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Renewable Power Development. Geothermal energy is a viable renewable power source with a moderate, stable price structure. The Department of Energy’s Geopowering the West program is pressing for geothermal energy to spread from four to at least nine States, including Oregon, where the Company is developing its Newberry Project.
Davenport currently is focused on the Newberry Geothermal Project at Newberry Volcano, near Bend, Oregon. This project is estimated to have the potential to produce several hundred megawatts of electricity.
Geothermal Projects under development |
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Davenport's Founder, Hiram A. Bingham, played a key management role in the development of 270 MW at Coso Hot Springs, California, owned by Caithness Energy, LLC.
At left, an artist's rendition of a geothermal plant generating power.
source: Geothermal Education Office, Tiburon, CA.
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Geothermal Energy Background
Geothermal power generation is a fully proven and reliable technology. The world’s first geothermal resource was developed near Pisa, Italy in 1903. It is still producing power, over a century later.
Geothermal technology taps the superheated water trapped in rock formations lying over a magma intrusion into the earth’s crust from below. This heat source is permanent. It heats the cycled water in the rock faults which is recharged by snow and rain and by reinjecting the recondensed steam after it leaves the turbines.
A single commercial well can produce from 3 to 20 MW of capacity. Each MW supplies the energy needs of approximately 1000 people. The 120 MW project will serve a population of 120,000 in northern California.
The world’s installed geothermal energy capacity is approximately 8,000 MW, of which about 3,000 MW are in the United States. California, Nevada, Utah, and Hawaii have operating plants, and new geothermal plants are under development in Idaho, Arizona, and Alaska. Newberry Volcano will be Oregon’s first geothermal power project.
Global environmental concerns and the volatile oil and gas markets have raised the requirement for domestic, renewable energy resources. The advantages of geothermal energy include improvement in air and water quality, reducing the trade imbalance, and avoidance of fuel price shocks and supply disruptions. Geothermal energy is a low profile, regional, continuous (base load) renewable power source, recycling the earth’s heat for decades, independent of weather conditions and fuel concerns.
Geothermal energy conforms to the principles of sustainable development and economic conservation of the global Kyoto Conference. Other forms of renewable energy include biomass, small hydro, solar, waste to energy and wind power. Unlike the others, geothermal is not affected by either weather or potentially volatile fuel sources. Geothermal is, however, dependent on drilling and resource availability, putting a premium on potentially large fields such as the Company’s Newberry project in central Oregon.
Technological Competition
Geothermal power can be a very cost effective new energy source over its project lifecycle. In California, for example, the 20 to 30 year-old geothermal plants produce some of the lowest cost power in the state. Operating expenses for geothermal plants, which require no fuel purchases, are typically in the very low range of 2 cents per kWh. This includes the steam expense in drilling wells and cleaning, maintaining and operating the well field. However drilling and testing wells prior to plant construction does increase the up front capital and debt financing costs of geothermal projects.
Geothermal power offers a moderate, predictable price range that is marginally higher than wind power. However, wind power averages only 30% availability, requiring the utility to fill in the remaining 70% of the time with fossil fuel or hydro power. |
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