulubelu station in 2012. The country also announced a huge push for a 1,000 MW geothermal energy investment programme with significant international backing. Indonesia initiated plans for a geothermal risk mitigation fund in 2011, which will provide loans to developers in an effort to jumpstart the industry. The country targets 12.6 GW of geothermal capacity by 2025, a significant step up from the current 1.3 GW. Meanwhile, a 165 MW project on Bali was cancelled in the face of sustained local opposition that was based on both environmental and religious concerns.
In late 2012, Nicaragua saw the completion of the second 36 MW phase of the San Jacinto-Tizate project, having completed phase one a year earlier. The 72 MW project is large enough to supply the equivalent of 17% of Nicaragua’s electricity needs.
In Kenya, the 2.5 MW Eburru wellhead plant was commissioned in early 2012, and a 5 MW modular wellhead unit came on line at a KenGen facility.26 Kenya is Africa’s largest producer of geothermal power, with total installed capacity of more than 200 MW by year’s end.27 By May 2013, Ormat Technologies announced commercial operation of a new 36 MW unit at the Olkaria III complex.28 The country is eyeing public-private partnerships to take on the development of an additional 560 MW at Olkaria in 140 MW increments.
Italy’s Enel Green Energy started operations in mid-2012 at its refurbished 17 MW Rancia 2 power plant in Tuscany.30 In addition, construction has commenced on the 40 MW Bagnore 4 power plant, also in Tuscany, at the projected cost of about USD 160 million (EUR 120 million), suggesting almost USD 4 million (EUR 3 million) per MW of capacity.
There is growing interest in Africa beyond Kenya to explore geothermal potential. For example, Rwanda has recently committed funds to commence drilling, starting on a path to harness some of its estimated 700 MW of geothermal potential. However, the high exploratory costs associated with geothermal power present a significant hurdle for African countries. To address this problem, the World Bank established the Global Geothermal Development Plan to manage the risk of exploratory drilling for developing countries. In collaboration with Iceland, the World Bank also formed a “Geothermal Compact” to support surface-exploration studies and technical assistance for countries in Africa’s Rift Valley.
The African Union Commission, the German Ministry for Economic Cooperation and Development (BMZ), and the EU-Africa Infrastructure Trust Fund have established a USD 66 million (EUR 50 million) Geothermal Risk Mitigation Facility for Eastern Africa (Ethiopia, Kenya, Rwanda, Tanzania, and Uganda) to support surface studies and exploration drilling. Eight projects have been short-listed following the first application round in late 2012.
Japan now has over 30 geothermal power projects under development. However, the country has recently seen local opposition to geothermal projects in national parks in Fukushima and Hokkaido, due in part to commercial concerns about impacts on local hot springs. Japan’s adoption of feed-in tariffs is expected to provide needed support for geothermal generation.
Aside from the capacity addition in Nicaragua, other news from Latin America includes El Salvador’s long-term plans for additional 90 MW of geothermal capacity and Chile’s completion of bids for exploration in various areas, with bidding companies committing USD 250 million.38 Several islands in the Caribbean have plans to begin or increase their use of geothermal power (including Nevis, Dominica, and the U.K. territory of Montserrat), and drilling was set to start in 2013 in Montserrat.39 Dominica signed a contract in 2012 for expanded drilling in hopes of completing a 10–15 MW plant by 2014.
A large number of GHP manufacturers operate in the United States and Europe, with most European companies based in the main markets. In Europe and the United States, there are two distinct classes of companies: general heating companies and electric heating specialists; and manufacturers of heat pump systems.
In the power sector, the five leading turbine manufacturers in terms of total capacity in operation are Mitsubishi (Japan), Toshiba (Japan), Fuji (Japan), Ansaldo/Tosi (Italy), and Ormat (Israel), which together account for well over 80% of capacity currently in operation around the world. In addition, several companies now manufacture small-scale geothermal power units that can be built offsite and then integrated into a plant’s design for production.
Technology continued to advance in the power sector during 2012. In the United States, a government-supported research project made progress on enhanced geothermal systems (EGS) technology, which extracts heat from engineered reservoirs through fluid injection and rock stimulation. The project demonstrated the equivalent of 5 MW of steam at The Geysers in California.45 In early 2013, AltaRock Energy announced that it had created multiple stimulation zones for a single wellbore at the Newberry EGS demonstration site. The potential benefit is a significant reduction in the cost of production from an EGS field.46 Finally, in April 2013, Ormat Technologies, the U.S. Department of Energy, and GeothermEx successfully produced an additional 1.7 MW from an existing field in Nevada using EGS technology. This is the first EGS system to be grid connected.
The year 2012 saw another first, with co-production of geothermal power at Nevada’s Florida Canyon gold mine.48 Another U.S. research project showed promise for extracting significant quantities of lithium from geothermal brine; the metal is a critical component in the lithium battery technology that is used extensively in electric vehicles.
In Iceland, Carbon Recycling International started operations at a groundbreaking plant that produces methanol by combining electrolytic hydrogen and carbon dioxide from a geothermal power plant. The product is a fully renewable fuel suitable for blending with gasoline.
Geothermal power projects take 5–7 years to develop from resource discovery to commercial development, and, as with oil and mining projects, the size of the resource is unconfirmed until drilling takes place. Long development times and the upfront risk and exploration often force geothermal companies to fund the work required to prove the resource. Tight capital and policy uncertainties in some countries, such as the United States, have made it challenging for developers to attract project funding. Moreover, no two project sites are the same, and each plant must be designed to project-specific conditions. Nonetheless, once the feasibility of a resource has been established, the probability of project success is better than 80%.