The views of geothermal development from a utility company standpoint are presented. The impediments associated with such developments as required reliability and identification of risks are discussed. The utility industry historically is not a risk-taking industry. Support of rapid geothermal development by the utility industry requires identification and elimination of risks or absorption of the risks by other agencies. Suggestions as to the identification and minimization of risks are made

Hinrichs, T. C.

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N75 2 0 8 6 4  
I. 
UTILITY COMPANY VIEWS O F  GEOTHERMAL DEVELOPMENT 
Thomas C. Hinrichs 
San Diego Gas & Electric Company 
San Diego, California 
The statement will emphasize views of geothermal development 
The impediments associated with from a utility company standpoint. 
such developments as  required reliability and identification of risks 
will be discussed. The utility industry historically is not a risk- 
taking industry. Support of rapid geothermal development by the 
utility industry requires identification and elimination of risks o r  
absorption of the risks by other agencies. 
identification and minimization of risks will be made. 
Suggestions as to the 
INTRODUCTION 
In most geothermal development projects, electric power generation 
utilizing the geothermal resource is  considered an electric utility; this utility 
will be involved in the project as the ultimate purchaser of electrical energy o r ,  
more likely, the purchaser of the geothermal fluids which will be utilized in the 
utility owned and operated generating plant. 
A utility may choose to participate in a project in the early exploration 
stages o r  wait until this phase is done by others and join a project at the time 
the reservoir capacity has been established. 
certain cr i ter ia  established prior to committing to the purchase of electrical 
energy from a generating plant o r  the construction of a generating plant 
utilizing a given resource. 
utility must have facts to actively develop a geothermal resource. 
areas  a r e :  
In both cases the utility will need 
There a r e  four major a reas  of concern on which a 
These four 
(1) 
(2) The need to have assurance of reservoir capacity. 
(3 )  
The need to have established reliability. 
The need to have assurance that the economics of a geothermal 
development are comparable to the utility's other alternatives. 
* existing power generation expansion plans. 
, 
* * +(4) The'need to integrate a geothermal development program into 
*.-? *, J 
Each of these a reas  will be discussed separately in the following. 
11. RELIABILITY 
The pr ime goal of an electrical utility i s  to provide reliable service to 
its customers. This goal is reflected throughout all of the equipment in the 
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utility's system. 
reliability record to fit into the overall goal of the utility. 
The power production facilities must  have an established 
In considering a geothermal development the reliability of the equipment 
will be of utmost concern to the utility participant in the development. 
ability concepts will not be accepted by the utility industry solely from engineer- 
ing feasibility studies. 
with the process will be desired prior to commitment by the utility to a process 
to be incorporated into its overall electric generating plans. 
Reli- 
Operational field testing on all hardware associated 
In the case of dry steam, operation at The Geysers has demonstrated 
reliability and should additional 6ry steam fields be found demonstration would 
not be necessary. 
of a pressurized hot water reservoir does need field demonstration for the 
utilities to seriously consider i t  in their overall generation plans. 
The reliability of equipment associated with the utilization 
111. RESERVOIR CAPACITY 
A utility will have to re ly  completely on the supplying reservoir for the 
"fuel supply" for a geothermal generating plant, 
any significant amount of funds on a gebtheismal project a utility will desire to 
have the risk associated with reservoig capacity defined and, if possible, 
eliminated. 
Therefore, prior to expending 
In locations remote from the utility's area of service reservoir capacity 
will have a significant effect on the economics of a project. The greater the 
distance that a reservoir is f rom the point of usage of the electric power the 
larger the assured capacity will have to be to support the electrical transmis- 
sion system. A general rule of thumb is that for every mile of transmission 
line required, two megawatts of reservoir capacity (for a 20 - 30 year period) 
will be necessary to support the construction of the transmission line. 
Data  developed in demonstrating reservoir capacity must withstand the 
independent review of competent firms in the reservoir assessment field. 
IV. ECONOMICS 
For  a utility to participate in a geothermal development project the 
overall cost  of electrical energy from that project to the point of the utility's 
utilization of that energy must be competitive with the utilityIs other alterna- 
tives. In the long te rm geothermal energy must be competitive with coal and 
nuclear generation facilities. In the short  t e rm there may be the opportunity 
for geothermal power generation to displace fuel oil in existing fossil fuel 
burning plants. 
only be less than the cost of the fuel oil being used in a fossil fuel plant. It 
must  be kept in mind that in order for a utility to take advantage of this type 
of displacement of fuel oil a sizeable financial investment will be required to 
install the generating facility if the utility itself i s  the owner of the power plant. 
With utility's vast requirement for capital this may require the developer to 
participate in the funding required for a geothermal plant to displace fuel oil 
in existing generating facilities. 
In this case the overall cost of the geothermal power need 
346 
V. EXISTING EXPANSION PLANS 
Most utilities have generation expansion plans that have facility commit- 
Nuclear powered 
Because of the long lead time require- 
ments for various types of generation for the next ten years. 
and coal-fired generating plants a r e  the baseload type of energy that utility 
companies a r e  planning for the future. 
ments associated with these types of facilities significant financial commitments 
a re  being made today for generation facilities that will be on the line in the 
80's. The lead time required to have a coal-fired plant on the line is  approxi- ' 
mately 7 to 8 years and a nuclear plant 9 to 10 years. Because of this the 
utilities do not have a great deal of flexibiGty to integrate into their expansion 
plans for the next 8 to 10 years any major emerging geothermal resource. 
This is  the case if a geothermal project i s  looked at as  one of supplying the 
capacity requirements for the expansion of the utility system. 
project can be considered a s  one that displaces existing fuel oil in plants 
presently on line the problem associated with integration into an expansion plan 
is not critical. 
If the geothermal 
VI. SUGGESTIONS ON GOVERNMENT PROGRAMS 
It has been stated that the goal of the government programs is to acceler- 
ate the development of geothermal energy. Therefore, the areas  that should be 
concentrated on a r e  establishing reliability, reservoir capacity assurance, and 
economic feasibility. It has also been stated that the government desires not 
to operate within a vacuum but to participate in the acceleration of the geo- 
thermal program with industry. 
The binary system of power generation appears to be a good selection 
A great deal of for the utilization of the pressurized hot water reservoirs.  
engineering has been done on this process and it appears that it will be 
economically feasible. 
facility to establish the necessary reliability of the process to enable its use to 
be considered for various pressurized hot water reservoirs.  
should assist industry in bringing this to fruition a s  quickly as possible. The 
technical areas  where research concentration is needed on the binary process 
is the pumping of the wells and the mitigation of the scaling and corrosion 
phenomena associated with the geothermal fluids. 
What needs to  be done now is to develop a field operating 
Government 
For  rapid development to occur on geothermal projects a high level of 
confidence in the reservoir capacity must be reached as quickly as possible. 
Present  reservoir engineering techniques rely heavily on production of the 
field to establish trends which will enable projections to be made of reservoir 
capacity. 
techniques so that years of operation a r e  not required to establish high levels 
of confidence in the reservoir capacity. 
ment participation with industry to aid in the acceleration of the geothermal 
program. 
Efforts should be concentrated on developing reservoir modeling 
This is  an a rea  that merits govern- 
Many new concepts for power generation utilizing geothermal fluids have 
been proposed. 
the geothermal resource, but a r e  still in the high r isk category. 
These may improve the efficiency and economics of utilizing 
This should 
347 
be supported by government activity to assist in the long range program of 
improving the overall economics of geothermal energy. 
As a general philosophy on the acceleration of commercial geothermal 
development, government participation can best  aid acceleration by providing 
the preliminary funding of a commercial project while the activities associ-  
ated with demonstrating reliability and reservoir capacity are proceeding, 
Normally a utility will not commit to a major development project until relia- 
bility and reservoir capacity have been demonstrated, This could take up to 
two years of operating time of a small scale test  facility. If it is assumed that 
the reliability and reservoir capacity will be demonstrated, the initiation of 
environmental assessment work and engineering on the major development can 
be carried out in parallel  with the small scale testing. 
assuming this r i sk  in the early portion of the major project, the utility can take 
over the funding at the instant that the r i sks  have been eliminated. As much as 
two years can be cut in the schedule for the major facility by this type of 
government participation. 
With government 
348 


Utility company views of geothermal development

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