Get Big Pivots

State dangles $5 million in grants for projects; hope remains in Steamboat; and a company reveals intriguing cost figures

 

The Colorado Energy Office has launched a grant program for geothermal that will deliver $5 million in funding in the first round, with at least one additional funding round next year.

Both public and private entities can apply. They include:

  • Single-structure geothermal that will be the primary source of heating and cooling for a group of residential buildings or a single multifamily or non-residential building;
  • Community district heating: constructing ground-source, water-source, or multi-source thermal systems that serve more than one building, such as exists on the campus of Colorado Mesa University in Grand Junction;
  • Geothermal electricity generation: Using geothermal energy to produce electricity or hydrogen or power direct-air-capture technology.

For specifics, see the CEO announcement.

Gov. Jared Polis, in his “Heat Beneath Our Feet” initiative, has professed hope that geothermal can become a significant player in Colorado’s energy transition. The simple evidence offers a far stronger economic case for building heating and cooling. Already, there are likely hundreds of buildings, some smaller and some very large, that use pipes and wells for heating. They range from the several of the dormitories and other buildings at Grand Junction to individual homes in Eagle County and Arvada’s Geos project.

In Steamboat Springs, there’s hope that geothermal can be deployed to heat and cool – yes, even Steamboat gets hot enough for air conditioning – at the 534-acre Brown Ranch, a lovely expanse of grasses located west of the city. It has been identified as the site for a future affordability housing project.

That hope was given a boost of confidence in the November election when city residents approved a ballot question that allocates 75% of the city’s short-term rental tax revenues to the Yampa Valley Housing authority through 2040. The purpose, explained the Steamboat Pilot & Today, is funding the Brown Ranch project.

That project, though, has many more hoops to jump through. The Yampa Valley Sustainability Council has been pushing the idea of geothermal.

Sarah Jewett, Fervo Energy

Sarah Jewett makes the case for geothermal electrical production at the Colorado Rural Electric Association annual conference. in October. Top, the Brown Ranch west of Steamboat Springs during  August Photos/Allen Best

But what about producing electricity from geothermal? That is what Polis was talking about during his year as chair of the Western Governors Association. And it’s already happening near the geysers of northern California and some other places

In Colorado someday? There’s been a lot of talk in the last 15 years, most of it focused on the hot springs areas near Buena Vista of the upper Arkansas Valley. So far, there’s virtually nothing to show for it.

Colorado has better subterranean heat than, say Iowa or Georgia. Most of the West does. But the best of the West lies in Nevada. And other points farther west of Colorado.

Some of those who have studied geothermal scoff at the prospects of it being a material answer for that nagging unanswered question: How do we guarantee electricity (and at affordable prices) as we move beyond 85 and 90% emission-free? Can we do it without natural gas or some other problematic technology. Think nuclear.

One company doing projects in Utah and Nevada reports bending the cost curve down at least low enough to meet the needs of California utilities beset by the duck-curve of solar generation.

Sarah Jewett, vice president for strategy at Fervo Energy, told about reducing the time to drill wells, of lowering costs. She painted a rosy picture, a bright future. That’s her job, right?

Still, some people with experience in the economics of natural resources found her numbers compelling.

This is one of her passages:

“The market for geothermal power is about $65 to $85 a megawatt hour. We’re finding that these projects can easily fit into that cost structure. Now we are finding there is a higher willingness to pay coming out of California because they’re in a little bit of dire straits, but we envision a world where we’re able to easily sell these projects $65 to $85 a megawatt hour.”

She talked about the subsurface development, which is responsible for about 50% of the cost, and the above-ground development costs behind the other half. These costs of subsurface work have been bending down, and her company thinks cost reductions can also be delivered above ground.

Her bottom line?

“We’re picturing a world in which $65 to $85 a megawatt-hour is no longer really the standard for geothermal energy, but we can get to a point that’s actually lower than that by eliminating CapEx (capital expenditure) off of both sides (above and below ground).”

Allen Best
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