This is an excerpt from EERE Network News, a weekly electronic newsletter.

June 16, 2010

DOE-Backed Project Will Demonstrate Innovative Geothermal Technology

As part of DOE's Geothermal Technologies Program, two geothermal companies, AltaRock Energy and Davenport Newberry, announced plans on June 8 to conduct a demonstration of Enhanced Geothermal Systems (EGS) technology at a site located near Bend, Oregon. The purpose of this project is to extract energy from an underground "hot spot" in the Earth's crust by creating an underground reservoir of water near the hot spot. The demonstration will take place on an existing federal lease located outside the Newberry National Volcanic Monument, about 30 miles south of Bend. The companies will seek to extract energy from the Newberry Volcano, a 500-square-mile dormant volcano with a magma chamber thought to lie only 1-3 miles below the surface. Backed by a recent DOE grant of $21.45 million in American Reinvestment and Recovery Act funds, as well as $22.36 million from the AltaRock-Davenport partnership, the project will also benefit from the research efforts of faculty and students at several universities, as well as scientists from DOE's Lawrence Berkeley National Laboratory and the U.S. Geological Survey. All project plans will be reviewed by DOE, the U.S. Bureau of Land Management, the U.S. Forest Service, and Oregon State officials, and the agencies will issue permits only when satisfied that the Newberry project complies with strict standards.

EGS is a process of extracting heat from the Earth by creating a subsurface fracture system and circulating water through these fractures using deep well bores. Creating an EGS reservoir requires improving the natural permeability of rock by injecting water into the rock at high pressures. Once the reservoir is formed, water pumped into deep injection wells is heated by contact with the rock and returns to the surface through production wells, similar to conventional geothermal systems. A 2007 study led by the Massachusetts Institute of Technology estimated that with suitable investments and improvements to existing technology, EGS could supply up to 10% of U.S. electricity needs within 50 years, at prices competitive with fossil-fuel fired generation but with very low greenhouse gas emissions. See the AltaRock Energy press release (PDF 146 KB) and fact sheet (PDF 199 KB), as well as the description of EGS technologies from DOE's Geothermal Technologies Program and a description of the Newberry Volcano from the U.S. Forest Service. Download Adobe Reader.

Meanwhile, a similar effort in Australia continues to hit setbacks on the road to creating a commercial EGS power plant. Geodynamics, Ltd. first started drilling wells for its EGS system in South Australia's Cooper Basin back in early 2003. The company suffered through many drilling problems at its "Habanero" wells, which were meant to power a 1-megawatt power plant. In April 2009, as the project neared completion, the Habanero 3 well experienced a blowout, which was ultimately attributed to hydrogen embrittlement of the high-strength steel used in the well. In April of this year, the company announced a new plan to drill a 3-mile-deep well at its nearby "Jolokia" site, then return to the Habanero site to drill two new wells that will be deeper than the now-abandoned existing wells. The company will then return to drilling at the Jolokia site. Geodynamics now hopes to begin producing power at the Habanero site by early 2012. See the Geodynamics press release (PDF 140 KB).