global geothermal news: october, page-9

A bank in trouble - I should point out

**************************************

Glitnir projects $29B U.S. geothermal energy sales
October 6, 2008 - Exclusive By Massie Santos Ballon, Cleantech Group


Iceland bank says enhanced geothermal technologies are being developed to reach untapped sources. Potential electricity sales from geothermal energy production in the United States could be as high as $29 billion a year, according to Alexander Richter, director of global geothermal energy department at Iceland’s Glitnir Bank.

Richter spoke to the Cleantech Group today about the release of Glitnir’s annual U.S. geothermal energy marketing report.

Glitnir, a leading geothermal investor in North America, noted that the United States leads the rest of the world in geothermal energy production, with 2,958 megawatts installed (see Glitnir pouring cash into geothermal). The Philippines is the second largest geothermal producer in the world.

“There is a value behind the U.S. geothermal industry, not just from a climate change perspective, but also from a purely business perspective,” Richter said.

Geothermal energy currently supplies only 0.4 percent of the current U.S. energy needs, but the untapped potential is huge, Glitner noted, citing reports recently released by Massachusetts Institute of Technology and the U.S. Geological Survey (see New USGS study pumps geothermal and MIT report says geothermal power not to be ignored).

Richter said developers need $15 billion to complete current U.S. projects. About half that cost is expected to be needed jointly in 2011 and 2012 when many installations start drilling, he said.

Richter said that recently identified untapped geothermal energy supplies have the potential for 10 times more energy than current installations, though it remains to be seen how much of the energy could be realistically accessed.

“The first pilot projects will have to show,” Richter said. “But the conventional geothermal has a lot to offer and in the shorter term of things.”

Conventional geothermal projects make use of hydrothermal energy that can be accessed five kilometers (3.1 miles) from the surface.

But enhanced geothermal technologies are being developed to reach the untapped geothermal resources identified in the MIT and USGS reports. Techniques being studied by the U.S. Department of Energy aim to go even deeper without increasing installation and operation costs. Those technologies also try to create geothermal reservoirs, stimulate production, and measure flow rates. Similar techniques are already being used for oil and gas fields.

Arni Magnusson, managing director of sustainable energy for Glitnir, acknowledged the current investment climate for geothermal isn’t ideal. The bank itself was nationalized by the Icelandic government, which claimed a 75 percent stake last week.

“[The financial crisis] is slowing things down, but we perceive great investment in two to three years and it’s a thriving industry,” Magnusson said.

Richter echoed Magnusson’s optimism: “The opportunities are so great they won’t go away. I think that’s the key message here.”

Several renewable energy industries, including geothermal, received extensions on investment tax credits from last week’s federal bailout of Wall Street.

“The extended tax credits mean that the uncertainty surrounding those is gone and it is now clearer that investing in renewables can pay off. I think this is the major element and will help geothermal energy to get investors interested in utilizing those tax credits,” Richter said.

“What it will mean exactly nobody can know in this finance climate.”