At this year’s National Geothermal Summit on June 3, 2015, the Geothermal Energy Association honored Tom Edmunds and Pedro Sotorrio at Lawrence Livermore National Laboratory (LLNL) for innovative research that contributes to the geothermal industry’s understanding of future energy markets and showcases the benefits of geothermal within the broader context of renewable energy sources. The Energy Department’s Geothermal Technologies Office commissioned the study to explore economic incentives that would motivate geothermal plant operators to consider a more flexible geothermal energy supply.
Energy scientists predict that high penetration levels of intermittent wind and solar generation in the western United States will increase the uncertainty and variability in energy generation and its delivery to consumers. Geothermal power plant operators could help balance this variability and reduce uncertainty by operating plants in a more flexible mode to respond to sudden changes in energy use. In a new report, the Lawrence Livermore National Laboratory (LLNL) details how plant operators could financially benefit from providing more flexibility to the grid in the form of ancillary services.
The LLNL team found that if ancillary service prices increase significantly above current levels for a sufficient number of hours during the year, geothermal power plant operators could capture additional revenue by operating plants flexibly, to meet consumer demand. Energy prices in the year 2020 are expected to be significantly higher due to an aggressive 33% renewable portfolio standard in California and the retirement of over 2,000 MW of flexible generation capacity. Geothermal plant operators could step up to fill the gap left by this retired capacity, and those that secure flexible contracts would benefit from additional revenue streams. Ancillary services, for instance, could add 8% revenue annually under a flexible contract with an energy price of $70/MWh.