Developing New Mexico’s Geothermal Heat and Electricity

Jan 12, 2023

(updated Mar 5, 2023)

Senator Gerald Ortiz y Pino

Tom Solomon

Shari Kelley, PhD

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EAVOR 12min geothermal explainer video

Agenda: Developing NM Geothermal

• Geothermal overview & goal
• Geothermal development bill
• Development opportunities
• Questions and answers

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link

Why Geothermal Heat

Energy & Electricity?

• Clean, zero emissions source of heat & electricity
• A world-class 24x7 power source in New Mexico
• May provide “last 10%” of clean energy transition
• Sustainable economic development for NM
• Re-use skills & drilling rigs from the oil industry.
• A ‘just transition’ for workers - drill for heat

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link

Geothermal Working Group

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Meeting biweekly since Feb 2022

• Senator Gerald Ortiz y Pino
• Senate Pro Tem Mimi Stewart
• Senator Bill Soules
• Tom Solomon, facilitator
• Sanders Moore
• Abbas Akhil
• Dr. Shari Kelley, NM Tech
• Dr. Olga Lavrova, NMSU
• Dr. Patricia Sullivan, NMSU

Geothermal Goal

Our goal - Pass a geothermal energy development bill for 2023 to support the two-phase development of geothermal (GT) energy in New Mexico:

Phase 1) In the 2020’s expand known existing geothermal resources: heat pumps for buildings, in green houses, hot springs & spas, for clean electricity (Lightning Dock), etc.

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Phase 2) promote longer term development of advanced geothermal electricity to provide the final 10% of clean NM grid electricity through the 2030’s: 1 to 3GW.

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Geothermal Energy: Using Earth’s Heat

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The temperature in the inner core is ~5,200°C or 9,392°F

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Five miles underground it can be 204°C or 400°F *

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Temps can be higher at shallower depths where the crust is thinner.

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* Well above boiling temp of water, ie 212°F at sea level.

https://earthscience.stackexchange.com/questions/240/is-the-earths-hot-inner-core-necessary-for-life

https://education.nationalgeographic.org/resource/core

NM Ranks #6 in Geothermal Resources

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https://www.nrel.gov/gis/geothermal.html

NREL map at depths of 3km-10km (~10k to 33k ft)

Rio Grande rift heat source

• Extension associated with the Rio Grande rift causes thinning of the crust, upwelling of hot mantle, and elevation of subsurface temperatures along the Rio Grande corridor.
• Thinning also occurs in the Basin and Range of SW NM.

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LA RISTRA seismic experiment

Interpreted cross sectional view

Gravity-driven system, Socorro

• Precipitation percolates into the subsurface, where it is heated by elevated temperatures associated with the Rio Grande rift extension.
• Heated groundwater moves back up to the surface along rift-related faults.

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Precipitation flow

NM Regions of Known or Potential Geothermal Resource (USGS)

https://my.usgs.gov/eerma/data/index/4f4e483ce4b07f02db4f1bb8

https://my.usgs.gov/eerma/data/index/4f4e4a63e4b07f02db637aab

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Lightning Dock

Lightning Dock

Both the high temperatures (>125°C) estimated at 3 km and the location of known resources are generally associated with extension in the the Rio Grande rift/Basin and Range.

Types of Geothermal in Phase 1

Ground source heat pumps for buildings

Hot springs & spas,

like Jemez Springs

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Eavor video https://www.youtube.com/watch?v=PtQmGPmyLA0

Phase 1: Expand known existing geothermal resources

Geothermal Electricity in Phase 1

Traditional geothermal electricity generation

uses existing underground hot water.

Ex:

Lightning Dock

Geothermal electricity is cost competitive today with natural gas. �(Lazard 2021)

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*Gas CC $60/MWh, GT $75 https://www.lazard.com/perspective/levelized-cost-of-energy-levelized-cost-of-storage-and-levelized-cost-of-hydrogen/

Eavor video https://www.youtube.com/watch?v=PtQmGPmyLA0

Geothermal in New Mexico Today

• Masson Farms: 2nd largest GT greenhouse in US
• 20 acre GT greenhouse complex in Radium Springs
• Geothermal saves 93% on heating bill. Employs ~200

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• Lightning Dock electric plant near Lordsburg
• 15 MW geothermal electric generation for PNM

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• 29 hot springs in New Mexico
• Ex: San Antonio Hot Springs, Jemez Springs, Gila �Hot Springs, Black Rock, Faywood, Ojo Caliente, etc.

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• AmeriCulture aquaculture farm near Lordsburg
• Tilapia fingerlings aquaculture farm w/ GT heating �from a 400 ft well

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• Ground source heat pumps for buildings
• Several known school facilities in APS and RRPS & the Abq Simms bldg

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Hot springs map

A Geothermal Resource Development Bill

SB8, Senator Ortiz y Pino, sponsor

Amend New Mexico’s geothermal (GT) energy statutes to promote developing New Mexico’s geothermal resources and further NM geothermal research. SB8 would:

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• Appropriate $0.6M to add capacity to the ECMD* GT office, the State’s geothermal central authority, and amend their duties to include applying for federal grant money, plus:
• Administer a newly created $10M geothermal grant fund and a $15M geothermal revolving loan fund
• Assist geothermal grant and loan applicants to apply for other state economic development incentive programs including LEDA, TiDDs, IRB’s etc.
• Fund a NM-Tech geothermal center of excellence for GT programs and a GT consortium.

In a companion Geothermal Tax Incentive bill, SB173, add incentives for geothermal electricity development such as energy generation income tax credits.

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• SB45 would provide tax credits for ground source heat pumps (Soules)
• Encourage use of heat pumps for new government buildings.

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Note: *ECMD is the Energy Conservation and Management Division within EMNRD

Geothermal Development Bills Passed in 2023

Sen. Ortiz y Pino & Rep. Roybal Caballero, Sen. Soules

A. HB365, Geothermal Center and Fund (funded in HB0002FC1, the Senate amendments to HB2).

• Creates the "geothermal projects development fund" and the "geothermal projects revolving loan fund” w/o funding.
• Need to restore $10M + $15M funding in the 2023 LFC interim and 2024 session.
• Expands EMNRD geothermal (GT) duties to: apply for federal geothermal grants; administer the geothermal grant & loan funds and ensure all GT grants and loans also use available state economic development incentive programs. �Use $250k of funds on p.199 Section 5 item 77 of HB0002FC1
• Creates a Geothermal Research Center of Excellence at NM Tech (w/$400k o p225 Sec 5, item 234 of HB0002FC1).

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B. SB173, Geothermal Energy Generation Tax Credits - in sections 26, 27 & 28 of the HB547 tax bill

• Creates a geothermal electricity production tax credit of $0.015 per kWh for geothermal electricity generation facilities prior to Jan 1, 2028 with an aggregate annual cap of $5M which applies to personal and corporate income taxes.
• Creates gross receipts tax deduction for geothermal electricity generation facility construction costs prior to Jan 1, 2028.

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C. SB45, Geothermal Ground Coupled Heat Pump tax credit - in sections 30 & 31 of the HB547 tax bill

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• 30% tax credit, up to $9000, of the purchase and installation costs of a system installed before Dec 31, 2028, with an annual aggregate credit cap of $4M.

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note

Over $584 M in GT Federal Funds

• $84M for geothermal energy in the Infrastructure Investment and Jobs Act

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• $500M for “Clean Energy Demonstrations on Current and Former Mine Land”.
• Up to five clean energy projects (including geothermal) in geographically diverse regions.�
• DOE announced a Notice of Intent to issue a Funding Opportunity Announcement (FOA) entitled "Onsite Energy Technical Assistance Partnerships" that includes geothermal development. The closing date for applications will be March 23, 2024. �
• Updates in this living Inflation Reduction Act opportunities doc

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https://static1.squarespace.com/static/5924f2cf6a49635bbfd9b7a1/t/611fb3ebeafded3e4712082d/1629467647015/HR+3684.pdf

Some GT Development Opportunities

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• Zia Pueblo DOE study 2012-2013
• Mesa del Sol integrated cascading community GT development
• Revive 1980’s NMSU geothermal projects

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• NMTech campus district heat proposal of 2010
• Expand Lightning Dock geothermal electric plant
• ‘Well of opportunity’ on Navajo land: a pine seedling greenhouse
• Low grade heat (129°F-180°F) for drying chile, onions, etc
• Revisit 1980’s Jemez Springs attempt to develop hydrothermal

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For phase 1

Zia Pueblo 2012-13 Geothermal Study

The Pueblo of Zia (also referred to as "Zia Pueblo") conducted a comprehensive feasibility study for best-use application(s) for development of renewable energy resources on its tribally held TRUST lands (i.e., Trust Lands of Zia Indian Reservation). The feasibility study is essential for determining the technical and economic viability of a future renewable project(s) on Zia tribal lands, including the potential economic and environmental benefits for the Tribe.

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Geothermal Energy Potential: Site 1 presents the best potential geothermal site from a strictly geologic point of analysis. This site will require the highest up front drilling cost, and delivers the best economics at a levelized cost of $79.90/MWH. Site 3 is the second best site with a levelized cost of $106.20/MWH.

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https://www.energy.gov/indianenergy/pueblo-zia-2012-project

About 20 miles north of Albuquerque

Mesa del Sol Geothermal - Jim Witcher

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link

Concept demonstrating four cascading benefits of geothermal development.

Mesa del Sol is a development south of the Albuquerque Airport

• Clean Electricity Generation (rough estimates)
• 4-5MW clean electricity generation from a 13k ft well w/300F GT water from the “Santa Rosa sandstone” formation. Need ~1000 gal/min at 300F for a 5MW plant. Drilling costs $6-8M per well from site prep to completion over 1-2 months with a very large drilling rig. Need two wells, one for production, one for re-injection, costing $12-16M.
• Add $3M per MW, ie $15M to build a 5MW plant. Say $30M total up front investment.
• Might site 2-3 of these plants depending on available geothermal water flow, tbd.

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• Geothermal district heat for Mesa del Sol like Reykjavik
• Use outflow water from the heat exchanger before re-injection, �to heat homes and businesses (eg Netflix).

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• Industrial processes using low grade heat
• For greenhouses
• Ideas include drying chilis, onions. pistachios, adobe �making, Ag products need 54C-82C (129F to 180F).

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• Hot Springs/Spa tourism using outflow water

NMSU Geothermal Project

• Between 1973 and 1979, NMSU experienced a >400% increase in the cost of natural gas. (somewhat similar to recent raising costs for energy worldwide).
• An appropriation from the New Mexico Legislature provided funds for the design and construction of the NMSU Campus Geothermal Project ¹

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• NMSU Geothermal Projects provided domestic hot water and space heat to dorms, athletic facilities and academic buildings.
• In 1994, the Geothermal Aquaculture Facility (GAF) was built.
• By 2015 all wells were decommissioned.

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[1] Cunniff, et al., 1983

(1979 to 2015)

Phase 2: Adv. Geothermal Electricity

• Advanced geothermal (AGT) electric generation

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• Last 10% of clean energy transition

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• Build 1-3 GW of advanced geothermal electricity into 2030’s

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• Need to solve two drilling tech problems: drill bits to survive higher temps & drill through harder rocks.

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Geothermal Phase 1 & 2 - AGT

Advanced Geothermal electricity generation.

Drill closed loops in underground hot rock. Inject a surface fluid to extract heat from a subsurface radiator. Transfer that heat at the surface through a heat exchanger to a working fluid in a separate loop to drive an electric turbine.

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Eavor video https://www.youtube.com/watch?v=PtQmGPmyLA0

Phase 1&2: Advanced Geothermal

Power plant at the surface

organic rankine cycle

Does NOT require an underground water source

subsurface radiator

Sandia Labs Geothermal Research

• Computational modeling
• Enhanced Geothermal (EGS) collaboration
• Energetic simulation - drilling test rig
• Geothermal Energy and Drilling Technology
• Hard rock drilling facility
• High temperature electronics facility
• HOT High Operating Temperature facility

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https://energy.sandia.gov/programs/renewable-energy/geothermal-research/

Sandia’s work in subsurface access, monitoring, and modification of the subsurface is aimed at the development of enabling technologies and reducing the cost and risk associated with drilling in harsh, subterranean environments.

A large portion of the cost and risk of generating electricity from geothermal sources is associated with drilling and completion of wells. Because of this, Sandia has primarily focused on developing improved drilling and completion technologies such as diagnostics while drilling, high-temperature electronics, advanced drill bit technologies, and wellbore integrity technologies to reduce and mitigate problems associated with loss of circulation.

Top Geothermal Energy Startups

Eavor Country: Canada | Funding: CA$85M

Eavor's solution, Eavor-Loop, takes a traditional niche energy source (geothermal) and makes it scalable by removing the need for either volcanic-type temperature or permeable aquifers.

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GreenFire Energy - USA | Funding: $2.6M

GreenFire Energy develops and deploys innovative technology to unlock the world’s largest source of continuous renewable energy.

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Sage Geosystems - USA

Sage combines innovative approaches to heat harvesting with modern oilfield expertise and methodologies to enable geothermal energy anywhere in the world

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Fervo Energy - USA | Funding: $166M

Fervo Energy commercializes proprietary technology to own, develop, and operate geothermal assets as the dispatchable foundation to a 100% clean energy future.

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Quaise - USA | Funding: $58M

Quaise is an energy company pioneering millimeter wave drilling technology to access deep geothermal energy.

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AltaRock Energy - USA|Funding: $36.5M

ARPA-e project AltaRock Energy focuses on the development of geothermal energy resources and Enhanced Geothermal Systems (EGS).

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Tetra Corp USA drilling w/ pulsed power

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https://www.energystartups.org/top/geothermal/

We’ve spoken to Fervo and Eavor

Eavor

Demonstration well to advance technology to enable economic drilling in deeper and higher temperature rock. Drilling began in Aug 2022.

This well will showcase Eavor’s proprietary drilling technology and will demonstrate all the components required to construct commercial Eavor-Loops in deep, hot rock.

This is a key milestone that unlocks projects at locations in the US, Europe, and internationally.

• Local energy resilience
• Local energy security
• Local energy autonomy
• Scalable
• Firm

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Source: McKinsey

The raw materials challenge: how the metals and mining sector will be at the core of enabling the energy transition, 2022

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https://www.eavor.com/press-releases/eavor-to-drill-the-deepest-and-hottest-directional-geothermal-well-in-history-eavor-deep/

Eavor is currently drilling the deepest and hottest directional geothermal well in history: Eavor-Deep™ at Lightning Dock, NM

Summary

• New Mexico is #6 in geothermal resource potential
• It’s clean energy for heat & electricity and a worthy investment for sustainable economic development
• Leverages skills & rigs from the oil industry
• Over $500M in federal funding to apply for
• We request your support for a 2023 geothermal development bill to better develop this NM resource.

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link

Backup

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link

Geothermal energy use at NMSU (1979-2015)

•District heating: heating of a total of 30 building and facilities that include dorms and athletic facilities. Supply temp. is 141 to 148F at 250 gpm. Campus geothermal system has an annual energy savings compared to natural gas up to several hundred thousand dollars annually depending upon annual climate, the cost of fossil fuel and maintenance costs for the geothermal system.

•Geothermal Greenhouse Facility(GGF): Two 6,000-ft2 greenhouses and a 2,400-ft2 metal storage space, office and workshop comprise the GGF. Water is supplied at 148 F between 25 and 60 gpm

•Geothermal Aquaculture Facility (GAF): Two large 6,000-gallon capacity intensive culture systems simulate commercial level production. Geothermal heating is done by cascading a maximum 25 gpm of geothermal water from the GGF bench top heating system to the aquaculture facility. Cascaded hot water arrives at the heat exchanger at 90 to 135F for heating culture water in a closed loop fashion.

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Geothermal Greenhouse synergy

• A development proposal: Build a greenhouse to grow pine seedlings. Heat with geothermal hot water. May desalinate water for irrigation.
• A ‘wells of opportunity’ USDA application by Dr. Shari Kelley. Re-use an old oil well in San Juan Basin, 5k-6k ft deep, with 70°C (160°F) water, very high volumes.

• Possible desalination tech to clean up produced water for irrigation. Could add solar to offset electricity costs, with bigger pumps. The location is 1.5 mi from the Ojo Encino Navajo chapter house.
• Would use GT to both heat the greenhouse and also to purify water for irrigation. The thermal membrane tech is still at lab scale.
• Contact Laila Sturgis at Navajo Tech, Crownpoint.

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link

Ojo Encino

Cuba

2010 NM Tech Geothermal Proposal

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Cost of Geothermal Electricity is

Competitive with Gas

Today’s geothermal electricity competes on cost with natural gas.

• The “all-in” or lifetime levelized costs of energy (LCOE) including construction, fuel, labor, maintenance, etc, show today’s geothermal electricity is cheaper than coal or nuclear, but costs more than solar or wind. (per Lazard 2021)
• GT energy is more or less competitive with natural gas, depending on gas pricing.

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Average cost per MegaWatt hour (LCOE per Lazard 2021)

• Solar PV= $36
• Wind = $38
• Gas combined cycle = $60 (when natural gas was $3.45/MMbtu. Gas on 16-Sept was $8.00)
• Geothermal = $75
• Coal = $109
• Nuclear = $168

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https://www.lazard.com/perspective/levelized-cost-of-energy-levelized-cost-of-storage-and-levelized-cost-of-hydrogen/

Eavor

75m spacing between adjacent Eavorloop radiator loops allows for a 30 year lifetime.

This is enhanced by positioning the injection and return paths close together.

Source: McKinsey

The raw materials challenge: how the metals and mining sector will be at the core of enabling the energy transition, 2022

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https://pangea.stanford.edu/ERE/db/GeoConf/papers/SGW/2022/Beckers.pdf

https://youtu.be/TefNuJnCRs8

Eavor is currently drilling the deepest and hottest directional geothermal well in history: Eavor-Deep™ at Lightning Dock, NM