Fgi-lemelson

The Foundation for Geothermal Innovation

Designing a Global Geothermal Challenge

“THE LEMELSON REPORT”

Designing a Global Geothermal Challenge This report is available on the internet at: www.geothermalinnovation.org/Lemelson and www.lemelson.org/geothermal Copyright Notice: The submitted manuscript has been authored as part of a contract with The Lemelson Foundation. Accordingly, the Lemelson Foundation retains a nonexclusive royalty free license to publish or reproduce the published form or allow others to do so.

© The Foundation for Geothermal Innovation All rights reserved. No part of this report may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the foundation. The Lemelson Foundation was founded with the mission and focus of “…spreading sustainable technologies that can create economic opportunity and improve lives in societies that can benefit from such advances. It also researches and disseminates information that highlights the role of invention in society.”

Acknowledgements This meeting and report were produced under a grant from the Lemelson Foundation. The Lemelson Foundation was created with the mission of “…spreading sustainable technologies that can create economic opportunity and improve lives in societies that can benefit from such advances. It also researches and disseminates information that highlights the role of invention in society” The role and scope of an incentive prize for geothermal innovation fits within this mandate. Without doubt, the most appreciated contribution was the dedication of a full day by the participants and observers. The geothermal industry is operating at a frenetic pace in 2009, and to have industry experts allocate a full day of their time is a testament to the level of support and belief the industry has to the need for a robust geothermal pump. Dr. Roland Horne of the Department of Geosciences at Stanford University was generous in allowing the Lemelson meeting to piggyback on the workshop, saving time and money for many of the participants. The Foundation for Geothermal Innovation wishes to thank Patrick Maloney of the Lemelson Foundation for arranging and administering the grant. Denis Hayes from the Bullitt Foundation mentored this concept through its initial formation in August, 2007. Funding for sketching out a geothermal incentive prize was provided by a modest grant from the Tagney Jones Foundation. They gave this journey its initial push. The Foundation for Geothermal Innovation is a 501 (c)3 registered in the State of California. The Foundation’s mission is to encourage innovation and accelerate the commercialization of geothermal energy.

Contents INTRODUCTION

01 Background

02

U.S. Geothermal Potential

08

Scope of Multi-Year RD&D Plan

18

TECHNOLOGY

21 Energy Diversity

21

Offset of Coal and Natural Gas

21

Offset of Nuclear

23

Offset of Foreign Oil

23

Contribution to Renewable Energy Portfolios

23

Environmental Benefits

24

Climate Change

24

Water Use & Water Quality

26

Program Challenges

31 Institutional Barriers

31

Access to Transmission Infrastructure

31

Lack of Available and Reliable Resource Information

31

High Exploration Risks and High Upfront Costs

32

Absence of National Policy

32

Siting, Leasing, and Permitting Issues

33

Resource Assessment and Data Needs

34

Education Workforce Development

36

Technical Plan

37 Enhanced Geothermal Systems Research, Development, and Demonstration

37

4.1.1 Site Selection

39

Technical Plan

37 Enhanced Geothermal Systems Research, Development, and Demonstration

37

4.1.1 Site Selection

39

Executive Summary The Foundation for Geothermal Innovation is in the process of developing a “Global Geothermal Challenge,” a large geothermal industry incentive prize focused on solving a discrete technical challenge while re-invigorating an industry that will be part of the planet’s long-term energy platform. Repeated government studies, as well as the seminal 2007 MIT study “the Future of Geothermal Energy,” identify the need for a robust downhole pumping system as the critical missing piece to the advancement of the geothermal category. To be launched in 2010, the prize will award its multi-million dollar prize purse to the teams that can meet specific targets for designing and building efficient and durable production-ready geothermal pumps. An additional powerful incentive to the competition will come in the form of Advance Market Commitments (AMCs) that will assure the sale of a large number of pumping systems for installation and deployment in existing hydrothermal systems and enhanced geothermal systems sites under development. The Department of Energy’s Geothermal Technology Program’s Multi-Year Research, Development & Development plan (“MYRD&D”) discusses the shortcoming of pumping systems; “downhole pumps capable of withstanding EGS (Enhanced Geothermal Systems) conditions while sustaining sufficient EGS flow rates do not yet exist”. And yet they set targets for such pumps; By 2015, improve the performance of downhole pumps, especially ESPs, to operate at temperatures of 275°C, mass flow rates up to 80 l/s, setting depths as great as 2 km for well bores 6 5/8 to 10 5/8 and operating at pressures up to 200bar. While the industry seeks a high temperature pump for the commercialization of EGS, the market demand for EGS alone is too little and too slow to warrant a commercialized pump. Fortunately, the near term hydrothermal demand is more than sufficient to warrant a commercialized pump and will account for 90% of pump sales over the next 15 to 20 years. Such pumps would be installed in existing hydrothermal sites, increasing yield. They would also serve as the core component for new hydrothermal systems and allow for the development of hydrothermal resources in the 190 to 220 C range. Analysis shows that if a pump was introduced in 2015, market demand by 2020 would approach 482 pumps per year or approximately $360 Million in annual pump sales alone. In new drill sites, each pump set represents US$ 15 Million in investment.

4

Areas

# of Pumps needed initially

# of Pumps to 2025

# of Pumps to 2050

U.S. Hydrothermal existing

1221 (known)

244

4577

U.S. Hydrothermal under development

9915

1,9826

6,49810

U.S. Hydrothermal Potential (WGA) near term

1,278

2,556

5,75110

U.S. Hydrothermal Potential (WGA) long-term

2,216

-0-

8,86211

U.S. EGS short-term8

10

206

257

U.S. EGS Long-term12

6,000

10013

21,00012

4,902

42,593

Total (pumps)

Technically, such a device is achievable in the 5 year time frame. Electric submersible pumps (ESPs) are just over a century old. To date the industry has not been focused on “temperature hardening” these submersible systems. Electric motors face significant deterioration of efficiency and longevity at elevated temperatures. However, advances in electronics and motors used in other sectors have largely overcome these challenges. What has not occurred is the integration of these advances into submersible pumps. On February 11th, 2009, a technical panel of geothermal industry experts was convened at the Stanford Faculty Club for a one day meeting to review and define the technical competition guidelines to create a next-generation downhole pumping system. This “Lemelson Meeting” was constructive in setting the technical parameters of the incentive prize as the prize target has now largely been defined. Some aspects, such as diameter and temperature targets, will continue to be debated through additional rounds of consultation with the industry and experts before the target is formally defined and launched with the prize. The primary guidelines that were determined are that the pumps must: • Be deployable through 13 3/8 inch (~34 cm), 72 pound casing • Be Capable of operating in 200 – 220°C (~395 - 437°F) geothermal fluids • Have a flow of at least 60 l/sec (~950 gpm) • Operate with at least 300 psi • Maintain 750 hydraulic horsepower • Operate reliably without failure for 3 years, and • Be able to operate at a variable rate of flow

5

While there are numerous technical challenges in the geothermal sector few are as well suited as a pumping system for an incentive prize. It is a discrete product that has one of the highest impacts on levelized cost for both hydrothermal and EGS geothermal power development projects. Prizes can deliver change, but they work best when addressing a well-defined problem. An industry report on prizes identified seven key areas where incentive prizes create a shift in thinking. All of these areas are of interest to geothermal: “downhole pumps capable of withstanding EGS conditions while sustaining sufficient EGS flow rates

• Identify excellence – competition often brings the best to the top. • Influence public perception – geothermal must overcome its position as the unknown renewable.

do not yet exist” U.S. DOE

• Focus a community – engineers, technologists, energy developers and policy analysts need to apply their skills and focus to geothermal. • Identify and mobilize new talent – the geothermal intelligentsia is retiring. New blood is needed. • Educate and improve skills – the motor itself is an integral part of the energy equation in our nation. It is time to bring engineers around to this larger challenge. • Mobilize capital – advanced market commitments for pumps will generate investment well beyond the capacity of a straightforward research grant. It is not enough to simply create a prize. It must be distinct, draw numerous competitors and have a strategy, implementation plan, and learning model. The plan and its implementation are more important than the prize purse itself. The near-term work is in creating the prize architecture; a prize platform with clear ground rules, respecting intellectual property, creating media awareness around competition and executing the project faithfully. Fortunately, a geothermal pumping system is well suited to a prize competition. The state of the geothermal industry, the technological challenge of a high-temperature, ESP pump, and its economic impact on reducing levelized cost all coalesce around the creation of a geothermal prize. Perhaps the biggest value of the day’s proceedings was the survival and strengthening of the prize concept as it made it through the gauntlet of geothermal experts in the room. Fortunately, while there are numerous technical challenges in the geothermal sector and across the renewable energy category, this challenge has the rare distinction of being well suited for a large incentive prize with a focus and drawing potential to motivate a wide spectrum of competitors to plunge themselves and millions of dollars of resources to charge after a very meaningful breakthrough with substantial global benefits.

6

GEOTHERMAL CHALLENGES > > > > > >

INTRODUCTION 01 RENEWABLE ENERGY ASSESMENT 02 Pumping System Requirements & Challenges 05 Pumping SysteMS TODAY 05 RESOURCE 05 NATIONAL  TRANSMISSION GRID & GEOTHERMAL SITES IN THE WESTERN U.S (AND HAWAI) 05 > MARKET SIZE BEYOND HYDROTHERMAL & EGS 05

7

INTRODUCTION In the global search for low carbon energy alternatives, geothermal power is often overlooked. Geothermal is considered a mature and demonstrated energy source by power engineers. Its history of development and research has been limited since commercialization began in 1904 in Larderello, Italy. The technical challenge has always been tapping hotter geothermal resources to extract the most energy. However, while geothermal resources reach 350°C pumps capable of delivering heat from depths are limited to 190°C. In fact, many attributes of geothermal energy, namely its widespread distribution, baseload dispatchability without storage, small footprint, and low emissions, are desirable for a sustainable energy future in the United States. While the current industry focus is on hydrothermal resources, the prospect of Enhanced Geothermal Systems (EGS) offers the greatest geothermal opportunity.

Source: SMU Geothermal Lab

Temperature differential is the key for effective power conversion – hence the quest for tapping higher temperature resources. Across the planet, resources exist everywhere, but their accessibility is a function of geology and depth of occurrence. As drilling depths increase, so do development costs, as well as the energy required to pump heat to the surface. Below the surface, the challenges are legion. Technically they have been well identified, but none of these challenges can be resolved without a pumping system to engage the geothermal reservoir. EGS cannot be commercialized without this pump.

8

As with any energy project, multiple factors affect the eventual cost of power. In the case of

The Benefits of ESP

geothermal, temperature and flow are the most important parameters. For geothermal, the

• D  epth (beyond the Line-shaft maximum of 600 meters)

analogy to wind power would compare wind speed and turbine size. The faster the wind and

• P ower (beyond the line-shaft maximum of 800Hp) • F low control – critical in stimulated reservoirs • M  inimizing fluid loss through pressure regime control • M  inimizing unscheduled seismicity by controlling pressure.

hotter the fluid and the higher the pumping rate, the greater the electrical power output. An bigger the blades, the more electrical power produced. With the wind industry, the goal has been bigger turbines in windier locations. However, with wind power, the source is both easier to identify and tap. Subsurface exploration, resource identification and delineation, subsequent development and management (all through a 13-inch borehole) are a key challenge and the focus of the art. And then there is pumping the heat to the surface for conversion into electricity. But among the technical challenges facing geothermal, the lack of a robust commercial electrical submersible pump (ESP) affects the industry the most and holds it back from viability on a large national and global scale. Availability of the pumping system directly affects the availability of a geothermal power plant. In terms of economics, high production rates are the key. The ultimate goal is the movement of heat. Unlike oil and gas reserves that can be banked, a non-producing geothermal well is a non-producing asset. As the depth to resource increases, the need for higher power to drive the heated fluid to the surface increases. Concomitantly the cost of deployment, retrieval and service also rises. Lower cost deployment and systems that can endure long service life are critical to higher availability time. ESPs can be deployed five to seven days quicker than lineshaft pumps. This is a savings of $17,000 to $23,000 per well. Mobilizing a drill crew and replacing a pump with today’s commercial offerings is a one-week proposition.

Evaluation A broader assessment of geothermal and the market opportunity were taken in order to support the design of an incentive prize. These questions undertook the theme of “Is a pump the most important technical need for geothermal, what about sensors?”, “What is the market demand for such a pump?” “Where would such systems be installed?” To that end several topics were review.

Source: SMU Geothermal Lab

9

Renewable Energy Assessment In considering geothermal (or any renewable energy) it is necessary to look at three components; namely, resource, technology and economics. This study is more limited and explores one technology - a pump and its impact on geothermal power development economics. For example, our acknowledgement and focus on the resource estimate is limited to temperature and depth, and how such a pump would affect the economics only for the purposes of developing economic estimates. Assessments and analysis by industry, the Department of Energy National Labs and academia have identified three broad technical areas that need to be resolved if EGS is to advance. While important, and currently the focus of major geothermal programs, they are not well suited for an incentive prize. They are 1) drilling, 2) power conversion and 3) reservoir technology. Within the category of reservoir technology are pumping systems, sensors, and the art of managing the well field. From the MIT Report: Drilling technology – both evolutionary improvements building on conventional approaches to drilling such as more robust drill bits, innovative casing methods, better cementing techniques... and new methods of rock penetration will lower production costs.  Power conversion technology – improving heat-transfer performance for lowertemperature fluids, and developing plant designs for higher resource temperatures to the supercritical water region would lead to an order of magnitude (or more) gain in both reservoir performance and heat-to power conversion efficiency.  Reservoir technology – increasing production flow rates by targeting specific zones for stimulation and improving downhole lift systems for higher temperatures … to improve heat-removal efficiencies in fractured rock systems, will lead to immediate cost reductions by increasing output per well and extending reservoir lifetimes.

Drilling Current oil and gas industry knowledge and success in drilling is not high enough to overcome the drilling challenges in geothermal. While the oil and gas industry has achieved great depth (>12,000 meters), and managed to drill into temperature (>600°C), it has not done so successfully in a combined manner in hard, fractured (geothermal resource rich) rock. It is important to note that the bulk of drilling costs are site specific. Access, site development, and geology are costs determined by each site. Commodity, energy, and drill crew costs also vary. In collaboration with industry, the U.S. Department of Energy efforts to reduce drilling costs by 50% were only partially successful in that they achieved cost reductions of 20%.

10

Power Conversion One of geothermal’s fundamental weaknesses is its low energy density. Low energy source temperatures (geothermal resources are from 85 to 450°C) result in lower maximum work, with potential through the fluid’s availability or exergy, compared to combustion of hydrocarbons or nuclear (1,000 to 1,500°C). This is a consequence of the second law of thermodynamics, which no prize challenge could overcome. Maximizing the efficiency of power conversion for low temperature resources is a critical technology path. The engineering focus here is to increase power conversion to 60% or more, which requires further investments in R&D. These efforts will improve heat-transfer steps by minimizing temperature differences and increasing heat-transfer coefficients, and by improving mechanical efficiencies of converters such as turbines, turbo-expanders, and power plant pumps.

Reservoir Challenges Within reservoirs, the MIT study identified five major resource development challenges that are art and practice related. They are 1) flow short circuiting, 2) a need for high injection pressures, 3) water losses, 4) geochemical impacts, and 5) induced seismicity. The importance of sensors downhole should not be undervalued. The MIT report identified their importance, and the DOE research agenda frequently reflects it. The needs here are reliable, and operable tools exist to measure temperature, pressure, flow rate, and natural gamma emissions. They must be capable of surviving in a well at temperatures of 200°C or higher to provide long-term monitoring. Here again, military and space applications will be both the beneficiaries and suppliers of such solutions. High-temperature instrumentation for borehole imaging and other purposes is a key technology deficiency. Though tools exist that can perform satisfactorily for short periods, instruments capable of collecting data in place for protracted periods (i.e., days to years) for well stimulation and, more importantly, for reservoir operation and management remain elusive. Until methods for reliable zonal isolation are available for high-temperature applications at high differential pressures, all stimulation attempts, including mini-fracs, will be limited to open-hole or low-temperature applications.

11

Pumping System Requirements & Challenges Pumping systems lie at the heart of geothermal systems. The interest is for systems that can operate beyond the current depth, temperature and power outputs.

Superconducting Motors As alternatives to Copper Superconducting motors are AC synchronous motors that employ HTS (high temperature superconductor) windings in place of conventional copper coils. They are capable of generating higher magnetic fields resulting in a significant space savings – critical to downhole pumps. They can match the power output of an equally rated conventional motor with as little as one-fifth the size and weight These motors are also more efficient. A 1% gain on a 500 hp ESP running continuously would result in a 43 Megawatt hours of electricity savings per year. This is important in power generation when one is concerned about the parasitic load of the pump. Additionally, these motors would have significant impact in the large industrial motor market – which currently consumes 70% of the manufacturing energy in the U.S. These large electric motors are used in pumps, fans, compressors, blowers, and belt drives deployed by utility and industrial customers, particularly those requiring continuous operation. These motors are common in large process industries such as steel milling, pulp and paper processing, chemical, oil and gas refining, mining and other heavy-duty applications. An emerging area is transportation applications, particularly naval and commercial ship propulsion, where size and weight savings will provide a key benefit by increasing design flexibility and opening up limited space for other uses.

The long-term goal of the U.S. Department of Energy’s Geothermal Technologies Program is to produce pumping systems capable of producing flows greater than 80 l/sec from engineered reservoirs at a depth of 10,000 meters and temperatures of 300°C. This capability is necessary if the MIT vision of 100,000 MWe by 2050 is to be achieved. In the next ten years, DOE seeks more realistic goals. The MYRDD lays out a clear and expansive geothermal R , D &D strategy. Most of the work focuses on reservoir identification, development and stimulation if commercialization is to be demonstrated. In the area of “Interwell Connectivity Barriers” pumping systems feature prominently. They also speak about the shortcoming of such pumping systems; “downhole pumps capable of withstanding EGS conditions while sustaining sufficient EGS flow rates do not yet exist”. From the MYRDD 2009 to 2015, DOE sets the targets for pumping systems (note how increase in power output is a function of depth of operation): • By 2012, improve the performance of downhole pumps, especially ESPs, to operate at temperatures of 250°C, mass flow rates up to 80 l/s, setting depth as great as 1 km for well bores 6 5/8 to 10 5/8 and operating at pressures up to 200bar. • By 2015, improve the performance of downhole pumps, especially ESPs, to operate at temperatures of 275°C, mass flow rates up to 80 l/s, setting depths as great as 2 km for well bores 6 5/8 to 10 5/8 and operating at pressures up to 200bar. • By 2020, improve the performance of downhole pumps, especially ESPs, to operate at temperatures of 300°C, mass flow rates up to 80 l/s, setting depths as great as 2 km for well bores 6 5/8 to 10 5/8 and operating at pressures up to 200bar.

It is estimated that the worldwide addressable market for large industrial motors is over $1.2 billion annually.

12

Pumping Systems Today Geothermal pumps today are divided into two classes, lineshaft and electric submersibles (ESPs). Lineshaft pumps are limited by depth and power, but because the motor is isolated at the surface, it does not incur temperature issues. ESPs allow for greater depth and greater power output. Their limitation is the electric motor. At elevated temperatures, the electronics degrade. Containing the electronics in a dry environment is a further challenge in

Esp Failure Analysis

environments of elevated temperatures and pressures.

ESP System Component (Primary Failed Item)

Several submersible pump manufacturers offer pumps for high-temperature service. However,

Assembly (non-specific) Cable Sensor Gas Handler Motor Pump Intake Seal/Protector Other

Percentage of total failures 1 21 1 1 32 30 4 10 1

Source: Wood Group

they do not meet the temperature, lift, and flow control requirements of the geothermal industry. Currently, pumps available are rated to 240°C (464°F) and 440 gpm (~28 l/s) and 218°C (425°F) and 1500 gpm (~95 l/s). Today’s high temperature pumps only operate for 6 to 12 months before replacement. Current pump offerings today with regard to lineshafts are at the maximum capacity of shaft torque. Current lineshaft pumps have maximum power outputs at 800HP, some achieving 1,100 HP. Submersibles can achieve significantly higher outputs and would readily be replaced in existing wells if there were sufficient flow. A new lineshaft pump coming on line by Ormat in Brawley, California is being set at a depth of 655 meters (1,805 feet) and pumping 136 l/s (2166 gpm) with a power of 1,112 Horsepower. Current pump offerings today with regard to ESPs are limited to three major pump companies

Ceramic matrix composite insulation

Baker Hughes Centrilift, Schlumberger Redda, and The Woods Group.

CTD is developing ceramic matrix composite

lineshaft drag and can be installed in deviated wellbores. The specialized high-temperature,

electrical insulations for high temperature

high horsepower, ESP system has achieved over 1,000 days run time.

operation. This new insulation for ESP motors and cables is based on CTD’s NANUQ™ high temperature heater products which have shown stable operation at temperatures as high as 850°C for more than 1 year. These insulations are expected to provide significantly improved hightemperature electrical performance as

ESP systems also eliminate the need for ancillary pumps, improve efficiency since there is no

Recently the CTD Company, and the Woods Group received funding to develop and demonstrate Electric Submersible Pump (ESP) motor coil designs that utilize proprietary inorganic insulation materials. These materials can be applied to motor coil winding conductors using conventional motor fabrication processes and provide superior electrical performance at elevated temperatures. Schlumberger is working on extending the internal operating range of Electrically Submersible Pump (ESPs) to 338°C in both geothermal and the increasingly hotter Steam Assisted Gravity Drainage (SAGD).

compared to currently-used polymer insulations and provide a considerably longer life expectancy in the geothermal environment.

13

Lineshaft Pumps Operators have had lineshaft pumps operating at depth for periods approaching ten years (generally five years). These systems typically have a power output of 800 horsepower, but in some cases, 1,100 horsepower has been achieved. Limitations in shaft torque hinder power output. Industry operators show great interest in the potential of a product offering in the 1,500 horsepower range. One operator said that such a pump would be “huge” in terms of impact to power output per well. Additionally, the absence of casing oil would not affect heat exchangers.

ESPs ESPs are prolific in the marketplace, and at ambient temperatures they have shown great success in their ability to operate at high power for long periods of time. The systems are manufactured in stages reaching 10 meters in length for transport purposes, and are assembled on site in sections of motor, seals and impellers. Some ESPs have reached 40 meters in length. However, in high temperature environments the systems electronics have not fared well.

Pump and Motor Issues Electric motors face significant deterioration of efficiency and longevity at elevated temperatures. Motor companies have long explored the upper temperature ranges of motors

Cabling One area of possible focus is cable deployed pumps. Pumps of this type would reduce or eliminate the need for casings, thus resulting in reduced drilling costs. They would also allow for multiple pumps to be set in series, thereby obviating the

for research and academic purposes. However, most motor installations can easily be modified to include a temperature cooling mechanism. Downhole environments are limited in space and accessibility. Further compounding this are the elevated temperatures of the geothermal reservoir. Copper windings begin to display plasticity and material creep at elevated temperature. Copper’s electro-magnetic properties are well known and highly valued in most motor categories (many metals are measured against it in what is known as the International Annealed Copper Standard)

combined power and temperature challenge

At elevated temperatures electronics degrade and motor efficiency declines. Once beyond

identified as the biggest obstacle. Cable

200°C, a host of technical problems begin to affect the efficiency and lifetime of a motor.

seals are a primary point of concern. Not

Polymers encounter a temperature range that alters their performance. Thermal shocks in

surprisingly, cable costs increase with the

the form of rapid temperature drops are significant in their impact because of the difference

depth of the pump. In some cases, cable

in shrinkage rates and material response. Furthermore, gases coming out of solution due

costs can be 30% of the pumping system.

to temperature drops negatively impact a motor. The simple analogy is like a scuba diver

Cable deployed pumps are common in other

surfacing too quickly and getting the bends.

applications, and some have proposed cable deployed geothermal pumps as a means

The argument for higher power is clear for both hydrothermal and EGS. The industry interest

of shortening deployment time as well as

in replacing lineshaft pumps with ESPs is not just due to the limitations of depth, but because

reducing casing costs.

ESPs have high power output.

14

High temperatures yield higher power outputs. This is a basic outgrowth of the second law of thermodynamics and Carnot’s Law of Efficiency. The following example demonstrates this

pump here

clearly. A mass flow rate of 20 l/s from a 200°C reservoir will generate 1 MW of electricity. A reservoir at 250°C would only need a flow of 8.5 l/s to produce an equivalent amount of power. At 400°C, though fluids would be operating in a challenging supercritical state, a 15 l/s flow would yield 10MW.

42,000

490

30,000

5,800

10,000

3,900

970 38,000

3,000

14,000 540 510

530

9,000

Current installed capacity in region Potential capacity in region

Resources at depths beyond 1100 feet (need the correct lineshaft limit) are not workable for lineshaft pumps. ESPs are then sought. However, because of their depth they face both temperature and power needs. Development scenarios of EGS postulate that the first targets of opportunity will be on the margin of existing hydrothermal fields in areas with sufficient natural recharge (but in need of stimulation and pumping), or in oil fields with high temperature water and abundant data, followed by field efforts at sites with above-average temperature gradients. These high-grade, high-temperature areas will serve as the field development to demonstrate and lower EGS costs. Which leads us to turning and looking at the resoures and the estimates.

15

Resource Hydrothermal power is the current focus of resource exploitation worldwide. Explored and developed for electrical production for over a century, there is a somewhat greater degree of certainty on the size and scope of the resource compared to EGS. As of early 2009, there is an ESP system saves 5-7 days or $17,000 

installed capacity 2,958 MW with an additional 6,937 MW in the planning and development

to $23,800 per instalation vs. line shaft

stage. California and Nevada account for 97% of the U.S. In the United States, the projections

pump system

are in the area of 25,979 MW according to the 2008 USGS Circular. Globally, resource estimates are less sure, but it is believed that an additional 100,000 MW lies untapped, with these hydrothermal resources located along the “Ring of Fire” and at many sites currently not served by baseload electricity. For hydrothermal, the biggest impact will come in tapping currently inaccessible resources, those in the 190 to 220 C range. Globally, resource estimates are less authoritative. The global hydrothermal potential according to the International Geothermal Association (IGA) are around 150,000 MWe. These resources are located around the “Ring of Fire” and at many sites currently not served by baseload electricity. EGS estimates do not exist beyond the United States. The seminal 2006 MIT study conservatively estimated a 100,000 MW potential in the continental United States. These resources are far more prolific geographically, though in general their temperatures and depths are less favorable compared to hydrothermal. However, near term development of EGS is targeted to some very high temperatures resources (approaching 280C). These sites offer the best temperature differential and power conversion rates for energy developers. Only after these sites are developed will the focus turn to the more prolific resources that are lower in temperature.

16

GIS Analysis An analysis was performed of known geothermal resources and their proximity to transmission lines and communities committed to green power. It shows that there are 22 known high value geothermal sites within 10 miles of major electric transmission corridors in the Western United States that are within 50 miles of cities committed to U.S. Conference of Mayors Geothermal Sites and Transmission Grids

Climate Protection Agreement.

-Accelerating the Commercialization of Geothermal Energy-

)HUQGDOH %HO OL QJKDP

!

Getting electric power to urban centers is a major challenge for renewable energy. Not only

( YHU HW W (GP RQGV 6HDW WHO 6DPP DPLVK 7XNZLO D $ XEXU Q 7DFRPD 7XPZ DW HU

is the existing transmission grid overtaxed, it is also incapable of resolving the dispatchability

6SRNDQ H

!

! 9DQFRXYHU 3RUW OD QG *UHVKDP /LQFRO Q &LW\

!

0LVVRXO D

! !! %HQG

( XJHQH

!

!!

! !

!

!

! 3DUDGL VH

5RVD 3HWD OX PD

3RFDW HO OR

! ! ! ! !! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !! ! ! ! !! ! !! ! 6SDUNV ! ! ! ! 5HQR !! ! !! ! !! ! ! ! ! !

!!

6DFU DPHQWR : HVW �6DFU DPHQWR

HM R 6DQ 9DOO 5DIDHO 5LFKPRQG /D ID\HWWH 6W RFNW RQ 6DQ� )UDQ FLVFR 6RXW K� 6DQ )UDQFLVFR 5HGZRRG� &LW\ 6XQQ\YDOH 6DQ� -RVH 0R UJDQ +LOO

! ! ! !

0D PP RW K / DNHV

low carbon footprint, small surficial requirements and 24/7 availability. Physically expanding

!

!

!

public safety. Geothermal energy is emerging as an energy source of interest because of its

!

6XQ 9DOO H\

$UFDW D

industrial and residential demand but for mass transit, water and wastewater conveyance and

!

!

!

%L OLO QJV

%R]HPDQ

!

&RUYDO OLV

! ! !D 6DQW

shortcomings of wind and solar. Urban areas require 24/7 electric availability not only for

! !!

!

!

the electrical transmission grid is a financial and political challenge. Current efforts are

! ! ! !

!

6DOW �/DNH &LW\ 3DUN &LW\

on integrating “smart grid” technologies, tools and techniques to maximize. Undeveloped

!! %RXO G HU 'H QYHU *OHQZRRG 6SUL QJV

!

!! !!

!

! !

!

!

!!

!

!

and communities interested in green jobs.

!

!

6DOL QDV 'X UD QJR

!

9LVDOLD 7XOD UH

! $WDVFDGHU R 0R UUR �% D\ 6DQ� /XLV 2E LVSR

resources proximal to transmission corridors are of interest to developers, energy regulators

/D V 9HJDV

7DRV

As part of a grant from the Lemelson Foundation, a GIS analysis was conducted mapping

+HQGH UVRQ

!

6DQW D� )H %XOO KHDG &LW\

)ODJVW DII

6DQW D %DUEDU D

$OEXTXHUTXH

:L QVOR Z

6DQ %HUQ DU GLQR &KLQ R <XFDL SD 7RUU DQFH 5LYHUVLG H 6DQW D� $QD +HPHW ,UYLQH /DJXQD�+LOO V

! !! ! !! ! ! !! ! !!

9LVW D 6DQ 'L HJR &KXO D 9LVW D

geothermal resources in the Western United States with major transmission corridors. Known high potential geothermal sites identified from the Western Governors Geothermal Taskforce

0R RUSDUN 7KRXVDQG 2DNV /RV $ QJHOH V

%XFNH\H

3KRHQL [ *R RG\HDU * LOE HUW

!!

!

5XLG RVR

! !

7XFVRQ

$ODPRJRUG R

!!! /D V &UXFHV !

Click to enlarge – high resolution map %L VEHH

Report were mapped. Each location was then evaluated for its proximity to transmission lines. 57 of the known sites are within 10 miles of a major transmission corridor. Additionally, a spatial analysis of climate protection cities and geothermal sites was conducted. The

!

Geothermal Sites Within 50 Miles of Climate Protection Agreement Cities

!!

Other Geothermal Sites

Mayors of these cities have made commitments to meeting Kyoto targets through a range of mechanisms, one of which is renewable energy.

50 Mile Buffer of Geothermal Sites Transmission Lines !

Climate Protection Agreement Cities Other Cities

A modest 50 MWe power project will !

generate 263 temporary jobs (primarily !

engineering and construction) and 85

: Climate protection cities are defined as those cities which have signed on to the �

$QDO \VLV �DQG�&D UW RJU DSK\�E \

&2 5( �*,6�//& ZZZ�FRUH JLV� QHW

��

���

0LOH V

U.S. Conference of Mayors Climate Protection Agreement. They are mapped and presented as

0D UFK���� � 'D WD���: HVWH UQ �*RYHU QRU V� $VVRFLDWL RQ�*HRWKHU PDO� 7DVNIRUFH 5HSRU W��1DW LRQDO� 5HQHZDEO H ( QHU J\ � /DERU DWRU \ ��) (0 $� 8�6 ��&HQV XV�% XU HDX

actual boundaries as defined by the U.S. Census Bureau. Geothermal sites are those identified

permanent jobs, most within in the 50 mile

by the Western Governors Geothermal Taskforce. A 50 mile radius was drawn around the

radius around a resource. At rate of 1.7 jobs

geothermal sites. 42 Climate Protection cities are within 50 miles of geothermal sites. These

per MWe developed, geothermal is one

localities are proximal for both energy security and job generation.

of the highest job generation capacity of any baseload capital energy investment. It produces more local and quality technical jobs then power systems requiring hydrocarbons, and is superior to wind and solar. They are great green jobs.

Geothermal is one of the highest job generators compared to other renewable. A modest 50 MWe power project will generate 263 temporary jobs (primarily engineering and construction) and 85 permanent jobs, most within in the 50 mile radius around a resource. At rate of 1.7 jobs per MWe developed, geothermal is one of the highest job generation capacity of any baseload capital energy investment. It produces more local and quality technical jobs then power systems requiring hydrocarbons, and is superior to wind and solar. They are great green jobs.

17

The economic impact of a pump How many jobs will be created from these next generated pumps? At a sale price of $750,000 to $1 Million and a market over 100 units per year will create several hundred jobs. To better understanding that proposition and the larger market demand of downhole submersible pumps an analysis In tandem with the design and technical assessment a pump market analysis was conducted. Unlike oil and gas, geothermal power

GeothermEx, a U.S. based geothermal consulting firm provided some of the analytical support.

cannot be banked. Reservoirs must be

The analysis was limited to the U.S. market as global estimates of the geothermal resource base

actively pumped to generate power. Pump

are less authoritative. Generally, most experts assume that the global geothermal potential is

availability must be 24/7 for an extended

ten times larger than the U.S.

period of time. Replacement and servicing of pumps is a prohibitive as the pump is

This analysis looks at the future demand of downhole pumps for geothermal power. The

mission critical.

analysis shows that initial pump sales will be for hydrothermal applications, well before the EGS market develops commercially. It is estimated that if introduced in 2015 this new class of pump will approach sales of 482 units per year in 2020 or roughly $350 Million in annual sales. In the initial 10 to 15 year time horizon, over 95% of these pumps would be installed in hydrothermal applications which are in need of a robust downhole submersible pump. In tandem, at a small number of locations, these pumps will be installed in Enhanced Geothermal Systems (EGS) sites as it is commercialized. When EGS is fully commercialized this market demand will grow ten fold. The analysis used conservative assumptions such as continued use of such systems in hydrothermal sites (with a 2%/year decay rate) and modest implementation of 30,000 MW of EGS by 2050. It is calculated that annual pump sales will be 1,703 units per year from 2025 to 2050. This assessment did not include SAGD or co-produced fluids, both consider near term high opportunity markets. Unlike oil and gas, geothermal power cannot be banked. Reservoirs must be actively pumped to generate power. Pump availability must be 24/7 for an extended period of time. Furthermore, the installed specific cost ($/kW) is inversely dependent on the fluid temperature and mass flow rate. Said simply, higher temperature and higher flowing wells have lower capital cost per MW developed. As an example, installed capital cost for surface conversion plants start at $2,300/kWe for 100C resource temperature and decrease to $1,500/kWe for 400ºC resource. Currently, downhole pumps are limited in their ability to operate in temperatures greater than 190ºC (375F). The industry seeks a pump capable of operating in the 190ºC – 220ºC range (375F – 430F) to develop hydrothermal resources (above this temperature hydrothermal sites self produce steam and pumps are not needed). Enhanced Geothermal Systems will be deployed in even higher temperature ranges (approaching 280ºC (536 F).

18

With these pumps, new high temperature hydrothermal resources in the 190ºC to 220ºC range will become available for development. These high temperature resources have the best economics. Current geothermal sites will replace existing pumps with these systems because of power output and increased time to failure. Most importantly, EGS will have a critical tool for the development of geothermal reservoirs. The impact on levelized cost is the single most important determinant that will effect broad adoption and installation of technology in current and future geothermal sites. It is incumbent to demonstrate how such a pump would change such costs. Chapter 9 of the MIT study extensively reviews EGS economics. Using GETEM (Geothermal Electric Technology Evaluation Model) developed by Princeton Energy Resources and MIT’s EGS for Windows allowed the MIT panel to review key factors effecting the levelized cost of electricity. GETEM is robust in If power output could be increased from 4

that it allows the user to control 80 different variables and adjust for current technology and

MW to 5 MW in a single well it would reduce

technological advances. In this model both technical and economic factors can be controlled.

the number of wells needed by two for the

These variables cover resource characteristics, drilling costs, well field construction, power

average 50 MW geothermal field.

plant technology and development of geothermal power projects. A review of the cost models shows that fluid flow is the single most important factor. Levelized cost is a function of capital development and operating cost. It is believed that such a pump will increase flow in some hydrothermal wells, allow for greater depth in others, and in others allow for greater temperatures to be tapped. If power output could be increased from 4 MW to 5 MW in a single well it would reduce the number of wells needed by two for the average 50 MW geothermal field. This is an avoided development cost of $10 Million per project. The impact to levelized cost would occur in capital cost (reduced drilling cost) and O & M cost (change in parasitic pumping cost).

In the 190 to 220 C range it is possible to project a 10% increase in power output of a pumped well vs. a non-pumped well. In this limited temperature range, the installation of a pumping system would pay for itself in 2 years.

The impact to levelized cost occurs in increasing pumping power. Initial pump systems will be designed to a hydraulic horsepower of 750. Future targets are 1,500. Pumps operating in this range and capable of increasing flows from 2,500 gpm to 3,750 gpm would begin to hen it is possible to see a marketable contribution to levelized cost. Analysis by GeothermEx shows that levelized cost would decrease by $0.005 per kilowatt hour (half a penny per kW/hr). However, this only happens at power ranges outside of the current pump target. This clearly demonstrates the value of power over temperature. Analysis of levelized cost impacts from such a pump are less clear vis a vis temperature. Above 220ºC hydrothermal wells are self producing. In the 190 to 220ºC range it is possible to project a 10% increase in power output of a pumped well vs. a non-pumped well. In this limited temperature range, the installation of a pumping system would pay for itself in 2 years.

19

Areas

MW Today

U.S. Hydrothermal existing

29581

MW to 2010

U.S. Hydrothermal under development

MW to 2020

MW to 2050

69372

U.S. Hydrothermal Potential (WGA) near term

89463

U.S. Hydrothermal Potential (WGA) long-term

15,5164

U.S. EGS short-term8

508

U.S. EGS Long-term12

30,000

# of Pumps needed initially

# of Pumps to 2025

# of Pumps to 2050

1221 (known)

244

4577

9915

1,9826

6,49810

1,278

2,556

5,75110

2,216

-0-

8,86211

10

206

257

6,000

10013

21,00012

4,902

42,593

Total (pumps)

Basic Assumptions • Time to Replacement on pumps; 3 to 5 years. For this analysis we will assume that pumps last five years (optimistic). • Output per well; 7 MW for hydrothermal, 5MW for EGS. In general, hydrothermal systems produce 5 MW per well. EGS is projected to produce 2-5 MW.

Specific Assumptions 1. MW Today: Extracted hard number from last GEA report. While 2958 is the total number of MW produced, most of this is shallow resources producing high power output (in some cases 25 MW per hole). It is known that the number of pumps is 100 line shaft and 22 ESPs. Assumption is that all lineshafts will be replaced by ESPs.

Levelized Cost of Electricity [c/kWh]

Initial Base-Case Values [see Table 9.4] 14

2. GEA most recent analysis of capacity underdevelopment. To come online within the next few years. Would not install new ESP pump until 2015.

13 12

3. WGA analysis. Near term resources. Assumption that they will come on line by 2020.

11

4. WGA Analysis. Long Term resources. Assumption that they will come on line between

10

2025 to 2050 in a staggered rate of 3,000 per 5 year horizon. With a five year to failure

9 8 -60

assumption they are a total of 9,000 pumps. -40

-20 0 20 40 % Change From Base Case

Drilling & Completion Cost Stimulation Cost Surface Plant Capital Cost Flow Rate/Production Well

Source: MIT

60

Thermal Drawdown Rate Bond Debt Interest Rate Equity Rate of Return % Bond vs Equity Debt

5. Assumes 7 MW per well for hydrothermal. 6. Assumes pump life of 5 years. 991 pumps replaced once = 1,982 7. Assumes decay rate of existing hydrothermal by 25% by 2050.

20

8. Most estimates place EGS development by 2015 to be limited. A modest 50 MW (probably DOE sponsored sites) is assumed. Pumps would be replaced once by 2025. 9. Total pumps to 2025. 10. Assumes 10% decay rate of well fields over 25 years. 11. Assumption that they will come on line between 2025 to 2050 in a staggered rate of 5,000 MW per 5 year period. 12. MIT EGS assumption is 100,000 by 2050. Assume 30% success for 30,000 MW total developed by 2050. Staggered rate of 1,000 MW per year developed from 2020 to 2050. Assumes 1 pump per 5 MW and five years to failure. 13. 2025 EGS estimate is placed at 500MW. 100 pumps estimated. In the next ten years the hydrothermal market will continue to expand and drive the pump market for ESPs. In doing so it will provide a commercial market for a pump whose performance and role in commercializing EGS is critical. Without a robust ESP, researchers will not be able to tackle the larger EGS challenge of reservoir stimulation and management. GeothermEx, a U.S. based geothermal consulting firm provided some of the analytical support. The analysis was limited to the U.S. market as global estimates of the geothermal resource base are less authoritative. Generally, most experts assume that the global geothermal potential is ten times larger than the U.S. Assumptions were drawn from the seminal MIT Geothermal Report, Sandia National Laboratories Assessment of EGS and the DOE Multi-year Research, Development and Deployment 2009 – 2015. Baseline data for power development is from the most recent Geothermal Energy Association Assessments and the Western Governors Association 2006 analysis. New USGS assumptions will be issued in the summer of 2009, but will not significantly alter the baseline assumptions of power potential in the United States.

21

MARKET SIZE BEYOND Hydrothermal and EGS These pumps would be installed in coproduced resource zones (geopressured zones generally do not require pumps for production. The overpressure provides the lift). The coproduced resource has been intensely studied in the Gulf Coast region of the United States, where it is believed that 6,000 MW could be developed. Power plant capital costs for coproduced fluids range from about $1,500-2,300/kW. This lower cost is achieved through its existing integration into the oil and gas infrastructure. These resources range from 150 to 180°C - temperature will not be the key performance issue, but longevity will. Tar sands, heavy crude oil and natural bitumen deposits are hydrocarbon resources whose extraction would rely heavily on high-temperature pumps. While conventional crude oil reserves globally are 1.0 trillion barrels, there is an estimated 5.4 trillion barrels from this poorer quality

Other Sectors to Benefit from High Temperature Motors • Electric Motor Market

hydrocarbon. Currently, recovery of oils from these resources involving Steam Assisted Gas Drainage (SAGD) has proven successful at very high temperatures (220°C). These pumps do not have high horsepower (~200HP), but their operational success leads many pump experts to believe that scaling up to higher power outputs in this temperature range is quite possible. Beyond the energy sector, there is also a need for high temperature electric motors. The

• Electric Cars Electric Cars (lighter motors)

automotive industry’s quest for an electric car would be advanced by this innovation, as it will

• W  ind Turbines (ability to run hotter and lighter)

lead to lighter motors. Defense and aerospace interest would likewise be due to the frequent

• All Electric Naval Ships • Defense Applications • High Altitude Motors

high-temperature and high-pressure environments in which their systems operate. Currently, the U.S. government is establishing a large loan guarantee program for renewable energy systems. Coordinating the financing and purchase of 50 to 100 pumps would be a $25 to $100 million investment. It would be necessary to create a special-purpose finance entity

• Thermocouples

to arrange and coordinate the advance market commitment. This entity would be subjected

• Ceramic Coated Wires

to strict financial controls, heavily audited and possibly owned and co-ordinated by a federal agency or its designated fiscal agent.

22

THE PRIZE > RATIONALLE FOR THE PRIZE 01 > PRIZE FUNDAMENTALS 05

RATIONALE FOR THE PRIZE Introduction Prize competitions are often seen as a silver bullet. Yet it is rare that the mix of a challenge and prize is well meshed. A global education prize is hard to imagine, for example, when we know that the solution involves smaller class sizes, high teacher salaries, and more parent involvement. No prize could deliver such a solution. Technical prizes, however, can be effective in galvanizing interest, focusing new ideas and new members on a problem, thereby resulting in breakthrough innovation. Properly structured, technical prizes with commercial upside (such as the Automotive X Prize and the Space Prize) can draw private research and development investment well beyond the traditional government scientific grant. Such potential exists with geothermal energy today. It exists because geothermal is a maturing and demonstrated power source with significant upside. Granted, it faces a unique set of challenges, which must be overcome to breakthrough and become part of the U.S. energy paradigm. But most of these challenges will be achieved with lateral technology transfer from the oil and gas sectors (in the areas of tracers, drilling, and subsurface exploration). Innovators in the oil and gas sectors must be brought on board to contribute their industry expertise. Geothermal energy is oil and gas’s lesser cousin. Oil and gas out competes geothermal by 100, or in some cases, 1,000 to one in terms of investment, drill rigs, geologists, and research programs. But the marketplace, and more specifically, energy developers are not ignorant of geothermal’s value. If the levelized cost can be understood and reduced, its low carbon footprint and high baseload availability make it a very attractive energy source. Installed capacity current & potential (in MW) 160,000 140,000

Installed capacity

Additional potential

MW

120,000 100,000

Today, geothermal resource production relies primarily on lineshaft pumps, which are limited in their depth and power output, or electric submersible pumps, which are limited in their lifetime and temperature tolerance. For EGS to succeed, improving such systems is a base requirement. Pumps function at the heart of geothermal systems. This shortcoming is so significant that its characterization in the Department of Energy’s Multi-Year Research,

80,000 60,000

Development and Deployment Plan (MYRD&D) is cure, they “….do not yet exist.”

40,000 20,000 0

Industry experts already acknowledge the lack of a robust pumping system. If a pump existed North Asia America

Europe

Africa Oceania Latin World America & Caribbean Source: IGA, Bertani

today, it would replace over 120 lineshaft pumps operating throughout the western U.S. simply on the basis of its benefit in power output. More importantly, if EGS is to harness resources from high temperatures at greater depths such a pump is mission critical.

24

The Prize The Foundation for Geothermal Innovation is in the process of developing “The Global Geothermal Challenge”, a broad geothermal industry incentive prize focused on solving a discrete technical challenge while re-invigorating an industry and energy that will be part of the planet’s energy platform for millennia to come. To be launched in 2010, the prize will award a prize purse of several million dollars provided by the private sector to the team (or teams) that can meet specific technical targets.

Creating a Geothermal Prize The remaining work is taking a prize to launch and creating a compelling competition that will draw teams and inspire innovation. Prize competitions have several basic components and distinct phases of execution. The initial tasks include creating industry support for the project, soliciting their assistance in the competition design and asking them to serve as the competition’s judges and ultimately, its customers.

Prize Fundamentals Prizes can deliver change, but they work best when addressing a well-defined problem. The McKinsey Report “And the winner is” identified seven key areas where incentive prizes create a shift in thinking. All of these areas are of interest to geothermal: The real incentive to the competition

• Identify Excellence (bringing the best talents and technology to the challenge at hand)

will come in the form of Advance Market

• Influence Public Perception (attention grabbing, a prize will help geothermal overcome its

Commitments (AMCs) that will assure the sale of 100 pumping systems for installation and deployment in existing hydrothermal systems and EGS sites under development.

position as “the forgotten renewable” and increase market demand) • Focus a Community (rallying a broad community of engineers, technologists, energy developers and policy analysts to apply their skills and focus) • Identify and Mobilize New Talent (with the Geothermal Intelligentsia now retiring, new blood is needed) • Strengthen  a Community (a prize competition will act as a rallying point with which to build a sustainable problem-solving community and ensure extended innovation) • Educate and Improve Skills (byproducts of the competitive process, a prize will educate the public about geothermal and renewable energy while improving the skills of the participants) • Mobilize Capital (prizes attract capital, many times the prize purse amount, to motivated competitors and into the service for resolving the problems targeted, creating powerful leverage to solve intractable issues)

25

It is not enough to simply create a prize. It must be distinct, draw numerous competitors and have a strategy, implementation plan and learning model. The plan and its implementation are more important than the prize purse itself. The near term work is to create a prize platform with clear ground rules, respecting intellectual property, creating media awareness around competition and executing the project faithfully. McKinsey refers to it as the “prize architecture.” Fortunately, a geothermal pumping system is well suited to a prize competition. The state of the geothermal industry, the technological challenge of a pump, and its economic impact on reducing levelized cost all coalesce around the creation of a geothermal prize.

What is the structure of a geothermal prize? The proposition is an incentive prize to accelerate the commercialization of geothermal energy. To transform geothermal, it must meet the needs of hydrothermal and drive EGS. To succeed it must be: • Achievable • Conforming to the laws of physics • Economically feasible • Capable of being Manufactured • A stretch (so as to validate the prize purse and spur innovation). • Impactful for an industry - the hydrothermal proposition is not enough. Geothermal needs to be more than 5% of the U.S. energy budget. To achieve that EGS is needed. • Attract new professionals to the field. Can this prize be achieved? The participants at the Lemelson meeting largely felt so. Prize solutions need to be broadly applicable and reproducible. Nothing about the requirements violates the law of physics. Individually, such criteria have been met in other industrial sectors. The greatest concern, the temperatures at which motors can operate, is well within a feasible target (220°C by the Participants, probably 275°C in the final prize design). Research by GE in the early 1970s had motors operating in the 700°C range. What needs to be achieved is integrating all of this into a 13 3/8-inch diameter system and delivering it a sales price in the range of $750,000 to $1 million dollars. For prize competitions to succeed, they need a high number of competitors. Limiting the competition to the three major pump companies would not spur any competition beyond what already exists. Furthermore, these companies see the temperature challenge as real, but limited to their other product needs (most oil and gas applications are not at elevated temperature – power and sensors are).

26

Advance Market Commitments A prize purse alone will not be enough to induce the major pump companies to participate in a prize competition. Offering an advance market commitment of 50 to 100 pumps will be critical to drawing interest. AMCs are effective mechanisms to capitalize production and achieve economies of scale. There are frequent examples of AMC’s in biofuels. In the prize space, one example is the light bulb with major commitments by the utilities. In the case of geothermal it is necessary to have an AMC that stimulates but does not overwhelm the sector. If the AMC was a majority of the global demand there would be no market incentive beyond the first production run. Fortunately the demand well exceeds that. However, given the projected market size of EGS over the next 15 years (15 to 500 MW) an AMC focused on just EGS alone would be both insufficient and stymie any further market need. Fortunately, the hydrothermal market can utilize such a pumping system and absorb sufficient market demand to make an AMC worthwhile. The AMC would focus on identifying customers and arranging sale of pumping systems to be available in 2015. Geothermal operators have already signaled an interest in such pumps. Securing commitments, assuring production and delivery in a timely fashion will not only accelerate the geothermal sector, it will minimize the financial exposure for the potential pump manufacturer.

The Media Challenge A pump installed at depth offers little telegenic attractiveness. However, the surficial manifestation of geothermal resources and the resource development does. Geothermal energy is not sexy. Transmission–wise, it is grid-friendly and it has a reputation as reliable baseload with high availability. But it suffers from a lack of social appeal.

Good prizes can change that. Volcanoes and hot springs dot the earth in plenty of beautiful locations. Alligator farms in the Rocky Mountains, garlic drying facilities and district heating are simple but highly communicable examples of geothermal energy in action. Conversely, preserving national parks and respecting sacred sites are priorities for the future of geothermal. With EGS, resource development will take us away from volcanoes and hot springs. Environmental preservation, resource siting and development are all areas that may attract media attention. It is possible to use a media focus on what we are preserving by extending geothermal's reach.

27

Phase I of the Prize Geothermal Visuals

The goal of Phase 1 is for teams to innovate. During the initial phase competition the goal is

• Hot Springs

to have prize competition requirements that draw as many participants as possible. Over 60

• Volcanoes

teams signed on to the automotive prize in its initial stages.

• Aqua-culture

To that end, the initial phase of the competition will have a limited technical focus – an

• Agriculture

electric motor capable of operating at elevated temperatures. The applicants will be limited

• District Heating

to university teams and their partners. University departments (e.g., Mechanical Engineering)

• Industrial Heating • Cascading Energy Use

may form alliances with other academic departments, start-ups or existing manufacturers. The team lead will be an academic institution and the prize purse will be awarded to an academic institution. How they wish to structure themselves shall largely be left open. The prize criteria will state that universities clearly acting as fronts for manufacturers will be discouraged.

Phase 2 of the Prize Phase 2 will focus on team demonstrations. The teams that demonstrated success in Phase 1 would advance to Phase 2. During this phase the major pump companies would enter and join the competition. Only 3 or 4 teams would likely advance to this phase. Phase 2 will be expensive and extensive. Corporate and federal partnerships will be necessary. Most importantly, access and use of a geothermal site will be critical. One method currently envisioned would involve the use of a new geothermal site being developed but not yet on-line. As some fields have ten plus holes for resource extraction, the initial holes could be used for testing as the remaining are drilled. After the competition, the resource would be turned over to the developer for normal operation. During Phase 2, testing and demonstration will take place in actual geothermal wells. The teams will be required to deploy their pumps, operate them and demonstrate their resilience to a series of stresses (primarily thermal shocks). To participate in Phase 2, the teams would have to provide at least two or three units for testing and submit a detailed manufacturing plan. During Phase 2, it is believed that the major pump companies will align themselves with university teams. While the initial university teams may be able to design a high-temperature motor and design a manufacturing plan, the ability to actually fabricate test pumps for deployment at depth may be beyond their reach. During Phase 2, the teams that demonstrated success with a robust electric motor would be allowed to partner with a major pump company and submit a system for field-testing. In considering alternative pumping systems beyond electrical submersible pumps, it may be wise to allow some non-conventional solutions a venue to submit systems during Phase 2 for testing and demonstration. These candidates would have to provide at least two complete pumping systems that meet the deployment, power and operational requirements.

28

 Potential Teams and Institutional Stakeholders

Recruiting Teams

• Sandia National Labs

that unlikely contestants display some of the best innovation. By structuring Phase 1 with a

• Baker Hughes Centrilift • Woods Group ESP

During the Lemelson Meeting, participants were asked to name entities that could possibly be part of such a process (see box). However, previous prize competitions have demonstrated discrete manageable challenge – a motor challenge - the number of possible teams expands significantly. If the prize requirements were specific to an ESP in Phase 1, it is likely that only the major pump companies would engage.

• Schlumberger Redda • GE • Siemens • Goodgrich Flow • Flowserve Byron Jackson • Purdue University • University of Wisconsin • Idaho State University • Texas A & M • Argonne National Labs • Idaho National Labs • Oak Ridge National Labs

29

THE LEMELSON MEETING > > > > > > > > >

INTRODUCTION 01 TECHNICAL DISCUSSION 02 TEMPERATURE 05 FLOW RATE 05 MOTOR 05 D EPLOYMENT 05 EFFICIENCY 05 TESTING PROTOCOLS 05 CONCLUSION 05

INTRODUCTION Once the need for a new pump was identified as the technical shortcoming for the geothermal industry, and well suited for an incentive prize, it became necessary to convene a panel of experts to define the technical scope and parameters of a competition and to build out support and buy-in for such a prize from industry insiders. Through a grant from the Lemelson Foundation, a one-day design meeting was held at the Stanford Faculty Club in tandem with the annual Stanford Geothermal Reservoir Engineering Workshop. Twelve participants and five observers were recruited from the geothermal industry. The three major pump companies were invited to attend, and accepted. Second to pump experts in importance were plant operators, those most challenged by pumps, but also the key customers that will ultimately purchase such a device. The focus of the meeting was on geothermal ESPs, anticipated difficulties in developing, testing and marketing such pumps, and the proper structuring of competition that would be open, fair, and successful in developing a new generation of geothermal ESPs. Prize creator Lawrence Molloy solicited suggestions from throughout the industry for participants. A solicitation for attendees was posted in the GRC newsletter. Karl Gawell from the Geothermal Energy Association and Curt Robinson of the Geothermal Resource Council submitted names. Ms. Susan Petty also offered a wide range of names that best covered the industry. Mr. Charles Baron of Google and Ms. Alexandra Pressman of the International Geothermal Partnership for Technology were also forthcoming. In total, over four dozen candidates were evaluated and interviewed to serve as participants. Only three experts declined to attend, solely due to scheduling conflicts. A full list of participants and observers and their respective bios is included in the Appendix. A facilitator was recruited to coordinate and move the group through the day. Joel Renner, a retired career scientist with Idaho National Engineering Laboratory was contracted through the Foundation for Geothermal Innovation to lead the discussion. A list of topics and parameters was sketched out by prize creators Michael Lindsay and Lawrence Molloy.

The pump and motor should be required to: • Be deployable through 13 3/8 inch (~34 cm), 72 pound casing • Be Capable of operating in 200 - 225°C (~395 - 437°F) geothermal fluids • Have a flow of at least 60 l/sec (~950 gpm) • Operate with at least 300 psi • Maintain 750 hydraulic horsepower • Operate reliably without failure for 3 years, and • Be able to operate at a variable rate of flow

31

Technical discussion at the meeting focused on the design criteria for a successful ESP, as

Design criteria: • Diameter • Pumping capability • Serviceability/lifetime • Variable flow rate • Operating temperature • Ability to withstand thermal stres

opposed to the specifications for such a pump. Specifically, the meeting focused on such elements as the size of the pump, its pumping capacity, and operation rather than the materials and design of components. The panel also formulated a list of criteria that the pumps must meet, as well as a list of criteria on which to evaluate the pump. The panel’s implicit working assumption was that the solution is a next-generation ESP. However, some have questioned this proposition as the need is moving heat which allows for a broader solution universe. Some have interest in employing novel methods such as subsurface steam drive system. The testing criteria need to allow for testing downhole systems, not just electric motors in systems that are capable to work at depth. Currently, the thinking trends toward an ESP solution, but the prize design will be criteria that cast a broader spectrum of opportunity in an effort to spur innovation. Much like a patent application, the design and description must be accurate, correct and respectful, while claiming as broad a patent position as possible. As this was one of the first meetings to design the prize, the working assumption at this point and the focus of the panel is on ESPs. The remainder of this technical section will reflect that. In convening the group, the attendees were prepped ahead of time with some basic design and evaluation criteria for an ESP.

Technical discussion After spirited discussion, the panel made the following recommendations for a geothermal ESP. The pump and motor should be required to: • Be deployable through 13 3/8 inch (~34 cm), 72 pound casing • Be Capable of operating in 200 - 225°C (~395 - 437°F) geothermal fluids • Have a flow of at least 60 l/sec (~950 gpm) • Operate with at least 300 psi • Maintain 750 hydraulic horsepower

Evaluation criteria:

• Operate reliably without failure for 3 years, and

• A  bility to monitor downhole performance and health of the pump

• Be able to operate at a variable rate of flow

• Ease and time required for deploymentServiceability/lifetime • Efficiency • Capital cost • A  bility to manufacture and market the pump

32

Pump Diameter The pump-motor must be deployable through 13 3/8 inch (~34 cm), 72 pound casing. Editors Note: The panel believed, rather than specifying a maximum diameter and length for the motor and pump combination, the prize should specify a specific casing size. They further noted that pumps currently exist that will fit into 8” casing, but that they are not capable of operating in geothermal systems. The key trade off in pumping from depth is drilling costs vs. diameter. Wider diameters are key for flow (flow increases as a square of the diameter) but more expensive to drill. Sufficient flow is critical for power output and to prevent cooling (<40 l/s from depth would result in cooler liquids). A non-deviated hole needs to be specified, but is generally not a concern. Some ESPs are exceeding 30 meters in length (100 feet plus) but encounter limited deployment challenges in most well holes. Editors Note: The target diameter is unresolved. DOE’s MYRD&D sets ranges from 6 5/8 to 10 5/8. This is with mass flow rates of 80 l/s and an operating pressure of 200 bar. The current consensus is that the prize will target a broader diameter because of the larger flow capacity, a key trade off with narrow diameter systems.

Temperature The pump must be capable of operating in 200 - 220°C (~395 - 437°F) geothermal fluids Editors Note: Temperature was quickly identified by the meeting participants as between 200-220°C. However, post meeting follow up quickly highlighted grave concern with this temperature. One industry expert labeled such a temperature target as “inadequate”. Currently, major companies do offer ESPs capable of this temperature, albeit at lower power outputs. It appears that in developing such a pump the technical trade-offs are between power and temperature. Pump companies are willing to focus on one but not both. However, for EGS to succeed both temperature and power challenges must be overcome. A literature and product review quickly demonstrates that electric motors can achieve substantially higher temperatures. EGS experts seeks temperatures in a range approaching 275°C. While few resources exist at this level, they will be the first resources developed (higher temperature is higher power output).

33

Thermocouple

Flow rate The pump must provide at least 60 l/sec (~950 gpm) flow, operate with at least 300

In research by CTD Materials, high

psi, and maintain 750 hydraulic horsepower.

temperature resistant wire that is flexible

Editors Note: The panel focused a great deal of effort on deciding the flow and motor

can be fabricated eliminating the need for separate ceramic insulators. Ceramic material having a co-efficient of thermal expansion substantially similar to that of

power needed for an EGS pump. Ultimately they focused on the hydraulic power. The panel believed that it was not sufficient to specify a flow rate for the pump, without considering the hydraulic power available from the motor-pump system and the operating pressure.

wire can be annealed directly to the surface

The panel also discussed the expected differences in operating in hydrothermal systems

of the metal forming an impervious scratch

and EGS. They expect that flow rates in EGS will be lower, perhaps by as much as a factor

resistant and flexible layer.

of two, compared to hydrothermal. EGS pumps may require setting at greater depths than hydrothermal systems of about the same temperature. So while flow rate for EGS may be lower, the depth from which the liquid must be lifted is greater. It is the classic trade off in any pump; flow vs. head. For example, in one hydrothermal example presented by Paul Spielman from Ormat, they were utilizing an 800 horsepower pump with a flow of ~220 l/sec (3500 gpm) at 160°C. In contrast the panel believes that early EGS may be limited by the reservoir to producing 1500 gpm (~95 l/sec). MIT and Sandia studies ultimately target 125 l/s as the upper range for EGS. Initial EGS development will be a lower flow rates (in some cases as low as 20 l/s). As a baseline, 400 - 450°F (204 - 232°C) pumps are available but they have limited power and can provide only about 600 gpm. Tar sand developers in Canada utilizing the steam assisted gravity drainage (SAGD) method and have been running 800 shaft horsepower pumps at 200 225°C for up to a year. ESPs are available that run for about a year at 200°C (395°F), 750 psi and pump about 100 l/ sec (~1585 gpm). However, the panel believes that for successful deployment of ESP, they will need to run reliably for two to three years without replacement.

Sensors Specific sensors should not be required. However, the motor and pump should be capable of measuring the performance of the pump and its health. Editors Note: The panel discussed various measurements that should be made both at the surface and at the pump and motor. The panel believed that such measurements should include temperature of the motor and the geothermal fluid, pressure above and below the pump, vibration, motor amps and the surface flow rate. The panel did not believe that the “prize” should specify specific measurements. However, they did suggest a requirement that sufficient measurements be made, so the operator can sense the “health” of the ESP and have some forewarning of ESP failure.

34

Motor The Lateral Technology Shift from Oil and Gas The importance of the lateral technology shift from oil and gas is not fully realized or appreciated by those outside of the geothermal sector. Technically similar, geothermal is dwarfed by an industry and infrastructure geared towards oil and gas. The nature of the resource is subsurface, and it requires extensive resource mapping and exploration.

The pump should have the ability to produce at various flow rates. 60Hz will be made available at various AC voltages at the surface. The contestants will be responsible for their power off-take system. Editors Note: The panel did not believe that a means of adjusting flow rate should be specified. The flow and depth range dictates these constraints. How it achieves those needs should be left open to allow for innovation. Some solutions may involve variable speed drives (VSD). The contestants may have to provide a transformer for the field test. The necessity of a VSD depends on the solution offered. VSD features increases costs. For example, a lineshaft pump with a VSD is ~$580K while an ESP will cost $450K base with an additional $200K for the VFD. Motors can cost up to 40% of the total pump package. As depth increases, the cable

Globally there are over 1 million oil and gas wells. ESPs are installed in 12% or roughly 120,000 wells. For geothermal, less than 1,000 high temperature wells exist. A great number are selfproducing with line shafts adding the final lift. Less than 100 ESPs are operating in geothermal environments. But to access more resource that will have to change.

cost can climb significantly, raising the overall unit cost to become 30% of the total pump cost.

Additionally, there are approximately 2000 drill rigs exploring and developing new oil and gas reserves. On the geothermal side that number is approximately 20.

Editors Note: Discussion on this topic was distracted by a larger theme of availability and

While similar, the temperature and resource challenges of geothermal do not make for a straight forward lateral transfer of technology. Like oil and gas, geothermal resources are found in sedimentary rock. However, the current resource focus is on those in igneous and metamorphic – a different petrological challenge. Lastly, once at the surface, the geothermal resource must be used immediately. Its energy (a temperature differential) must be captured, harnessed and converted to electricity. This is quite different from oil and gas, which can be banked, stored and transmitted;, however, are dependent on the international market price fluctuations.

Deployment The competition should not specify a deployment time or method. However, the deployment should not take more than a week from starting the gun to full operation of the ESP.

length of service as well as thermal cycling. Therma cycling involves back flushing a pump with cold water to stimulate the fractures in the well field. This is a high stress event on the electronics of a motor system. Additionally, there is significant variability in rates of contraction of material during cooling, leading to leaks and pump failure. If a pump is capable of a long operating life, the deployment time is less important. The group focused on a threeyear service life. One week of deployment over a three-year life is 99.4% availability. Generally, the issue of availability is focused around a number of 95%. This second number is both more realistic and allows for alternative solutions. The panelists thought that the prize administration should not specify how the pump goes from surface to reservoir. However, it should caution the contestants that the pump would have to withstand the temperature stress of deployment and operation. Furthermore, deployment may divert from the traditional method of running in on pipe. Deployment may occur with coiled tubing or cable (common in other sectors). The eventual prize advisory board should also specify a setting depth for testing the pump, and they may also want to specify an availability limit, i.e., the time it takes to begin operation after deployment, and the time required repairing or replacing a pump. This specification may be used in the evaluation of the contestants, but should not be a contest requirement.

35

Insulation Research into insulation will focus on metal alloys and ceramics, materials

Efficiency Efficiency should be a scoring criterion not a pass/ fail specification. Editors Note: The preferred method of measuring ESP efficiency would be the hydraulic power delivered by the pump versus the electrical energy required to run the pump. The

that demonstrate good performance

efficiency should be in the neighborhood of 95%, the efficiency of currently deployed

characteristics at high temperature.

equipment.

Deposition of ceramic material (as an insulating material) is being explored using a variety of techniques including; 1)

Cabling

chemical vapor deposition, 2) electron beam

The contest requirements should only specify general operating conditions and not

evaporation, 3) physical vapor deposition, 4)

specify the type of cable.

plasma assisted chemical vapor deposition, or 4) ion enhanced electron beam evaporation

Editors Note: The cable needs to be chemically stable at that reservoir temperature and with the fluid chemistry. The chemistry of geothermal systems will influence the material choices for the ESP and its associated cabling. Some hydrothermal systems have rather corrosive fluids. Elevated temperatures further exacerbate the situation. Hydrothermal systems contain chloride, sulfate and carbonate as the principal anions and sodium, calcium, and potassium as the principal cations. Hydrothermal systems may also contain H2S, CO2, and more rarely HCl. All systems will be saturated with SiO2. However, EGS is likely to contain less saline water than hydrothermal systems. Cable failure is therefore a significant and well-documented concern. It is a challenge faced in other pump situations, and is a major research focus in the oil and gas sector.

Serviceability/Repair time GE motor operates at 725°C in 1971

The contest should require a time to failure of three years for each ESP. Editors Note: The topic of serviceability and repair time was completely recast by the group.

The possibility of a high temperature motor

Operators of geothermal fields generally run their pumps to failure, and pumps are replaced

was demonstrated to 725°C using a nickel

rather than repaired in the field. In this context, serviceability became a moot issue, and the

clad silver palladium wire. The cathode

performance characterization of [ned quote] “time to failure of three years” became a focus of

leads were designed to resist corrosion

the prize. Availability of sensors to forewarn of failure would allow the operator to prepare for

and temperatures up to 1000°C as part of

replacement. It is within this characterization that availability was discussed, and the group

research in the early 1970s on fuel cells.

agreed that the pumps should have an availability factor of 95%.

The upper limitation of the electric motor occurred when the silicon iron rotors ferromagnetic properties passed their Curie Temperature becoming paramagnetic and ceased to have magnetic forces capable of driving a motor

Capital cost The contest should not specify a capital cost but should use both the capital and operating costs as a judging factor. Editors Note: The cost needs to consider are: the capital cost of producing the prototype, the expected manufacturing cost for production runs, and the operating cost. Pumps need to be affordable. It is reasonable to expect that unit prices will be in the range of $750K to $1 Million.

36

Manufacturability The Lemelson meeting highlighted testing as

The prize should require a statement of “Will sell x units at $y.”

a major challenge in designing an effective

This should be a Phase 2 requirement.

incentive prize. Incentive prizes prefer short, low cost, validating and clear testing parameters for final judging. Longevity of service is a key factor for a downhole pump and the preference is for a long testing protocol to demonstrate service lifetime.

Editors Note: Since the prize developers hope to establish a new field-ready pump rather than prototype equipment, the panel suggests that pump developers selected for second phase testing should be required to agree to produce a specified number of units at a specified price prior to field testing of the ESP. In addition, they will need to provide a manufacturing plan and have secured a capable manufacturing partner, something for which the prize administration will provide assistance.

Testing Protocols Testing procedures of competing pumps may exceed one year to demonstrate market viability to operators. Deliberations at the meeting suggest that there should be at least two testing phases. 1) In laboratory testing of most candidate submissions, and 2) field tests of the three or four best pumps. Editors Note: The Lemelson meeting highlighted testing as a major challenge in designing an effective incentive prize. Incentive prize call for short, low cost, validating and clear testing parameters for final judging. Longevity of service is a key factor for a downhole pump, and the preference is for a long testing protocol to demonstrate service lifetime. Consensus was clear that because of the depth of the equipment, long operational service life in extreme geothermal environments will require testing procedures that will be technically challenging. Fundamentally the testing environment requires an autoclave. Building a pump capable autoclave on the surface, or deploying and monitoring a pump at depth is expensive. Next steps in developing the prize would necessitate finding a clear solution and programmatic design that would meet the need. The panel spent considerable time discussing testing of the ESPs. Three factors weighed heavily in that discussion: 1. The ideal length of time and the cost of a three-year field test of pump reliability, 2. the availability of a geothermal site to test multiple pumps, and 3. The lack of laboratory facilities for testing a pump. The panel considered alternatives to long-term, in-field testing in order to shorten the evaluation of pumps and to reduce the cost. To that end, the panel suggested a two-phase approach. Phase 1 would include testing of the pumps in a laboratory setting, and the second phase would test only the best three or four pumps in the field. However, laboratory testing is also problematic, since facilities are not currently available that can test a motor and pump assembly under geothermal conditions.

37

Initial testing of the pump might be possible in a municipal water well or a mine dewatering

Possible Testing Protocols

well. Alternatives to laboratory testing in an autoclave might involve testing of a pump with

• T hree-year straight testing in a developed geothermal well

portion of the ESP is the motor, perhaps, the motor could be tested with a load other than a

• O  ne-year straight testing with multiple thermal shocks

the motor shrouded to allow buildup of heat around the motor. Since the most problematic long pump assembly. However, size may still be a limiting factor. Phase 2 would include field tests of the three to four pumps that provided the greatest value

• V arious thermal shocks at initial phases of testing

during the Phase 1 testing. The group believes that the pumps must be stressed during the

• R  epeated deployment, retrieval and system re-starts in various geothermal wells

first year of testing.

Phase 2 testing, and suggested that the pumps be cycled on and off once a month during the

Of particular concern is developing a test cycle that will assure the pumps operate reliably for three years. Testing could be accelerated by running the pumps at a higher than specified temperature over a shorter time period. The panel also discussed the option of testing a currently available ESP at a higher temperature than the “prize” temperature to determine its time to failure and then comparing that failure time with the failure time of a hightemperature pump operating at the same higher temperature. The panel did not believe that either test method could be used to accurately scale pump operation at the prize’s specified temperature over 3 years. The panel also cautioned that testing of a prototype pump might not provide the same results as the testing of a production-run pump. The prize panel should develop some mechanism to assure that the prototype equipment is representative of pumps that will be produced during normal operation. The panel also mentioned that testing only one pump of each type might not be sufficient. The panel believes that ESPs should operate reliably for three years in geothermal operations. Furthermore, they understand the difficulty in testing pumps over an extended period. An extended testing period delays evaluation and award of the prize. Extended testing will be expensive unless a geothermal operator is willing to absorb the operational costs as part of their production costs.

38

Conclusion of the Lemelson Meeting TIn the context of the prize goals, the meeting participants were successful in shaping the design parameters of a high temperature pumping system for geothermal environments. While there were numerous helpful discussions, a few which will continue to be resolved over the course of 2009 like testing, perhaps the biggest value of the day’s proceedings was the survival and strengthening of the prize concept as it made it through the gauntlet of geothermal experts in the room. If there was one criticism to be leveled on the organizers by themselves, it was recognizing that the field of experts participating were perhaps too geothermal centric. External experts from the electric motor sector and in the area of high-temperature electronics, for example, would have added value. Existing ESPs use motors wound by the pump companies. Yet the electric motor market extends well beyond this. The electric motor market is a $2.19 Billion annual proposition in North America alone. High temperature electronics is a topic of great interest and research in the defense and aerospace sectors as well as the automotive industry. As this project progresses, future technical meetings will purposely seek these types of external experts and, as planned, they will also be engaged in the context of recruiting teams to compete. Technical considerations also included how to structure the design and evaluation of the pumps both in a laboratory and a field setting as well as the test procedures required to evaluate the long-term performance of the pumps in a geothermal environment. After the technical discussions, the group explored the potential of the pump to assist in the deployment of additional geothermal resources, the types of partnerships most appropriate for the competition and the time scale for developing, testing and deploying pumps in the context of the competition. Individual phone interviews were also held post meeting with the attendees to solicit their feedback and design criteria. The issue of temperature (220°C) was consistently identified as too low. Currently, Woods Group and Schlumberger have low horsepower pumps that operate at 200°C in the field. Many felt that the pump industry could easily obtain 220°C. More importantly, operators and EGS experts stated their need of 250 or 275°C. Ultimately, EGS has targeted an upper limit of resources at 375°C.

39

It appears that working towards a target from the pump industry led to more conservative temperature numbers than if one solicited the insight from the electric motor industry. Literature reviews indicate that systems can operate up to their Curie Limit in the 700°C range. The challenge is hardening systems, fabricating them for diameters less than 12 inches, and creating electronics packages that can handle the temperature and pressure. An R&D Director for one of the pump companies stated that high-temperature applications for ESPs are less than half of one percent of total ESP sales. Given that small market position, they were unlikely to dedicate design and commercialization resources to such a challenge unless the market opportunity exceeded $100M annually. They estimated that an annual market of 100 to 200 pumps per year would be a market motivator, well within the aspirations of the prize initiative. Moving forward the project found and listed some of the Key Findings and Recommendations. These are in draft form and have not been endorsed by the participants of the meeting.

40

FINDINGS & Recommendations • Development and funding of a geothermal incentive prize focused on a robust down-hole pump should move forward. • In creating a prize, the goal must be a breakthrough technology that will allow geothermal to go beyond hydrothermal. This means allowing EGS to achieve commercialization. • Prize criteria should be open as possible allowing for creativity in designing technical solutions. • The only limiting criteria should be pump diameter so that systems can be deployed into 13 3/8 inch holes. • Diagnostic requirements should include vibration, temperature, and pressure. • Length of pump life is one of the primary points of interest to developers. • Power by pump companies is an interest, but a marginal challenge. • Temperature by pump companies is an issue of reluctance. • Temperature is of interest by scientists, industry specialists, industry advocates, and most importantly operators. • Non-issues for the challenge: deployment, power, sensors, cabling. • While at the meeting, a temperature of 220°C (435°F) was selected as the target; however, most participants individually felt that such a temperature was too low for both geothermal industry needs and in creating a stretch target to inspire innovation. • Manufacturers make high-temperature pumps (450C?) and high-power pumps (2000 Horsepower), but not in combined form. • Higher-temperature pumps are entering the market, but they do not have a sufficient power output that would stimulate the industry or meet projected EGS needs. • The high-temperature, high-power ESP market is too small to incite the necessary R & D by the major pump companies. • There are only three major pump companies currently offering geothermal pumps: 1) Baker Hughes Centrilift, 2) Schlumberger Redda, 3) The Wood Group ESP. Byron Jackson (Flowserve) operates in this arena, but only provides a narrow, 7-inch diameter pump. These companies currently wind and manufacture their own electric motors. • Major motor companies such as GE, Toshiba, and Siemens have high-temperature motor capacity but currently do not provide systems to the geothermal sector.

41

• In assessing the market potential for such a pump, it was widely believed among the panelists that other high- temperature pump users would also have interest in such a system and possibly offer a higher market potential. The bulk of these users would be in the oil and gas sector, such as Coproduced Fluids, SAGD, pipeline boosters and hightemperature oil wells. Moreover, innovation in high-temperature motors would reduce system size and cost, thereby creating commercial applications in electric cars, all electric naval ships, and high-altitude motor applications. • Levelized cost impact was considered the single most important determinant of the value of such a pump. Current estimates range widely from 0.5 to 2.0 cents per kWh (electricity). Further analysis is needed to narrow this band. • Setting a temperature range was more difficult than expected. The group agreed on a range from 200 to 220°C (with high power output). However, the industry is already offering 200°C systems. The system concern is the phase transition of polymers in the 225 to 250°C range. • Cable Deployed Pumps could offer significant savings. Such systems could be rapidly deployed and not rely on mobilized drill crews. The absence of tubing strings would reduce well development costs by ~$100K. • Testing protocols elicited the greatest concern of a pump prize. Use of a geothermal well site, lab testing, time of tests and energy were considered too expensive, complicated and difficult to access. For the targeted temperature range, there is no site developed today that would be available for protracted tests. • Thermal Quenching of pumps as a test protocol generated strong interest and concern. Thermal quenching significantly deteriorates a motor’s performance. The temperature differential and speed of the quenching are the two biggest concerns. Quenching a well is possible, but could destroy the well from rubbling in the open-hole section, and has limited impact on its output. However, the ability of a pump to recover is a great concern. • Initial quench tests should take place in surface testing so as to demonstrate resilience before any type of subsurface testing.

Not Discussed: • High-speed cavitation due to partial pressure of gases above 400°F. • Cable deployed pumps • Pumps in series • Other than electrical submersible pumps (see Box or whatever on the Sperry pump)

42

APPENDIX > LEMELSON MEETING PARTICIPANTS 01 > LEMELSON MEETING AGENDA 02

43

Appendix Lemelson Meeting Participants Jefferson W. Tester

Mike Tupper

H.P. Meissner Professor of

Executive Vice President

Chemical Engineering, Massachusetts

Composite Technology Development, Inc. (CTD)

Institute of Technology Randy Badger Pump Expert AmWest Inc.

Observers Charles Baron Associate, Climate and Energy

John Bearden

Google.org

Director R & D Engineering

Doug Blankenship

Baker Hughes Centrilift

Program Manager

Stephen (Steve) Breit

Sandia National Laboratory

Vice President

Kenneth Davies

Woods Group ESP

Associate

A.J. (Chip) Mansure

Google.org

Independent Consultant

Ray Fortuna

Sandia National Laboratories

Scientist

Randy Normann

U.S. Department of Energy

Geothermal Expert

Jeff Keller, PhD

Permatools

Manager, External Technology Initiatives

Randy Dorn

GE Global Research

Vice President

Patrick Maloney

Alta-Rock

Senior Program Officer

Michael Lindsay

The Lemelson Foundation

Co-creator

Alexandra Pressman

The Foundation for Geothermal Innovation Lawrence Molloy Co-creator

Secretariat International Geothermal Partnership for Technology

The Foundation for Geothermal Innovation

Subir Sanyal

John Pritchett

President

Scientist

GeothermEx

SAIC Paul Spielman

Facilitator

Manager of Operations Support

Joel Renner

ORMAT

Geothermal Consultant

44

Randy Badger is with AmWest in Winnemucca, Nevada. He has been working with high horsepower pumping applications for the past 20 years. His experience includes both lineshaft turbines and submersible pumps. His current work involves setting lineshaft turbines at depths exceeding 2,000 feet. His previous pump accomplishments have included the design and manufacture of narrow-diameter (2 inch) water pumps (lifting from a depth of 2,000 feet), lineshaft applications up to 1,200 horsepower, and the design and installation of multiple series booster pumps at depth within a singular well bore. In the geothermal field, Mr. Badger has sold and installed 1,000 horsepower units operating in 320°F (160°C) production wells. Currently, he is working on a downhole generator for use in injection wells at geothermal power plants. Charles Baron is an Associate working on Climate and Energy with Google.or g where he leads their geothermal efforts as part of Google's Renewable Electricity Cheaper than Coal (RE
45

Kenneth Davies is an Associate with Google.org, where he concentrates on geothermal and wind technology. Prior to joining Google, Mr. Davies worked at the economic and strategic consulting firm CRA International specializing in energy strategy, risk and valuation. His prior experience includes time at Cambridge Energy Research Associates, National Renewable Energy Laboratory, and Rocky Mountain Institute, where he began his work on energy efficiency and renewable energy under the tutelage of Amory Lovins. Kenneth holds a B.S. in Mechanical Engineering and M.Eng. in Operations Research from Cornell University and an M.S. in Environmental Studies from the University of Colorado at Boulder. Raymond Fortuna is a physical scientist with the U. S. Department of Energy’s Geothermal Technologies Program. He has been involved with geothermal energy since 1986 and has a Master’s degree in geology. He managed DOE’s Geopressured-Geothermal Research Program which flow tested highly pressured geothermal wells in Louisiana and Texas and the Geothermal Resources Exploration and Definition Program, a program to find and evaluate new geothermal resources in the western United States. He is currently managing R&D activities for the Enhanced Geothermal Systems Program at DOE. Jeff Keller manages external technology initiatives for GE Global Research. As a part of his role, he supports GE Energy Financial Services’ venture capital investment activities, as well as scouting promising early-stage technologies. His areas of interest and expertise include grid scale energy storage, enhanced geothermal, efficiency, biofuels, and waste heat recovery. He holds a PhD in Cell Biology from Vanderbilt University and was an Emmet Scholar at Cornell, where he received his MBA. Mr. Keller has a B.A. from the University of Virginia. Michael Lindsay has worked in and around the new venture space throughout the entirety of his career as a banker, entrepreneur, intrapreneur and consultant, with clients ranging from first-time entrepreneurs to the top executive tiers of multi-billion dollar enterprises. He has a rare, substantial understanding of how to design, build, and launch large incentive prizes as he was recently the Vice President, Prize and Program Development at the X PRIZE Foundation in charge of developing their prizes in energy, health, medicine, education and venture philanthropy. Michael is currently a Managing Partner at Proteus Environmental Technologies. He has a BA from Duke University and an MBA from the Wharton School.

46

Patrick Maloney is a Senior Program Officer at The Lemelson Foundation, a Portland, Oregon-based foundation that celebrates and supports inventors and entrepreneurs to strengthen social and economic life. Patrick focuses on the Foundation’s Technology Dissemination portfolio as well as its program-related investment strategy. As a consultant at Google.org, he was involved in managing investments that matched Google’s mission in climate change and international development. Prior to consulting, Patrick worked for Omidyar Network, making grants and investments in areas of microfinance and emerging technologies. Patrick entered the world of impact investing while at Barclays Global Investors, the world’s largest institutional money manager. Patrick began his career with the International Campaign to Ban Landmines, recipient of the 1997 Nobel Peace Prize. Patrick holds an MBA from UC Berkeley and a BS in International Politics from Georgetown University’s School of Foreign Service. A.J. (Chip) Mansure is retired from Sandia National Laboratories, where he worked in the Geothermal Research Department for 15 years. He has been a key person on several Sandia downhole geothermal instrumentation projects including the successful development and field-testing of two generations of Diagnostics While Drilling tools. The second generation was a 225°C tool. His participation included design, materials selection & testing, fabrication oversight, telemetry & display software, and field-testing. Dr. Mansure is experienced in what it takes to make a successful downhole geothermal tool. He has a PhD in Physics from Iowa State University. Lawrence Molloy is an engineer with over 15 years experience in scouting and developing clean technologies. Primarily, he has worked with EBARA Corporation, one of Japan’s largest machinery and environmental engineering companies. He has coordinated two U.S.-Japan water technology R & D projects as well as conducted technology evaluations and due diligence on flywheels, bio-fuels and clean water technologies. In the late 1990s, he served as EBARA’s liaison to the White House U.S. Japan Environmental Technology Partnership. He also participated on several NREL Industry Forums. He has been a member of the Clean Tech Network and the Environmental Export Council. Mr. Molloy was publically elected to the Port of Seattle, where he served as Commissioner. During his term, the Port had over 2,000 direct employees and a US$ 1.5 Billion capital budget. With the U.S. EPA in the early 1990s, Lawrence worked in the Strategic Planning and Management Division, where he was decorated for his work on Civil Rights and the environment. He has an M.S. in Engineering from Stanford University and attended Colgate University where he graduated with honors with a degree in Geology.

47

Randy Norman is with Perma Works. Mr. Norman received his undergraduate degree from the Oregon Institute of Technology and an MS EE&CS from University of New Mexico. Before starting his own geothermal technology company, Perma Works, Randy had been with Sandia National Labs for 23 years. He spent 14 years as lead investigator for High-Temperature Electronics and Fiber Optics for geothermal well instrumentation. Currently, he is working with others on the SAE- Aerospace Power Electronics Panel in writing Best Practices for Testing High-Temperature Electronics. Today, Perma Works markets the industries only 250ºC Barefoot geothermal well monitoring system with plans to introduce a permanent 300ºC well monitoring system. Alexandra Pressman works on the Geothermal Technologies Program's international portfolio. She is the Secretariat for the International Partnership for Geothermal Technologies. Ms. Pressman has experience working in the renewable energy sectors in the U.S. and Spain and has a special interest in addressing technical challenges through international collaboration. Posted at the Department of Energy’s Washington DC headquarters, and reporting directly to Director Ed Wall, she is a contractor with Sentech. She has a Bachelors Degree from Connecticut College. John Pritchett is with SAIC. John completed his formal education in physics at UC Berkeley in 1964. His primary expertise is the development and application of sophisticated computerized simulators to describe geothermal reservoirs. Mr. Pritchett has personally developed several state-of-the-art simulation programs to describe geothermal reservoir dynamics and related phenomena that are now in use around the world. He is a member of the Geothermal Resources Council (GRC), the International Geothermal Association, and the Geothermal Research Society of Japan. He is a recipient of the NRDL Gold Medal for Scientific Achievement and of the GRC’s Special Achievement Award. He serves on the Editorial Board of the international technical journal “Geothermics” and on the Board of Directors of the Geothermal Energy Association, the U.S. geothermal industry’s trade organization. Joel Renner (Facilitator) has spent most of his career working with geothermal energy. He was the geothermal lead at the U. S. Department of Energy’s Idaho National Laboratory (INL) from 1986 until his retirement in early 2008. He began his career with the U. S. Geological Survey (USGS) in 1970. He has participated in several USGS assessments of the geothermal resources of the United States. Mr. Renner holds a B.A in Mathematics from Carleton College and a M.Sc. in Geology from the University of Minnesota. A member of the Geothermal Resources Council, he has received their Joseph Aidlin Award. Mr. Renner is the first author of the Geothermal Energy chapter in the 2nd edition of the Society of Petroleum Engineers Handbook of Petroleum engineering.

48

Subir K. Sanyal is President of GeothermEx. Dr. Sanyal has worked as a reservoir engineer since 1969. His expertise includes project financing and management, economic analysis, property appraisals, reservoir engineering, numerical simulation and training of reservoir engineers. Dr. Sanyal joined GeothermEx in 1980 as Vice President and Manager of Reservoir Engineering Services, and became President of the company in 1995. Dr. Sanyal has a PhD in Petroleum Engineering from Stanford University, and a Master's degree in Petroleum Engineering from the University of Birmingham (England). He currently serves on the Board of Directors of the Geothermal Resources Council, and has served on the Board of Directors of Geothermal Energy Association and the International Geothermal Association. Paul Spielman is a Manager of Operations Support in the Resource Department of Ormat. His work includes managing the Operations Support Group; analyzing production trends; diagnosing well problems; designing well completions, pump installations, remediation work; and the planning and managing drilling operations. Paul’s career in the geothermal field has covered nearly a quarter of a century, with some of the industry leaders (Republic Geothermal, Mesquite Group, Cal Energy, Caithness, Schlumberger, and Ormat). He has worked on power projects ranging from 190°F co-produced oilfield brine, to 320°F pumped resources, to 660°F+ hot water and steam resources. Paul has a BSME from San Jose State and an MSME from San Diego State. Jefferson W. Tester is the David Croll Professor of Sustainable Energy Systems in the School of Chemical and Biomolecular Engineering at Cornell University. He is also the Director of the Energy Institute in the College of Engineering and Associate Director of the Cornell Center for a Sustainable Future, with special responsibility for the energy focus of CCSF. He is an expert in geothermal energy and supercritical fluids for green chemical synthesis. Until 2008, Tester was the H.P. Meissner Professor of Chemical Engineering at MIT (19802008), Director of MIT's Energy Laboratory (1989-2001), Director of MIT’s School of Chemical Engineering Practice (1980-1989) and a group leader in the Geothermal Engineering Group at Los Alamos National Laboratory (1974-1980). Mike Tupper is the Executive Vice President of CTD. CTD develops novel materials for harsh environments, including high temperature insulation. He has been intimately involved in the development, testing and manufacturing of composite materials for more than 20 years. Prior to CTD, Mr. Tupper earned a BS in Mechanical Engineering from Columbia University and is a registered Professional Engineer.

49

The February 11th, 2009 Lemelson Meeting Agenda 9:00

Welcome by Lawrence Molloy

9:05

Greetings by Patrick Maloney of the Lemelson Foundation

9:10

Introduction to Incentive Prize Design by Michael Lindsay

9:25

Introductions around the Room

9:40

Ground Rules and Goals by Facilitator Joel Renner

9:50

Identification of Limits/Discussion of Design Criteria • Diameter • Deployment • Flow Rate • Operation • Sensors • Efficiency • Power (AC, DC, VSD) and Parasitic Power • Cabling • Serviceability/Repair Time between Service • Cost • Manufacturability

12:30

Adjourn for Lunch

1:45

Recasting of Issues

3:00

Testing/Judging Protocols and Metrics

4:00

Market Assessment • This innovation would open up how many additional MW • This innovation would lower the production costs by how much • Identification of possible obstacles

4:30

Assorted Prize Development Open Questions

5:00

Partnerships Discussion • Rapid ID of possible teams, endorsing organizations, donors, sponsors, government agencies, locations, etc.

5:15

Conclusion (Renner, Molloy and Lindsay) • Wrap-up, commitments on draft, next steps

50

51

52