Recent RFP Experience and the Undervaluation of Geothermal Resources

Abstract

Recent renewable energy RFPs in California have resulted in relatively few new contracts for the geothermal industry. While geothermal energy projects enjoy operational and environmental attributes that variable generation technologies do not, procurement processes in California and elsewhere appear to undervalue or ignore these attributes. Concern in California with containing the cost of renewable energy resource compliance and meeting local congestion reliability challenges would appear to represent an opportunity for increased interest in geothermal projects. Unfortunately, the RFP process as it is currently executed does not capture the benefits that firm and flexible attributes geothermal resources can offer. This paper presents the potential demand for geothermal resources in California, provides recent RFP experiences and summarizes concerns with the RFP process in California and identifies the attributes of geothermal energy that should be included in future renewable resource evaluations.