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Annual Geothermal Power Production And Development Report

April 2012 (Geothermal Energy Association)

Geothermal Resource Types and their Definitions

In reporting a project in development to the GEA, the developer of a geothermal resource is asked to indicate which of the following definitions the project falls under:

Conventional Hydrothermal (Unproduced Resource): the development of a geothermal resource where levels of geothermal reservoir temperature and reservoir flow capacity are naturally sufficient to produce electricity and where development of the geothermal reservoir has not previously occurred to the extent that it supported the operation of geothermal power plant(s). Such a project will be labeled as “CH Unproduced” in this report.

Conventional Hydrothermal (Produced Resource): the development of a geothermal resource where levels of geothermal reservoir temperature and reservoir flow capacity are naturally sufficient to produce electricity and where development of the geothermal reservoir has previously occurred to the extent that it currently supports or has supported the operation of geothermal power plant(s). Such a project will be labeled as “CH Produced” in this report.

Conventional Hydrothermal Expansion: the expansion of an existing geothermal power plant and its associated drilled area so as to increase the level of power that the power plant produces. Such a project will be labeled as “CH Expansion” in this report.

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Geothermal Energy and Hydrocarbon Coproduction: the utilization of produced fluids resulting from oil and/or gas-field development for the production of geothermal power. Such a project will be labeled as “Coproduction” in this report.

Geopressured Systems: the utilization of kinetic energy, hydrothermal energy, and energy produced from the associated gas resulting from geopressured gas development to produce geothermal electricity. Such projects will be labeled as “Geopressure” in this report.

Enhanced Geothermal Systems: the development of a geothermal system where the natural flow capacity of the system is not sufficient to support adequate power production but where hydraulic fracturing of the system can allow production at a commercial level. Such a project will be labeled as “EGS” in this report.

Tracking Projects through the Development Timeline

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In addition to defining their projects according the above list of definitions, developers also indicate to GEA their projects’ current status in the project development timeline using a four-phase system. This system captures how much, and what type of, work has been performed on that particular geothermal resource up until the present time. These four phases of project development are:

Phase I: Resource Procurement and Identification

Phase II: Resource Exploration and Confirmation

Phase III: Permitting and Initial Development

Phase IV: Resource Production and Power Plant Construction

Each of the four phases of project development is comprised of three separate sections, each of which contains phase sub-criteria. The three separate sections of sub criteria are resource development, transmission development, and external development (acquiring access to land, permitting, signing PPA’s and EPC contracts, securing a portion of project financing, etc.). For a project to be considered as being in any particular phase of development a combination of sub-criteria, specific to each individual project phase, must be met.

Planned Capacity Addition (PCA) and Resource Capacity

Finally, at each phase of a project’s development a geothermal developer has the opportunity to report two project capacity estimates: a Resource Capacity estimate and a Planned Capacity Addition (PCA) estimate. At each project phase the geothermal resource capacity estimate may be thought of as the megawatt (MW) value of the total recoverable energy of the subsurface geothermal resource. It should not be confused with the PCA estimate, which is defined as the portion of a geothermal resource that “the developer deems to be viable for the economic production of electricity under existing economic conditions.” In other words, if the developer were to utilize the geothermal resource under its control to produce electricity via a geothermal power plant, the PCA estimate would be the power plant’s estimated installed capacity. In the case of an expansion to a conventional hydrothermal geothermal plant, the PCA estimate would be the estimated capacity to be added to the plant’s current installed capacity.

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In each phase of development the resource and installed capacity estimates are given different titles that reflect the level of certainty of successful project completion. The different titles as they correspond to the separate phases are as follows:

Phase I: “Possible Resource Estimate” and “Possible PCA Estimate”

Phase II: “Possible Resource Estimate” and “Possible PCA Estimate”

Phase III: “Delineated Resource Estimate” and “Delineated PCA Estimate”

Phase IV: “Confirmed Resource Estimate” and “Confirmed PCA Estimate”

This section outlines how the Geothermal Reporting Terms and Definitions influence the reporting and presentation of project in development information in this report. For a detailed explanation of each phase of development and the outline of its sub-criteria please consult GEA’s Geothermal Reporting Terms and Definitions, available at http://geo-energy.org/pdf/NewGeothermalTermsandDefinitions_January2011.pdf.

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The US Geothermal Industry

The development of geothermal energy resources for utility-scale electricity production in the United States began in the 1960’s. Since that time, the continual development of geothermal resources and technology has positioned the US as a leader in the global geothermal industry. The US currently has approximately 3187 MW of installed geothermal capacity, more than any other country in the world.

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Installed Capacity

Geothermal companies continue to increase the development of geothermal resources in the US. In 2010 geothermal energy accounted for 3% of renewable energy-based electricity consumption in the United States.i While the majority of geothermal installed capacity in the US is concentrated in California and Nevada, geothermal power plants are also operating in Alaska, Hawaii, Idaho, Oregon, Utah, and Wyoming.

Due to the varying resource characteristics of different geothermal reservoirs, a variety of technologies are used to generate geothermal electricity in the US. Dry-steam power plants account for approximately 1585 MW (almost 50%) of installed geothermal capacity in the US, and are all located in California. Another sizeable portion of installed geothermal capacity in the US (~900 MW) is comprised of steam-flash power plants, the majority of which is also located in California. The implementation of binary geothermal technology has enabled the industry to develop lower temperature resources, which has expanded the geothermal industry’s geographical footprint beyond California, especially in the last decade.

The US geothermal industry’s trend of sustained steady growth continued in 2011 and the first quarter of 2012. In that period two geothermal power plants and three expansion projects to existing power plants were completed for a total of approximately 91 MW of newly installed capacity.

Geothermal capacity in 2011 and 2012 was installed by four different geothermal companies. In 2011 Ormat Technologies completed an 8 MW expansion project at its Puna power plant in Hawaii, and Terra-Gen Power also expanded production at its Beowawe power plant in Nevada with a 2 MW expansion. In the first quarter of 2012 Energy Source completed the development of its 49.9 MW Hudson Ranch 1 geothermal power plant in Imperial Valley, California. Ormat Technologies also brought its 18 MW Tuscarora geothermal power plant online in Elko County, Nevada in the first quarter of 2012. Lastly, U.S. Geothermal expanded electricity generation at its San Emidio resource that replaced old generating equipment at the site with a new 12.75 MW power plant. After subtracting the capacity of the old power plant replaced at U.S. Geothermal’s San Emidio site, the addition of these new power plants increase geothermal installed capacity levels in the US by approximately 85 MW to an overall total of 3187 MW.

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Capacity in Development

Geothermal companies increased installed capacity from 3102 MW to 3187 MW in 2011 and the first quarter of 2012. As the economy recovers and federal and state policy incentives driving investment in renewable energy resources remain in effect, the geothermal industry is expected to continue to bring geothermal capacity online in 2012 and subsequent years.

As advanced geothermal projects enter or near the construction phase of development, geothermal companies in the US are also acquiring and developing early stage geothermal resources. In 2012 the geothermal industry is developing 130 confirmed geothermal projects. When accounting for projects not confirmed (i.e. “unconfirmed”) by the developing companies this number increases to 147 projects. The geographic spread of confirmed geothermal projects alone is significant, with projects in various phases of project development located in 15 different states.

The number of developing geothermal projects reported to GEA in 2012 (130 projects) represents a slight increase from 2011 (123 projects). Beginning with the 2011 report, GEA allowed for the reporting of geothermal “prospects” by developers. The reporting of a prospect may occur when a geothermal developer has acquired access to a geothermal resource which has the potential for electricity production, but which has not yet met enough project criteria for the geothermal resource to be considered a Phase I project under the Geothermal Reporting Terms and Definitions (see Section 1). While not currently considered a geothermal “project,” a geothermal prospect has the potential to become so. At 163, the total number of confirmed geothermal projects and prospects is down slightly from those reported in 2011 (170 projects and prospects).

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The number of confirmed geothermal projects recorded in this report account for approximately 4116 - 4525 MW of geothermal resources in development, spread among 15 states in the western US. Including unconfirmed projects in resource development totals increases these levels to 4882 - 5366 MW.

Note that while a project’s resource capacity value provides an estimate of the amount of recoverable electricity (MW) from an underground reservoir, a project’s PCA estimate is the portion of that geothermal resource which a developer plans to develop for electricity production via a geothermal power plant (see Section 1 explaining the Geothermal Reporting Terms and Definitions used in this report). Currently, geothermal companies are developing 1779 - 1821 MW of confirmed PCA projects in the US. When accounting for unconfirmed projects, the range of PCA in development is approximately 1961 – 2023 MW. Of this, 949 – 956 MW are advanced-stage (Phase 3 – 4) geothermal projects.

While the majority of advanced-stage projects are currently located in Nevada and California, utility-scale projects are also nearing construction and production in Oregon, Utah, Idaho, and New Mexico. Smaller capacity projects (< 1 MW) are also nearing completion in Alaska and Wyoming.

The total amount of PCA and Resource Capacity (MW) in development in the US in respect to location and project status (phase) is outlined in Table 3 below.

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As the geographical reach of the geothermal industry expands, developers are increasingly exploring for and developing conventional hydrothermal geothermal resources in areas where little or no previous development has taken place. Of the 147 projects surveyed, 116 (approximately 80%) are developing conventional hydrothermal resources in “unproduced” areas (CH Unproduced) where the geothermal resource has not been developed to support electricity generation via a power plant. Additionally, 18 are developing conventional hydrothermal projects in “produced” (CH Produced) areas, and five are expansions to existing conventional hydrothermal power plants (CH Expansion). The remaining projects are five geothermal and hydrocarbon coproduction (Coproduction) and three enhanced geothermal systems (EGS) projects.

The exploration for and development of new resources, as well as the application of new technologies, has the potential to expand the geographic extent of the industry. Projects featuring the development of conventional hydrothermal resources as well as EGS pilot projects are increasing in the western US. At the same time, the potential to generate geothermal electricity from low-temperature fluids left over as a byproduct from oil and gas production is being explored through demonstration scale projects in states along the Gulf of Mexico and in North Dakota.

While the number of states with geothermal installed capacity and projects in development is significant, the reach of the geothermal industry is still more extensive. Companies offering various products, services, and expertise in both the industrial and service sectors are needed to support additional geothermal development. Vendors supporting the development of geothermal resources abound throughout the US as shown in Figure 10.

A variety of companies provide goods and services to geothermal projects in development from a number of states in the US. In 2012 companies developing geothermal resources have identified vendors in 39 different states (including the District of Columbia) supplying goods and services for the development of geothermal resources. This compares to 2011 when geothermal companies reported that vendors from 43 states were supplying goods and services to geothermal resource development.

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