ALC Helps Advance Renewable Energy Through Geothermal Resources
Welcome back to Build Your Dream.
One of the most important underlying goals here at American Lending Center is investing in ways to help solve the world’s problems. We’ve put that into action with supporting healthcare facilities in rural areas, cutting-edge approaches to growing more food with less environmental impact and alternative energy sources that are renewable and fighting climate change.
Geothermal Resources
Geothermal energy has been around for centuries. It’s simply the heat from the Earth’s core coming to the surface in a variety of ways.
Geothermal can manifest itself naturally – steam rising from geysers and heating mineral hot springs provided us with evidence of the power underneath the ground long ago. There are really hot spots and those that are not so hot.
Geothermal heat pumps for individual homes or buildings can be found almost anywhere – that process uses the temperature difference in the first 10 feet or so of ground to heat or cool buildings on the surface.
But the type of heat necessary to generate electricity is really based on location. Spots where the temperature is high enough to run steam turbines are usually located close to tectonically active regions where hot water and/or steam is carried to the Earth’s surface or can be accessed at shallow depths.
It is also where most volcanoes are located, which makes sense. Those are areas where magma has risen closer to the Earth’s surface. One of the most active geothermal areas in the world is called the Ring of Fire, which encircles the Pacific Ocean.
Technology Works
As a renewable resource, geothermal covers a significant share of electricity demand in countries such as Iceland, El Salvador, New Zealand, Kenya and the Philippines, and meets more than 90% of heating demand in Iceland.
Geothermal resources were first used successfully to generate electricity in 1913. Between 2010 and 2020, the cost to generate electricity from geothermal ranged from 4.9 cents to 8.5 cents per kilowatt hour.
But the upfront costs to set up a geothermal power plant can be expensive. In addition to the plant itself, drilling is required to tap the hot water or steam trapped deep underground. The geothermal rule of thumb is “the deeper you go, the hotter it gets.”
In 2023, the United States had geothermal power plants in seven states, which produced about 0.4% (17 billion kilowatt-hours) of total U.S. utility-scale electricity generation. California is the literal hot spot for geothermal electricity generation, with 66.6 percent of the country’s electricity generation. Still, that’s only 5.1 percent of the state’s total electricity generation.
Lots Of Pluses
Geothermal energy is literally there for the taking, if you are in the right place. It is constant, too, unlike solar or wind power – it works 24/7 as long as the equipment is working.
Like solar and wind, geothermal is a renewable energy source in the sense that the Earth continues to generate heat at its core, and seeks ways to release it. There is some concern that underground water reservoirs could be depleted, but that can be managed much like groundwater basins are managed.
For example, the Geysers dry steam reservoir in northern California is the largest dry steam field in the world and has been producing electricity since 1960. In order to maintain the necessary deep-water supply, a complex plumbing system uses recycled wastewater from several nearby towns to replenish the reservoir.
Looking To The Future
Geothermal is only a part of the complex renewable energy equation. But it also has great potential to take the burden off the demand in many areas.
For example, a geothermal heat pump system for a home or commercial building can replace both a heater and an air conditioner, and take that building “off the grid.” Did you know that the office and community room complex at the historic site Rancho Los Alamitos in Long Beach has been using a heat pump for more than a decade? Such systems are expensive to install, but savings can pay that amount back in 10 to 15 years, experts say.
The International Renewable Energy Agency is working with the Global Geothermal Alliance to support geothermal energy generation and promote advances in technology. That’s a big deal.
And ALC, along with our partners X-Caliber Rural Capital, recently completed a $100 million bridge loan to support development of a next-generation geothermal project in Utah. That’s for the first phase of a multi-phase project that will ultimately produce 400 MW around-the-clock power.
That’s how to Build Our Dream.
John Shen
CEO & co-founder
American Lending Center
About American Lending Center: A Financial Times (FT) Americas’ Fastest Growing Company
American Lending Center (ALC) supports U.S. economic growth and job creation by financing development across the country.
Since its inception in 2009, ALC has proudly provided over $1.65 billion in loans and investments to thousands of companies of all sizes, empowering them to grow and thrive. Over this time, we have helped create and/or retain more than 100,000 jobs in the American economy.
In 2022, ALC launched its new rural construction and development fund, with capital available for the construction of fixed assets of all types in rural areas, including manufacturing, energy, infrastructure, hospitality, specialty use, multi-use, and other project types. Follow American Lending Center on LinkedIn, Facebook, and Twitter.
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