Is Geothermal Competitive in an Era of Low Cost Renewables?


 Guest Editorial written by Kevin Wallace, POWER Engineers

News on power purchase rates of 40-50 $/MWh for new solar-PV plants begs the question – can geothermal be competitive, with prices challenging for any but the   largest of geothermal projects? We feel geothermal still has a valuable role in the energy portfolio, if the wider benefits are considered.

The value to the grid of stable, baseload power with some ramping capability is generally not considered in auctions that are judged merely on costs per MWh. As system operators experience higher penetrations of intermittent resources such as solar (resulting in the infamous ‘duck curve’), simplistic pricing methods cause distortions in the true cost of grid operations. When pricing shifts to accurately reflect system integration costs, the value of having geothermal in the energy mix will be increased.

Geothermal resources can be used for broader benefits in ways that intermittent solar and wind cannot. In regions reliant on imported fuels or scarce biomass for heating, such as in Europe or the Andes, combined heat and power plants can provide communities with more energy independence. Reliable geothermal projects can provide multiple benefit streams over decades: power, district heating, aquaculture, balneology, or thermal uses for industry clustered in ‘resource parks’. Baseload geothermal power can also be coupled with energy-intensive products such as desalinization, battery storage or fuel synthesis to produce multiple product streams, with production increased at off-peak times.

The continued competitiveness of geothermal will depend on a more accurate accounting for the values baseload plants bring to the grid, and require continued creativity in order to comprehensively integrate geothermal benefits into communities.

Meet Kevin Wallace at GEOLAC 2017, where he will be a featured speaker on the topic of geothermal in a low-cost renewables environment. More information on  GEOLAC 2017 can be found here.