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The Values of Geothermal Energy October 2013 Geothermal power plants have minimal fuel costs. After the upfront capital investment for the well field construction, the operational costs of a geothermal power plant are nearly constant. As a result, the nominal flow of hot fluid can be circulated in the system even when only partial power is required. It does not affect operating costs to operate the plant at partial mode, as there is no cost for the unused geothermal fluid, or “fuel,” of a geothermal plant. Some geothermal power plants can ramp up and down multiple times per day to a minimum of 10% of nominal power and up to 100% of nominal output power. The normal ramp rate for a geothermal ORC turbine is 15% of nominal power per minute (by heat source valve). The ramp rate for dispatch in Flexible Operation Mode is 30% of nominal power per minute. A geothermal plant can operate as Real Power Regulation, allowing the geothermal plant to support the grid frequency during disturbance (up to ±5% of nominal frequency), thereby improving the ability of the utility system to ride through the disturbance.16 Ancillary Services, Integration, Transmission Costs As VER achieve higher levels of penetration in the Western electricity market, industry participants and regulatory agencies are recognizing the importance of quantifying integration and transmission costs associated with them. Failure to include these costs and the value of ancillary services results in an imprecise price per MWh comparison between energy technologies. The most common integration costs include those for transmission upgrades and ancillary services. These costs can vary depending on the type, penetration levels and supporting infrastructure of the resources that are selected to fulfill a power purchase agreement. An accurate cost comparison of renewable energy resources would include the total integration cost of each resource. Calculating the integration cost is a very complex task, and to date these calculations have not been completed in a satisfactory manner. The complexity does not come from an inability to model the power system or from an inability to calculate system costs with or without variable energy resources. Instead, the complexity comes from trying to establish what conditions to compare, as well as from the complex and numerous interactions between generation resources as their aggregate output is adjusted to maintain load balance.17 Power System operators need to find a way to effectively and fairly compare VER to geothermal power. Recently, in decision D. 11-04-030, the California Public Utilities Commission (CPUC) mandated that a “zero” adder for integration costs be used in evaluating bids in its 2011 RPS Solicitation. This hidden fee required to integrate a VER can cost millions of dollars to the ratepayer. When selecting renewable resource additions, regulators must recognize the costs associated with integrating resources into the electric system and the attributes these resources provide. Including an integration cost component that recognizes the ancillary service value provided by renewable energy resources is imperative to cost containment.18 Furthermore, geothermal power uses already existing transmission capacity efficiently because of its high capacity factors averaging 92%. Meanwhile, VER capacity factors average 20-34%.19 Therefore, a 100 MW VER needs to consume 100 MW of transmission even though the VER may seldom use the full 16 Ibid. 17 Milligan et al. 2011 18 Thomsen 2013 19 U.S. EIA 2013b 12PDF Image | Values of Geothermal Energy October 2013
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