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Global Futures Report 2013 - Geothermal

59 wide range of applications, is still relatively expensive." In the long term, Greenpeace expects that favorable electricity production costs will be achieved by using wood gas both in micro CHP units and in gas-and-steam power plants, and says, "there is [also] great potential to use solid biomass for heat generation in both small and large heating centers linked to local heating networks.”48 Hydropower Hydropower has been a mature technology for decades, and sce- narios like GEA (2012) show stable costs for hydro in the future. As noted in Chapter 2, the storage inherent in most hydro- power provides capacity for managing variable renewables on power grids. Many projections show continued market growth for all forms of hydro, particularly in developing countries.49 (See Table 4 on page 53 and also Chapter 5 for many country- specific projections.) Many experts foresaw an expanding future role for pumped hydro- power, particularly as a form of energy storage to balance variable renewables, including using rapid-reaction turbines and variable- speed pumps. NREL (2012) notes that: “Pumped-storage hydro- power is considered a mature technology. However, incremental improvements in efficiency are possible, and the flexibility of exist- ing and future plants may be improved using variable-speed drive technologies. Other possible developments include use of saltwater pumped-storage hydro facilities in coastal regions and underground pumped-storage hydro.” IEA ETP (2012) similarly notes that new projects or retrofits are incorporating variable-speed pumps that increase the ability of pumped hydro to provide grid flexibility on shorter time scales.50 REN21 (2012) shows 130 GW of pumped hydro capacity globally in 2011, more than one-third of this in Europe. REN21 also notes that Europe plans an additional 27 GW by 2020, that the United States has 34 GW under permit, and that China increased its five-year plan (2011–2015) target for pumped hydro to 80 GW. IEA ETP (2012) notes that historically, pumped hydro could be justified economi- cally by arbitrage in daily electricity price spreads, but that in recent decades, natural gas has reduced spreads such that, “at present, energy arbitrage, the traditional driver for investment in pumped hydro, does not stand up in market conditions.” However, IEA ETP (2012) also shows pumped hydro levelized energy costs, at about 12 cents/kWh, to be significantly less than other storage options like batteries. GEA (2012) shows pumped hydro costs in the range of 3–9 cents/kWh.51 Geothermal Geothermal is considered a mature technology. REN21 estimates current geothermal power costs at 6–11 cents/kWh. Some sce- narios do show future declines in costs with technology improve- ments. For example, Greenpeace (2012) shows geothermal power costs declining from 15 cents/kWh today to 9 cents/kWh by 2050. Greenpeace says: “[Geothermal electricity] was previously limited to sites with specific geological conditions, but further intensive research and development work has enabled widened potential sites. In particular the creation of large underground heat exchange surfaces—EnhancedGeothermalSystems(EGS)—andtheimprove- ment of low temperature power conversion, for example with the Organic Rankine Cycle, could make it possible to produce geother- mal electricity anywhere. Advanced heat and power cogeneration plants will also improve the economics of geothermal electricity. As a large part of the costs for a geothermal power plant come from deep underground drilling, further development of innovative drill- ing technology is expected.”52 Ocean Energy Market projections for ocean energy are difficult because the tech- nology is still not commercial. By 2011, a handful of projects were in operation around the world, notably in France and Korea, and the ocean energy industry appeared poised for full commercial-scale development. Some experts offered the possibility of future break- throughs. GEA (2012) shows ocean energy costs of 9–38 cents/ kWh in 2009, depending on the technology, and projects potential declines in the future to 6–20 cents/kWh for ocean-thermal power (OTEC), 9–30 cents/kWh for tidal power, and 8–30 cents/kWh for wave power.53 Greenpeace (2012) sees potential for lower costs in the coming decades: “The cost of energy from initial tidal and wave energy farms has been estimated to be in the range of 25–95 US cents/ kWh, and for initial tidal stream farms in the range of 14–28 US cents/kWh. Generation costs of 8–10 US cents/kWh are expected by 2030. Key areas for development will include concept design, optimization of the device configuration, reduction of capital costs [with] alternative structural materials, economies of scale, and learning from operation.… In the long term, ocean energy has the potential to become one of the most competitive and cost effective forms of generation.”54 06

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