Geothermal and Geoexchange Energy in Colorado

Geothermal and Geoexchange Energy in Colorado:Electricity, Heating and Cooling from Inside the Earth

November 2, 2011

1

DGS Renewables –Welcome and Series Recap

2

May 6, 2010 – Finding the Right Fuel Mix –The Colorado Clean Air-Clean Jobs Act and Other Developments

September 30, 2010 – Waste Not, Want Not: How Colorado Businesses Are Improving Efficiency and Reducing Consumption

December 1, 2010 – Forest Fuel: Woody Biomass Conversion and Related Carbon Sequestration Developments

May 4, 2011 – An In-depth Look at a Western Project - From Planning to Permitting

May 25, 2011 – Alternative Motor Fuels in Our Future - Air Quality and Economic Issues

July 8, 2011 – Sustainability in Action: Colorado Developments Featuring Gov. Bill Ritter

August 31, 2011 – Bringing Small Renewable Energy Projects to Ground – With an Eye Towards Hydropower

Complete Series Materials http://www.dgslaw.com/attorneys/ReferenceDesk/RenewableSeminarSeries.htm

2

http://www.dgslaw.com/attorneys/ReferenceDesk/Renewable_

Welcome Today’s Speakers/Moderator

• Paul Bony, ClimateMaster

• Dr. Fred Henderson, PhD, Mt. Princeton Geothermal, LLC

• John H. (Hank) Held, Mt. Princeton Geothermal, LLC

• Zach Miller, Davis Graham & Stubbs LLP

• Ben Kass, Moderator – Davis Graham & Stubbs

33

DGS Renewable & Alternative Energy Seminar

Introduction to Geothermal Heat Pump Systems

ByPaul Bony

Director of Residential Market DevelopmentClimateMaster

November 2, 2011 4

Introduction to Geothermal

So, what is a GeoExchange (GX, geo thermal, ground source, ground coupled) heat pump system?

Why should consumers, business owners, investors, policy makers, and utilities care about them?

5

Buildings Dominate U.S. Energy Use and Carbon Emissions

with Heating, Cooling, and Water Heating being the Largest Contributors

Thermal Loads

Heating 9.2%

Cooling 4.3%

Hot Water 3.8%

Total 17.3%

~ 20% of all U.S. Carbon Emissions6

The sun stores almost half of the energy it delivers in ground.

Geothermal Energy (Green Heat)

7

The Earth is the Source of Heat in Winter…

Outdoor air design temperature:10°F in winter

72°F

60°F

Insulating layer of earth

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…and an Efficient Place to Reject Heat in Summer…

Outdoor air design temperature:100°F in summer

72°F

60°F


9

A geothermal heat pump is connected to a sealed water piping loop buried in the earth near the building

When the warm or cold water exiting the heat pump is pumped through the loop, it is naturally cooled or warmed by the earth surrounding it

60°F


…using Heat Pump Technology

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Heat Pumps Are All Around Us…

Air conditioners and air-source heat pumps transfer heat from inside houses to the air outside

Refrigerators transfer heat from food into the kitchen

HEAT

HEAT

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Simple Concept

Water moves energy better than air doesWater in the ground provides renewable energy

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Typical water-refrigerant Heat Exchanger used in most GSHP equipment

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Fundamental Operation – Refrigeration Cycle, Heating

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Fundamental Operation – Refrigeration Cycle, Cooling

1 kWh to power the system

3-5 kWh of geothermal energy moved from the earth

4-6 kWh heat

equivalent delivered

Geothermal Heat Pumps

400-600% Efficient 15


Conventional HVAC Geothermal HVAC

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14.6 In

9.5 Out

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COPs of 6+ are possible with advanced equipment18


The difference in the before and after system efficiency = carbon emissions savings.300,000 GSHP retrofits could equal the

carbon emissions of a 500 mW coal plant (which serves 500,000 homes!)

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Geothermal heat pumps produce the lowest carbon dioxide emissions, including all source effects, of all available space-conditioning technologies(EPA, 1993).A GeoExchange system saves more CO2

than an equivalent investment in solar PV.– Based on DMEA’s electric energy carbon load and

weather data.

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Geothermal Heat Pumpsare the Most Efficient way to Convert

Green Energy into Heating, Cooling and Water Heating

Making the most effective use of this precious resource

No carbon electricity = carbon free heating, cooling & water heating

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Mass market direct use geothermal technology

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GX Components

Unit– Flow Controller/pump kit– Hose Kit (package units)– Auxiliary (Electric or Gas) Heat ?

ThermostatLoop/water source

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Total Geothermal System

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Basics

Geothermal Heat Pumps are a Scalable Technology

1,300 Sq. Ft. Low Energy Habitat for Humanity Homes-

Oklahoma City

Alta Condos, Washington DC

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Types of GSHP Systems

Outdoor Split Indoor Split

Commercial Roof Top

Upflow & DownflowPackaged

Horizontal Packaged Console

Water-to-Water

Ground Source Heat Pumps Sizes and configurations for every application

Drilling* Pipe LoopInsertion Fusing

Piping LoopsReady forUnit

InstalledHeat Pump* or horizontal, or

surface water

Basics

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Vertical U-Bend with Grout

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Are a market proven technology.Cut total heating & cooling bills.Tap renewable solar energy from the earth.Can be “bolted” on to a gas heating system to

provide dispatchable renewable energy demand side management.

Have low power requirements that can be provided by zero carbon renewable sources!

Provide immediate positive cash flow with conventional financing!

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Geothermal For Utilities

Geothermal heat pumps offer utilities an excellent tool to:– Obtain significant peak load reduction – Improve load factor– Generate large carbon emission reductions– Meet efficiency, renewable energy and customer

satisfaction goals– With out putting pressure on electric rates (they can

make rates go down)

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The equipment keeps getting better– Unit efficiency is reaching 500%

Geo supports load control and peak time pricing managed by the smart grid– Can be added to a gas furnace for 100% load control– Can run on “low” speed or be cycled – New units will self report operating efficiency &

energy savings (a proxy for CO2)– Water to water units can support thermal storage to

move load to match intermittent generation 31


Clipping the Peak

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8

9

10

11

12

13

14

15

16

75 85 95 105

7.5 Ton 11 EER10 Ton 11 EER15 Ton 10.6 EER20 Ton 10 EER

Air Source

Air Source A/C Vs. Ground Source Efficiency

Outdoor Temperature

Energy EfficiencyEER

Ground Source – 14-15 EER

Air Source – 10-11 EER

Air Source – 9-10 EER

Air Source 8-9 EER

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Commercial HVAC System Efficiency

Chillers 1.8 Kw/tonRoof-Top Units 1.2 Kw/tonGSHP’s .9 Kw/ton

GSHP’s vs. Air Source System Efficiency 25% more efficient that packaged equipment50% more efficient than air cooled chillers

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Over 1.5 million geothermal heat pumps have been installed in the United States & Canada.

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http://www.nationsonline.org/oneworld/countries_usa.htm


GHPs were installed in 1 out of 38 new US homes in 2008(2.6% share)

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Geothermal Heat Pumps = Jobs

Activity # man days / homeHome Audit & system design 1Home Repair/weatherization 2Utility and loop Locates 0.25Loop Construction 2.5loop tie-in/landscape 0.5Geo system installation 4Back Office - supervision 0.75Other trades 0.25Manufacturing -transport - dist 0.5

Total 11.75

Assumptions 1880 man-days per year94 hours/home

20.0 homes/job5.00 jobs/100 homes 37

GSHP Residential Design Process

Manual “J” building load calculation– Number of heating degree hours– Number of cooling degree hours– Peak heating and cooling loads

GeoDesigner– Equipment sizing– Loop sizing– Customer economic analysis

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Geothermal Market Barriers

High(er) Cost of Installation (1/3- 2X more?)– Depends on the quality of comparison system– The Feds & States are pushing to require only

high quality products & installations– Not counting Federal tax credits & utility rebates

Misguided public policyLimited Consumer EducationLack of Long Term (affordable)

Financing39


Fed tax credits cover 1/3 of the cost of a residential Geo installation.Federal tax code covers 10% of

commercial Geo installations, plus provides accelerated depreciation (5 years) and efficient building tax credits.– covering, in many cases, over ½ the total

installation cost.– Paybacks under 3 years!

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Utility Geothermal Support

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The Wyandotte, Michigan City Council recently approved the creation of a geothermal utility. The general manager of Wyandotte Municipal Services said there are many reasons to be excited about the introduction of geothermal energy, including its heating and cooling efficiency, its affordability, because geothermal helps Wyandotte Municipal Services improve the operation of the electric system and reduce power supply costs, and benefits to the environment. (August 2010) 43

Demand Impacts

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

1 2 3 4 5 6 7 8 9 10 11 12

Max

kW

Month

Monthly Electric Peak Demand Comparison at Same Peak Time

Proposed EER 17.9 Baseline SEER 10

4 ton Geo vs. Conventional –Home Peaks – Denver Colorado

Avg. of 2.1kw savings

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Peak Demand Impacts

Source - Scientific American

Denver CO eQuest whole house

HVAC SystemPeak Time

1/2/10 19:002/5/10 20:003/30/10 18:004/26/10 18:005/31/10 18:006/30/10 18:007/26/10 18:008/16/10 18:009/2/10 18:00

10/16/10 18:0011/6/10 17:0012/8/10 19:00 45

Energy Impacts

5,086 increase in kWh (base is 14,511 kWh)

1,479 decrease in Therms on N Gas

147,900,000 Btu (N gas) * (40% heat rate) = 17,333 kWh generation possible with gas saved

= more kWh than the base case home was using!

46

But Colorado Efficiency Policy…

Penalizes Geo systems– Requires net decrease in kW demand (does not

specify Summer Peak)– But also requires 5% decrease in kWh sales

Ignoring the fact that Geo cuts expensive Summer peak demand and frees up enough N Gas to generate an entire home’s electric use! 47

The UK has it Right

Increasing renewable heat is key to the UK meeting its renewable energy targets, reducing carbon emissions, ensuring energy security and helping to build a low carbon economy.

It is for this reason that we are introducing the Renewable Heat Incentive, making renewable heat not just an environmentally sound decision, but also a financially attractive one. This support can help drive take-up of renewables now, stimulate the renewables industry, encourage further innovation and ultimately, bring down the cost of renewable heating. 48

Additional Resources

http://residential.climatemaster.comhttp://www.geo-exchange.cahttp://www.whoknowsthisstuff.com/Video-

Geothermal.htmlhttp://www.geoexchange.orghttp://www.igshpa.okstate.eduhttp://residential.climatemaster.com/

dealers_area/tools.49

Thank You For Your Attention!Questions?

Paul Bony

[email protected]

970-249-8476

If you ever need a hand you can reach me at:

50

Mt. Princeton Geothermal LLC

Geothermal Electrical Potentialand Issues for Colorado

Davis, Graham, & StubbsDenver, Colorado, 2 November, 2011

Frederick B. Henderson III, Ph.D., Chief Scientist;John “Hank” Held, Principal, Mt. Princeton Geothermal LLC


Definition: Emerging Geothermal State –

►A state with good geothermal energy potential and little or no production

►Focus on hydrothermal potential; EGS10+ years away

►State (Colorado) needs outside investment

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53

Colorado Preliminary Top 10 Hot Springs

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Colorado GT Electrical Developments► Mt. Princeton HS. Stage I geoscience & TG

drilling “done”. Drill ready; seeking Stage II reservoir tests funding.

► Poncha HS. Some geoscience done; TG completed September 2011. Drill ready

► Wanuta HS. Some geoscience done. BLM lease sale February 2012

► Raton Basin. Lots of geoscience done.

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Mt. Princeton Geothermal LLCGeneral Plan

► 2007-2010: Completed Stage I geological, and geophysical studies to target deep reservoir (~$1+ M

► Spring – Summer 2011: Stage II permitting and deep reservoir drilling (~$3-5 M) for proven prospect

► Mandatory for Stage III

► Fall 2012 – 2010: Stage III production and re-injection well permitting and drilling; surface plant permitting and development. (~$ 40 M) Could be complicated by BLM lease sale issues and legal delays

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METHODS PRESENTLY USED

Steam Rising

Injected Working Fluid57


58

Tentative Geothermal Gradient Contours

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Tentative Geothermal Gradient Contours

60


Next Steps Mt. Princeton, Poncha1. Magneto-telluric Deep Geophysics 2. Seeking support for deep reservoir test

for sustainable reservoir ID and tests3. Find GT developer for plant and

production4. Obtain final Federal, State and Local

Permits61


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63


POTENTIAL CHAFFEE COUNTY GEOTHERMAL ENERGY BENEFITS

• Mt. Princeton HS 10+ MW• Poncha Springs 7-10 MW • Cottonwood HS 5-10 MW• Hecla Junction ?

Total 22-30+ MW 64

65

COLORADO POTENTIAL

1/2 of 57 hot springs at 10 MW each ~300 MW or more

66


Primary Barrier to Colorado Hydrothermal Geothermal Development?

Attracting outside (?) Risk Investment for Stage II Deep Reservoir Confirmation Test Drilling

First stated to Geo in 2007

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Geothermal Risk Curve

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Geothermal Development Stages

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Mt. Princeton Geothermal LLCPrimary Barrier;

WHY?1. Weak Geothermal Industry: only 4

companies with funds to invest. Merging and investing only in US and Non US “elephant” country; not US Greenfields or “emerging states”.

2. Investment community funding only “proven” projects, not prospects

70


BARRIERS TO INVESTMENT AND DEVELOPMENT

►Mixed Federal, State, and Local Rules►Repetitive Permitting►Final Local 1041 Issues.►Colorado NOT Incentivized for outside

investment.

71


COLORADO GEOTHERMAL HOT SPRINGELECTRICAL ESTIMATE

Hot Springs in Colorado (57)

33% @ 10 MW = ~ 200 MW

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Davis Graham & Stubbs LLP | www.dgslaw.com

Zach Miller – PartnerDavis Graham & Stubbs LLP

November 2, 2011

7575

COMMON PERMITS AND APPROVALS REQUIRED FOR

GEOTHERMAL ENERGY PROJECTS


GEOTHERMALUNIQUE REGULATORY REQUIREMENTS

• Colorado Geothermal Resources Act• Federal Leasing and 2005 EPAct• BLM/USFS Programming EIS• Federal Underground Injection Control

Program

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COLORADO GEOTHERMALRESOURCES ACT

• C.R.S. § 37-90.5-102 (part of water rights statutes)

• Distinguishes “Wet” and “Dry” GT Resources

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COLORADO GEOTHERMALRESOURCES ACT (cont.)

• GT Resources Associated with “Geothermal Fluid” (Water, Brine, Steam) is a “Usufructrary” Right Only– Acquired by use in accordance with statute– Not an incident of ownership of attached land

• GT Resources from “Hot Dry Rock” (with no associated fluid) is an incident of ownership of overlying land

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COLORADO GEOTHERMALRESOURCES ACT (cont.)

• Need SEO Drilling Permit to construct GT exploration, production or reinjection well

• Need SEO Water Well Permit for water right for GT well

• Water Court Process and Criteria also apply, as modified (e.g., re injury) by Geothermal Resources Act

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SEO GEOTHERMALWELL REGULATIONS

• 2 CCR 402-10• Well Construction Standards• Contractor Requirements• Permit Criteria• “Material Injury” Standard: “Any Diminution

or Alteration of Quantity, Temperature orQuality” of an Existing Right PrecludesNew Right

• Extremely Strict and Limiting Standard

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BLM/USFS GEOTHERMAL PEIS

• Programmatic EIS on GT Leasing on Federal Lands in 12 Western States

• Final PEIS Issued in 2008• Governs Leasing, Mitigation and

Reclamation on Federal Lands• Unique Provisions for Terms, Royalty

Calculation, Etc.

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FEDERAL LEASING2005 ENERGY POLICY ACT

• EPAct Required Amended BLM Geothermal Leasing Rules

• Final BLM GT Leasing Rule – 5/2/0743 CFR Pt. 3000, 3100 and 3200

• DOI Lands and USDA Lands with USDA (USFS) Approval

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FEDERAL LEASING2005 ENERGY POLICY ACT (cont.)

• 2007 GT Lease Sales in Utah, Idaho, California, and Nevada

• Competitive, Non-Competitive, and “Direct” Leasing Available

• Primary Term: 10 YearsProduction Extension: Up to 35 Years

• MMS GT Valuation Rule– 30 CFR Pt. 202-218– Calculation of GT Royalties and Fees

• 2007-2011 and 1/2 Lease Sales in Nevada

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FEDERAL PERMITTING ANDAPPROVAL REQUIREMENTS

• NEPA – EIS or EA for “Major Federal Actions”– Federal Public Lands, 404 Permit, WAPA Interconnect– Evaluate Impacts, Alternatives, Mitigation– Public Participation / Comments– Potential Major Delays and Citizen Suits

• Bird / Wildlife Issues– Endangered Species Act

• Sec. 9: Shall not “Take” a Listed T&E Species• Sec. 7: Federal Agencies “consult” with U.S. Fish & Wildlife Service• Sec. 10: “Incidental Take” Permit

– Bald and Golden Eagle Protection Act– Migratory Bird Treaty Act

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(cont.)

• Historic Preservation Act– Triggered by “Federal Undertaking” (broad!)– Protect or Document Covered Resources– Beware of Native American Sacred Sites– Time Consuming Consultation Requirements – Potential Delays or Relocation

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(cont.)

• Section 404 – Clean Water Act– COE Permit for “Discharge of Fill Material”– Into Regulated “Waters of the U.S.”– “Jurisdictional Waters” Now Murky– Includes Wetlands, Streams, Ponds, Drainages– Can Trigger NEPA, Citizen Suits

• SPCC Plan under OPA– Spill Plan for ASTs for Oil– If AST > 1,320 Gallons

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UNDERGROUND INJECTIONCONTROL PROGRAM

• Safe Drinking Water Act Program• Regulates Underground Injection of

Regulated Fluids (including Water)• Class V (misc.) Wells in Colorado

Permitted by EPA• Covers UG Injection to Extract GT Energy• In Addition to SEO Drilling Permit• New Territory in Colorado

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FEDERAL PUBLICLAND CONCERNS

• BLM, USFS, National Grasslands• Triggers NEPA, NHPA and ESA / Sec. 7• Consistency with Forest and BLM Res.

Management Plans• Need for FLPMA Title V R-O-W or SUP• Use Restrictions or Delays• Potential Citizen Suits• Programmatic EISs

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OTHER STATE AND LOCALPERMITTING REQUIREMENTS

• County Conditional or Special Use Permits• Colorado Storm Water Permit (construction) – WQCD• Colorado Dust Control Permit (construction) – APCD• Colorado Highway Access and Encroachment Permit –

CDOT• Colorado Electrical Permit – State Electrical Board• Colorado Water Well Permit – (for Office, etc.) – SEO• Building Permits – County• Septic System Permit – County

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Contact

Zach Miller, [email protected]

Ben Kass, [email protected]

9090

mailto:[email protected]

mailto:[email protected]

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Geothermal and Geoexchange Energy in Colorado

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