The Western Governors' Association, Chaired by Colorado Governor Polis, has spearheaded an initiative focused on geothermal technologies, culminating in the publication of the report: The Heat Beneath Our Feet. This report recognizes the vast potential of geothermal in the West, both for power generation and heat and cooling. This initiative involved rigorous stakeholder engagement which identified barriers to rapid geothermal expansion and deployment, and the report outlines vital policy recommendations to address these.  

Bryant Jones, Executive Director of Geothermal Rising comments: “decarbonizing residential and commercial buildings by using geothermal heating and cooling systems and geothermal heat pumps will significantly reduce carbon, save consumers money, create jobs, and improve public health. Hydrogen, direct air capture, lithium and critical mineral recovery, securing a stable and decarbonized electric grid, efficient and carbon-free air conditioning, and the push to electrify everything will only succeed with geothermal. It is exciting to see that Governor Polis and the WGA realize this fact.”

One vital recommendation in the WGA report is risk mitigation programs for geothermal well drilling and exploration. The United States created energy risk mitigation programs after the oil crises in the 1970s which resulted in significant growth for geothermal across the United States in the 1980s. The geothermal industry needs these programs restarted. Additionally, the WGA report recognizes the need for geothermal to be eligible for the same tax credits as other energy technologies such as deducting intangible drilling costs, defined as costs related to drilling that have no salvageable value, from the income tax of geothermal companies.

The WGA report also highlights the need for the geothermal permitting process to be streamlined on federal lands. Geothermal has the lowest lifecycle carbon footprint and the smallest environmental impact of all renewable energy technologies yet has more onerous federal permitting requirements even than that of oil and gas development. The WGA report recognizes this and recommends increasing Bureau of Land Management (BLM) staffing capacity to process geothermal permits, streamlining geothermal leasing, and granting a geothermal-specific categorical exclusion under NEPA for geothermal exploratory drilling on federal lands.

Demonstration and deployment funding is also recognized by the WGA report. Geothermal technologies are proven and have been cooling homes, heating schools, and generating electricity for decades in the United States. The geothermal industry needs deployment funding to commercialize and scale proven technology as well as demonstration funds to test new innovations.

About Geothermal Rising: Geothermal Rising (GR) is the largest and oldest geothermal non-profit organization in the world, founded in 1972. GR builds community and empowers the geothermal industry by aligning all geothermal heat source, direct use and power production applications. GR is the leading professional development and educational outreach resource for the geothermal industry. Find out more or join today:    https://www.geothermal.org/ 

Washington, DC, June 5-6, 2023 —  Geothermal Rising, the leading energy non-profit organization, launches its inaugural Geothermal Capitol Hill Day, along with co-hosts HEET, Project InnerSpace and the Texas Geothermal Energy Alliance, on June 5-6, 2023 at the historic Willard InterContinental Hotel, including Hill meetings with over 50 congressional offices from Vermont to Texas to California. This event reaches lawmakers in our nation’s capital to support geothermal energy policies and increase the familiarization of geothermal technologies that allow us to “Use the Earth to Save the Earth." Geothermal is a technology ready for primetime today and offers the United States clean and renewable energy options anywhere and everywhere.

“The potential of geothermal in the United States, and globally, is massive. As an industry, we are aware of this and have been yelling it from any rooftop we can find, however we also need to make sure we have pointed conversations with those making future renewable energy goals and setting the stage for societal resilience,” urges Kelly Blake, President of Geothermal Rising.

Through Geothermal Capitol Hill Day, key leaders and C-level executives from government agencies, think tanks, congressional offices, environmental and climate NGOs, universities, the media, and investors will hear and learn directly from the geothermal industry. The geothermal community has aligned to participate in curated plenary sessions, presentations, and networking events focused on sharing knowledge and promoting the needs of the geothermal industry to policymakers and decision makers in Washington, DC. Geothermal topics of discussion include:

• The DOE and Geothermal Energy,
• Why Climate and Environmental NGOs Support Geothermal,
• Needed Manufacturing & Workforce Development,
• Leveraging Existing Skills and Knowledge of the Oil and Gas Workforce, and
• Environmental Justice, Equity, and Community Engagement.

Geothermal Rising’s message of “Using the Earth to Save the Earth” benefits local communities and businesses to provide unlimited clean, reliable, renewable power that creates jobs and improves quality of life. Hill Day participants will learn how to leverage the naturally abundant geothermal energy source that’s safe, clean, and reliable and stable.

“The geothermal industry has the ability and passion to address the climate crisis, leverage the existing skills and knowledge of hydrocarbon workforce, and do so in a just and equitable way. Part of our mission at Geothermal Rising is to familiarize the public, the media, policy makers, think tanks, climate and environmental NGOs, students, and textbook publishers about geothermal technologies and applications,” said Bryant Jones, PhD, Executive Director of Geothermal Rising.

“Geothermal can decarbonize the built environment with heating and cooling technologies, produce green hydrogen, and generate clean and renewable electricity. This industry has the solutions, passion, and technical expertise to make this happen.”

Geothermal Hill Day sponsors are Calpine, Clean Air Task Force, ClearPath, Cryq Energy, Halliburton, Nabors, SLB, and Ormat.

On March 20, 2023, Geothermal Rising submitted letters to the House and Senate appropriations committees with recommendations for FY 2024 appropriations in support of the geothermal industry.  The recommendations were listed by government agency, and in some cases, by specific program.  In total, we requested just under $1.2 billion in appropriations, of which almost half would be in the form of types of financing (e.g., loan authority, venture capital) which could allow the government to recover (or exceed) its investment, and made other recommendations which could further unlock additional funds.   This summary organizes the different recommendations thematically.

Many of our requests do not seek additional appropriations for FY2024 and acknowledge that federal budgets will be tight this year. One option for the Congress can assist the geothermal industry using no additional appropriations includes releasing report language urging DOE’s new Office of Clean Energy Demonstrations (OCED) to specifically incorporate geothermal heat pumps, geothermal direct use (thermal energy networks), and geothermal power production into grant and demonstration programs using funds appropriated from the Infrastructure Investment and Jobs Act of 2021 and Inflation Reduction Act of 2022. Additionally, the Congress should strongly encourage DOE and OCED to incorporate geothermal resources into one of the hydrogen hubs.

There is a lack of recent data about federal incentives provided to each energy technology. We request the Congress update reports from the Congressional Research Service and Energy Information Administration that report on federal programs, subsidies, and other incentives received by all energy technologies from 1950 to 2022. This updated information will illustrate and underscore that energy policy is not technology agnostic in the United States.

Beginning with RD&D, we recommended that the Department of Energy’s (DOE) Geothermal Technologies Office (GTO) get $300 million for geothermal RD&D activities in FY 2024, an increase of $70 million from FY2023.  With respect to demonstration projects, we requested that OCED dedicate funding to geothermal projects from its existing $20 billion in appropriations.  In addition, one or more of the national labs should get $100 million to establish a public-private Geothermal Center of Excellence (GeoExcel).  Finally, we asked that DOE allocate $36 million to a geothermal Public Private Partnership Venture Capital fund.

On the development side, our largest single appropriations request was for a total of $500 million in loan authority for DOE to use for risk mitigation programs for district cooling/heating and electricity drilling, exploration, and deployment projects. Following a model used successfully in other countries, one objective would be to provide loans for exploration which are converted to grants in the event that the exploration is unsuccessful.  At the Department of the Interior (DOI), we seek to speed up permitting by spending $15 million to create a National Center to Review Geothermal Permit Applications. 

With respect to market development, we recommended that DOE’s Office of Manufacturing and Energy Supply Chains (MESC) get $100 million to secure the domestic supply chain for Organic Rankine Cycle (ORC) or turbine manufacturing.  DOE’s Building Technologies Office (BTO) would get $50 million to promote the deployment of geothermal (ground source) heat pumps. We also requested $12 million for DOE’s Office of Fossil Energy and Carbon Management (FECM) to provide grants to repurpose oil and gas assets such as abandoned wells. We also requested $10 million in loan authority for the U.S. Export-Import Bank to support export of geothermal products and services.

As a consumer of energy, we recommended that the Department of Defense get $20 million for geothermal power and cooling/heating projects on military installations across the United States and abroad.  Other agencies would get grant programs to support project development and procurement by non-governmental entities: $15 million at the Department of Agriculture to transition agricultural and industrial cool/heat applications to geothermal resources; $10 million at the Department of Commerce Economic Development Administration to support partnerships with municipalities, electric or energy cooperatives, community choice aggregators, and public utilities; and $5 million at the Bureau of Indian Affairs for development by tribal nations. 

Finally, there were some requests focused on education and communication.  To support student education on geothermal power, we requested that the Department of Education receive $9 million for technical and vocational programs in community colleges.  And for improved public knowledge of the history and applications of geothermal power, the Smithsonian Institution should receive $3 million for exhibits across multiple museums.

Overall, these appropriations requests sought to address all stages of the geothermal industry’s expansion needs, and to provide innovative mechanisms by which the government could obtain direct value from our successes.

Our busy office had several staffers regularly looking for funding opportunities including a project manager that brought me a file and said that his project owner had just inquired about a 30% federal tax credit for his new home geothermal heating and cooling system. I laughed and said that I would eat my hat the day the federal government pulled off any such tax credits for the geothermal heat pump industry. Our project manager persisted, so I said that if you would bring we written proof that there was such a program, I would listen.

The next day, he brought me the proof and I was amazed! We had no idea at the time how it would change our business operations over the next 14 years. Through a charmed sequence of events since then, Egg Geo went through a metamorphosis that propelled us into nationwide and worldwide operations that include education, code writing, consulting engineering, advocacy, legislative development, and the writing of two geothermal engineering textbooks for McGraw-Hill education. Here we are with another round of impressive incentives coming from the Federal Government under the new IRA and ITC packages. Let’s delve into those.

The Inflation Reduction Act of 2022 (IRA) provides $369 billion for energy spending and climate change measures. It's interesting to note that this time, these provisions are intended to increase employment, and provide real and measurable support toward achieving a net zero nation by the year 2050.

Besides helping to ensure that the tradespeople that install our decarbonization measures receive a true living wage, the funding mechanisms allow not only for tax credits, they also direct payments of incentives to tax-exempt and government agencies in lieu of just a simple reduction of tax liability through credits. Additionally, the program provides funding for climate grants and assistance for technical education.

• The incentives have been increased for use of US made materials and heat pump equipment. Additionally, funding is available for siting facilities in economically-disadvantaged areas.
• Project funding is uncapped when the project meets the requirements for paying prevailing wages and employment of qualified trade apprentices.
• The investment recovery act provides energy tax credits that are for a longer term than those in the past. Previously, energy credits were authorized for a limited number of years and then received periodic extensions. The IRA provides for some short term extensions to many of the specific tax credits until 2025. The geothermal exchange systems are the exception, receiving full credits through 2034.
• There are many tax incentives included in the investment recovery act that allowed direct payments in lieu of tax credits for tax exempt and governmental organizations.
• Entities with low tax liability have the option to monetize these credits by transferring them to an entity with larger tax burdens, such as an Energy Services Company (ESCO).

There is particularly relevant verbiage that provides investment tax credits for ground-coupled & groundwater projects. Similar to solar power generation, energy storage, and combined heat and power, the IRA also includes incentives for nuclear power and hydrogen production. It's understood that these incentives primarily reduce the cost for Needs+1 applications that utilize hybrid fuel input.

This is a good segway into a little known resource that hit our radar in 2009, the Database of State Incentives for Renewables & Efficiency® (DSIRE) https://www.dsireusa.org/ DSIRE is the most comprehensive source of information on incentives and policies that support renewable energy and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University. The navigation is not entirely intuitive, so here’s a navigation video: https://youtu.be/__iCPPF8rcE

The IRA includes extensions for the investment tax credit (ITC) and for the production tax credit (PTC). Any projects that want to take advantage of these extensions must begin construction before January 1st, 2025, unless it's for geothermal exchange systems, which have been extended to January 1st, 2035. Geo exchange systems are low temperature, shallow exchange systems that serve building heat pumps and thermal energy networks. Because of the massive push toward distributed thermal energy, or Thermal Energy Networks (TENs), disadvantaged communities will have access to clean heating, cooling & domestic hot water (DHW) with a simple utility connection.

Thermal Energy Networks (TENs) are utility-scale infrastructure projects that connect multiple buildings into a shared network with sources of thermal energy like geothermal boreholes, surface water, and wastewater. Utilization of these energy networks seems to be the final frontier for community renewable energy systems. Because buildings are responsible for 40% of carbon emissions, the answer to eliminating those lies in distributing the thermal energy using hydronic pipelines through our cities and allowing energy and other utilities to maintain and bill for the services of these TENs.

The greenhouse gas reduction fund has been established with $27 billion to provide grants and technical assistance to dot-orgs, tribal governments, and other nonprofit organizations. Notably, $15 billion is set aside for financial and technical assistance to disadvantaged and low-income communities.

During the vetting. For the 2009 stimulus package, we were able to determine in practice that the tax credits applied to 100% of the new construction and retrofit costs involved in a geothermal upgrade to a facility or home. This included electrical, controls, pumping, piping, heat pump and chiller equipment, labor, permits and everything else with the exception of the forced air distribution system, or in other words the duct work. So far, it looks as though the IRA will be similar in its extent for incentives going forward.

Kristy Egg holds a Bachelor of Science degree in Public Health with two areas of focus: health science and epidemiology. Over the past decade Kristy studied and developed competency in the public health issues of opportunistic waterborne pathogens and biofilms in water systems, including Legionellosis. For the past two years she has dedicated most of her time to helping educate and bring about workable solutions for disadvantaged communities. Her strengths are research, Indoor Air Quality (IAQ), Ambient Air Quality (AAQ), & management of community projects, team cat herding, some balloon animals, and marketing. She can be reached at kristy@egggeo.com

Jay Egg is a geothermal consultant, and President of Egg Geo, LLC. He has co-authored two textbooks on geothermal HVAC systems published by McGraw-Hill Professional. He can be reached at jegg@egggeo.com

Initiatives promoting geothermal development passed both legislative chambers with bipartisan support and now only require Governor Michelle Lujan Grisham's signature to become law.

The Geothermal Resources Development Act (House Bill 365) would expand Energy, Minerals and Natural Resources Department duties to promote the geothermal industry through a series of grants and loans for public and private-sector projects around the state. It would also establish a state-funded geothermal “center of excellence” at the Institute of Mining and Technology in Socorro.

In addition to House Bill 365, New Mexico legislators also approved several new tax incentives aimed at the geothermal industry, including an offset on personal and corporate income taxes, tax reduction for geothermal electric facility construction costs, and a tax credit for purchase and installation of geothermal heat pumps.

To read more about it, please see this article from the Albuquerque Journal.

In 2013, the California Independent System Operator, the entity responsible for managing electricity for 80 percent of California’s power grid, published a chart that showed how energy flowed during a 24- hour spring day in California. The grid they created showed how energy needs increased throughout the day and into the evening, when people were awake and usage levels reached their peak. And, it showed the imbalance between peak energy demand and renewable energy production. When the results were put into a chart, the line looked an awful lot like a duck—hence the Duck Curve was born.

The Duck Curve showed—for the first time—that energy produced from solar power could help offset some of the conventional energy provided by utility companies. The result: cleaner, more sustainable energy that cost a lot less. But there was a catch. Solar could only fill a portion of this gap when the sun was shining, and it couldn’t help during peak evening hours. So, the Duck Curve problem was created.

This means if we can solve the Duck Curve problem through new sources of clean energy, we can have lower electric bills and reduce the negative environmental impact from fossil fuels. Utilizing new, sustainable energy sources means a future with less energy rationing and lower risk of the type of electrical grid breakdowns we’ve seen in California and Texas.

Solar energy isn’t the answer to the Duck Curve problem. Why? Because solar energy is only available during the day when the sun can provide power. This creates a problem. How can we find energy during times when solar energy isn’t available, like during nighttime and on cloudy days?

Without a doubt, geothermal energy is a big part of the solution.

Geothermal energy is energy from the earth. It’s natural, always available, and is our largest untapped natural resource. Geothermal energy comes from deep inside the earth’s core. It’s hot down there, and that energy can be used to power our world. In fact, people in Iceland are already using geothermal energy for 66% of their electricity.

Geothermal energy has many advantages:

• Geothermal energy can be used anywhere in the world.
• Geothermal is always on, regardless of weather conditions or time of day.
• Geothermal can be used for cooling, heating, and electricity.
• Geothermal power can ramp up or down to fill the gaps left by traditional electricity and solar power
• Most geothermal plants will produce nearly zero air emissions

Geothermal can help prevent electrical grid failures

Solar energy may have a duck curve problem, but it has its advantages, too. As does every renewable energy source. Solar energy is a renewable resource with low emissions and a low carbon footprint that can be generated in a wide variety of geographic locations. But no one resource can meet all of our energy needs.

Together we can solve the Duck Curve problem once and for all and build a sustainable energy future. Let’s harness the power and energy within the earth’s core to power our cities and factories. Let’s use the earth to save the earth.

Geothermal Rising
1121 L Street, Suite 700
Sacramento, CA 95814

March 2, 2022

Recommendations for Implementing Geothermal Demonstration Programs

This memo provides recommendations for implementation of geothermal demonstration programs within the U.S. Department of Energy (DOE).

Geothermal energy has the potential to provide massive amounts of clean electricity, heat, and storage. In its landmark GeoVision report, DOE described geothermal as an “always-on source of secure, reliable, and flexible domestic energy that can be utilized across industrial, commercial, and residential sectors.” By DOE’s estimate, geothermal could provide over 120 GW of clean, 24/7 electricity by 2050. Since GeoVision was published in 2019, geothermal innovators and DOE-supported projects are demonstrating a path to unlock these resources. With co-funded investment and strong policy support, the geothermal industry can unleash its full potential.

The Infrastructure Investment and Jobs Act (IIJA) of 2021 provides a unique opportunity to unlock the immense potential of geothermal energy. The IIJA includes several demonstration programs that are well suited to geothermal, including $84M for enhanced geothermal systems (EGS) and several programs under the new DOE Office of Clean Energy Demonstrations (OCED), including: regional hydrogen hubs; long-duration energy storage; clean heat for industrial applications; clean energy projects on current and former mine land; energy improvements in rural and remote areas; and upgrading the electric grid to ensure reliability and resilience.

The recommendations below are focused on supporting successful implementation of 1) the EGS Demonstration Program and 2) demonstration programs included in DOE’s OCED.

Enhanced Geothermal Systems (EGS) Demonstration Program

As DOE’s GeoVision report shows, EGS is a promising technology for deploying vast amounts of clean geothermal energy. To support geothermal’s growth, the IIJA included $84M for EGS demonstration projects from FY22 to FY25, as authorized by the Energy Act of 2020. The Energy Act directs DOE to fund four EGS demonstration projects for power production or direct use, utilizing diverse geologic settings and development techniques. Moreover, at least one project must be located east of the Mississippi River.

DOE should strive to issue its first funding opportunity before the end of FY22. To ensure a successful EGS Demonstration Program, DOE should focus on technological diversity, geographic diversity, use-case diversity, and a milestone-based approach. Each of these is explained in further detail below:

● Technological Diversity: DOE’s GeoVision report includes a broad but clear definition of EGS. Specifically, GeoVision defines EGS as unconventional geothermal resources that “contain heat similar to conventional hydrothermal resources but lack the necessary groundwater and/or rock characteristics to enable energy extraction without innovative subsurface engineering and transformation. Unconventional EGS resources can be found at any above-ambient temperature that supports energy conversion for a given end-use technology application.”

DOE’s definition of EGS is broad, allowing for a range of innovative subsurface technologies that can be applied to multiple use cases, including power generation and direct use. As such, DOE’s funding opportunities should follow the definition of EGS in the GeoVision report, applied across a diversity of geologic settings. This will ensure consistency across funding opportunities, provide clarity to potential applicants, and encourage a wide range of technologies to compete.

● Geographic Diversity: The Energy Act also requires demonstration projects to collectively demonstrate different geologic settings, such as hot sedimentary aquifers, layered geologic systems, supercritical systems, and basement rock systems. A mixture of geographic, geologic, and technical diversity can expand the scope of geothermal energy’s potential applications. To the extent possible, DOE should prioritize locations that demonstrate evidence of promising subsurface characterization.

● Use-Case Diversity: Geothermal has promising applications in power generation, direct use, thermal storage, clean heat for industry, and mineral recovery. The EGS Demonstration Program is authorized to fund projects in both power generation and direct use, so DOE’s funding opportunities should be written to be inclusive of all allowable use cases. The next section will explain how DOE can leverage other IIJA demonstration programs to fund promising geothermal projects with thermal storage and clean heat applications, among others.

● Milestone-Based Approach: DOE is explicitly authorized to utilize a milestone-based approach for the EGS Demonstration Program, as described in Section 9005 of the Energy Act. The Department should pursue this structure, while incorporating the best practices of the successful NASA COTS program, to the extent applicable. Section 9005 provides a clear framework for ensuring consistency, transparency, and accountability in funding opportunities. Crucially, the milestone-based approach includes specific “technical and financial milestones, including estimated project timelines and total costs.” By setting clear expectations, DOE can provide effective program management, mitigate risk, and maximize the impact of taxpayer resources.

DOE Office of Clean Energy Demonstrations (OCED)

In addition to the EGS Demonstration Program, the IIJA established a new DOE Office of Clean Energy Demonstrations (OCED) to support a wide range of clean energy technologies. The IIJA included several programs under OCED for which geothermal is both eligible and uniquely suited to compete, including:

● Regional Clean Hydrogen Hubs $8B ($1.6B for FY22, FY23, FY24, FY25, and FY26)

○ The IIJA includes $8B for DOE to fund at least four regional clean hydrogen hubs. The statute requires at least one project to demonstrate hydrogen production from renewable energy, which can include geothermal. The statute also requires diverse end-uses, including electric power, industrial, residential and commercial heating, and transportation. Geothermal could play a strong role in any of these end-use sectors, particularly residential and commercial heating.

● Energy Storage Demonstration Projects and Pilot Grant Program $355M ($88.75M for FY22, FY23, FY24, and FY25)

○ DOE is directed to fund three energy storage demonstration projects by Sep. 30, 2023 and establish a separate pilot grant program. Geothermal’s potential as a source of seasonal thermal storage makes it well suited to compete for funding under both programs.

● Long Duration Demonstration Initiative and Joint Program $150M ($37.5M for FY22, FY23, FY24, and FY25)

○ This is a joint program between DOE and the U.S. Department of Defense (DoD) to demonstrate long-duration storage technologies at DoD facilities and installations. DOE should ensure effective coordination with the Navy Geothermal Program Office, which is DoD’s lead agency for geothermal development.5

● Industrial Emission Demonstration Projects $500M ($100M for FY22 and FY23, $150M for FY24 and FY25)

○ This program is focused on demonstrating diverse technologies for reducing emissions in the industrial sector. Geothermal has significant potential as a source of clean heat to drive deep decarbonization of hard-to-abate heavy industrial sectors.

● Clean Energy Demonstration Program on Current and Former Mine Land $500M ($100M for FY22, FY23, FY24, FY25 and FY26)

○ Under this program, DOE is directed to fund not more than five clean energy demonstration projects on current and former mine land. Geothermal is explicitly included in the definition of “clean energy project” along with several other technologies.

● Energy Improvements in Rural And Remote Areas $1B ($200M for each FY22, FY23, FY24, FY25, and FY26)

○ The IIJA appropriates $1B over five years for OCED to support “energy improvements in rural and remote areas,” which can include generation resources, microgrids, and grid modernization, among others. Given geothermal’s significant production potential in rural and remote areas, the geothermal industry is well positioned to contribute to the program.

● Program Upgrading Our Electric Grid and Ensuring Reliability and Resiliency $5B ($1B for FY22, FY23, FY24, FY25, and FY26)

○ Under this program, DOE is directed to collaborate with the electric utility sector to demonstrate innovative grid reliability and resilience technologies. Given its capabilities as a firm and flexible resource, geothermal can play a key role.

The IIJA demonstration programs provide an unprecedented opportunity for geothermal. The $84M EGS Demonstration Program is an important foundation to de-risk and scale geothermal projects, while several programs under DOE’s OCED offer geothermal the opportunity to demonstrate its cross-cutting capabilities in energy storage, industrial decarbonization, rural development, and grid reliability. By prioritizing the above recommendations, DOE can help geothermal reach its full potential while maximizing the benefits of its IIJA demonstration programs.