Is Geothermal Getting Overlooked? It May Seem That Way, But We Don’t Think So.

Dec 03, 2008
Author: SCP Editor

December 3, 2008 – We thought we would publish this question, and our response, related to geothermal and the fact that it doesn’t get the same attention in the media and amongst investors that solar and wind seem to get:  

Question to Small Cap Pulse: Why is geothermal never mentioned when these folks speak of alt. energy options? Current administration has said they are behind Geothermal so folks should start to recognize and seek out those investments. Thanks. T

he reader referred us to an article “Alt-Energy Firms Sink with Prices, Credit.” Here is our response:  

There is a bias in the media regarding geothermal, which seems to get looked at as more akin to hydropower than the more 'sexy' wind and solar sectors, while biofuels (at least in the U.S.) have a black eye. The lack of mention has more to do with the fact that the authors of these essays are under-educated. This generalization rings true, in my opinion, when I read the article. Unfortunately, it probably echoes so much of the sentiment in the market, which is overlooking the massive support that alt energy (including geo) has at the state and federal level, not to mention the viability that alt energy increasingly has in the energy marketplace. All I can say is that we are currently in a remarkably unique environment where an alt energy revolution in the next decade has been pre-ordained by secular and legislative trends while none of the growth is getting priced in.  

To be sure, there are concerns about cap ex requirements in the near term against the backdrop of the current economic crisis, and it is up to companies on an individual basis to make it clear that they have the wherewithal to finance their business plans and execute.  Another reason geo hasn't had the same 'sex appeal' that wind and solar have had is the growth just hasn't been there in the same way that it has been with solar and wind. Case in point:  Here is the CAGR for nameplate capacity comparison:  

Compounded Annual Growth Rate (CAGR) (2000-2007)

·         Wind – 30.7%
·         Solar PV – 29.5%
·         Concentrated Solar Power – 2.4%
·         Biomass – 1.4%
·         Geothermal – 0.7% 

This has nothing to do with the viability of geo, and frankly, geo has more viability on scale at this point (baseload energy source) than wind and solar. But the growth has been much more dramatic in the past seven years with wind and solar, so predictably, it has gotten the attention. That being said, wind and solar are only just beginning to catch up to the contribution geo makes to the overall energy production/consumption pie here in the U.S.   

Renewable Energy Production Data (as of August 31, 2008)
Source: Energy Information Administration  

Since 2000, production of renewable energy has increased from 6.262 quadrillion Btu, or 8.7% of total energy production, to 6.805 quadrillion Btu in 2007, or 9.4% of total energy production, and an increase of .543 quadrillion Btu, or 8.6%. 

•               Biomass production has increased from 3.010 quadrillion Btu in 2000 to 3.589 quadrillion Btu in 2007, an increase of .579 quadrillion Btu, or 19%. Through August, 2008, production has increased 7.9% over the same period in 2007. Biomass currently represents about 5.1% of total energy production.  

•               Geothermal production has increased from .317 quadrillion Btu in 2000 to .353 quadrillion Btu in 2007, an increase of 0.036 quadrillion Btu, or 11.3%. Through August, 2008, production has decreased 0.8% over the same period in 2007. Geothermal currently represents about 0.4% of total energy production.  

•               Hydroelectric production has decreased from 2.811 quadrillion Btu in 2000 to 2.463 quadrillion Btu in 2007, a decrease of .348 quadrillion Btu, or 12.3%. Through August, 2008, production has increased 4.6% over the same period in 2007. Hydroelectric currently represents about 3.8% of total energy production.  

•               Solar production has increased from 0.066 quadrillion Btu in 2000 to 0.080 quadrillion Btu in 2007, an increase of 0.14 quadrillion Btu, or 21.2%. Through August, 2008, production has increased 3.7% over the same period in 2007. Solar currently represents about 0.1% of total energy production.  

•               Wind production has increased from 0.057 quadrillion Btu in 2000 to 0.319 quadrillion Btu in 2007, an increase of 0.262 quadrillion Btu, or 459%. Through August, 2008, production has increased 44% over the same period in 2007. Wind currently represents about 0.6% of total energy production.  

Renewable Energy Consumption Data (as of August 31, 2008)
Source: Energy Information Administration  

Since 2000, consumption of renewable energy has increased from 6.264 quadrillion Btu, or 6.3% of total energy consumption, to 6.835 quadrillion Btu in 2007, or 6.7% of total energy consumption, and an increase of .571 quadrillion Btu, or 9.1%.  

•               Biomass consumption has increased from 3.013 quadrillion Btu in 2000 to 3.620 quadrillion Btu in 2007, an increase of .607 quadrillion Btu, or 20.1%. Through August, 2008, consumption has increased 7.5% over the same period in 2007. Biomass currently represents about 3.7% of total energy consumption.  

•               Geothermal consumption has increased from 0.317 quadrillion Btu in 2000 to 0.353 quadrillion Btu in 2007, an increase of 0.036 quadrillion Btu, or 11.3%. Through August, 2008, consumption has decreased 0.8% over the same period in 2007. Geothermal currently represents about 0.3% of total energy consumption.  

•               Hydroelectric consumption has decreased from 2.811 quadrillion Btu in 2000 to 2.463 quadrillion Btu in 2007, a decrease of 0.348 quadrillion Btu, or 12.3%. Through August, 2008, consumption has increased 4.6% over the same period in 2007. Hydroelectric currently represents about 2.8% of total energy consumption.  

•               Solar consumption has increased from 0.66 quadrillion Btu in 2000 to 0.80 quadrillion Btu in 2007, an increase of 0.14 quadrillion Btu, or 21.2%. Through August, 2008, consumption has increased 3.7% over the same period in 2007. Solar currently represents about 0.08%of total energy consumption.  

•               Wind consumption has increased from 0.057 quadrillion Btu in 2000 to .319 quadrillion Btu in 2007, an increase of 0.262 quadrillion Btu, or 459%. Through August, 2008, consumption has increased 44% over the same period in 2007. Wind currently represents about 0.4% of total energy consumption. 

This is all probably way more than you wanted from me, but it happened to be data I am currently working through.....