Geothermal Power Markets

The most recent California Energy Commission staff report on statewide electricity demand forecast peak consumption ranging from a low of 60,640 megawatts (MW) to a high of 61,528 megawatts for 2008, compared with 56,435 MW consumed in 2004. This was forecast to increase to a low of 66,656 and a high of 69,473 MW by 2016.

Meantime, California’s Energy Action Plan II placed increasing emphasis on electrical generation from renewable resources such as geothermal, wind and solar. In 2004, 10.2% of California’s electric energy generation came from renewable resources and 4.8% of that came from geothermal power plants. In 2005, California’s installed geothermal capacity of 2,492 MW exceeded that of every country in the world. And, the most prolific producer is The Geysers Geothermal Field in Northern California, with a current capacity of 900 MW.

The growing market for renewable power is driven by California’s legislated Renewables Portfolio Standard Program (RPS) that requires a retail seller of electricity to purchase at least 20% of that electricity from renewable energy resources by the year 2010. The State government is actively considering increasing the RPS percentage to 33% by 2020. California needs to add 20,000 to 30,000 gigawatt hours (GWh) of new renewable electricity to meet the 2010 target and likely will need to add an additional 40,000-50,000 GWh to meet a goal of 33% by 2020.

Western GeoPower’s Unit 1 project at The Geysers is well positioned to benefit from this combination of increasing electrical demand in the huge California market, legislated requirements for renewable power production, and location in a geothermal field with the highest net geothermal generation capacity in the world.