Finance: Find Out How Combined Energy and Capacity Values of Geothermal Energy Significantly Exceeded the Value of Solar Photovoltaic Resources in California

Geothermal 2.0: Superior Value + Operational Flexibility = New Contracts

by Paul Thomsen, (GRC Member) Executive Director, Government and Regulatory Affairs, Ormat Technologies

The GRC Bulletin - Free to Download

In 2017, for the first time, the combined energy and capacity values of geothermal energy significantly exceeded the value of solar photovoltaic (PV) resources in California.

In the first quarter of 2017, geothermal’s wholesale energy value in southern California was $13.50/MWh greater than solar PV. At the same time, utility estimates of marginal solar PV capacity ratings for the 2018 Resource Adequacy (RA) compliance period were between nearly 0 percent and 20 percent, resulting in a capacity value difference of up to $18.50/MWh between geothermal and solar PV.

Today in California, geothermal has a combined energy and capacity value of $32/MWh higher than solar PV using very conservative assumptions. When you account for geothermal’s ancillary services and operational flexibility, combined values climb to more than $40/MWh higher than solar PV. These calculations demonstrate that geothermal can compete with solar PV on a net cost basis, even as PV costs continue to decline.

Wait…what? How can that be?

Read the rest of the article for free (Pages 34-37) in the current issue of the GRC Bulletin - the voice of the global geothermal energy community - provided by the Geothermal Resources Council (GRC).