Salton Sea geothermal plant canceled by Warren Buffett’s Berkshire Hathaway Energy

2017-08-16

Excerpt:

Beneath the southern shore of the Salton Sea lies a reservoir of mineral-rich water, heated to temperatures as high as 700 degrees Fahrenheit by the Earth’s natural heat. The area’s geology allows that heat to rise near the surface, creating one of the world’s most potent geothermal energy hot spots. Eleven power plants, 10 of them operated by CalEnergy, already convert a portion of that geothermal potential to carbon-free energy, using steam from the super-heated brine to turn turbines and generate electricity.

But even as renewable solar and wind power have boomed in California, the geothermal industry has lagged. The high up-front costs of building a geothermal plant have kept investors at bay, with only one new plant opening in the Salton Sea area since 2000.

CalEnergy, which is owned by Warren Buffett’s Berkshire Hathaway Energy, asked the California Energy Commission earlier this summer to terminate the license for Black Rock.

Dennis Kaspereit spent 10 years as CalEnergy’s director of geothermal resources and now works at the Geothermal Resource Group, a Palm Desert-based consultant. He said Black Rock faced the same headwinds as all geothermal projects in the region — the difficulty of securing financing and a power purchase agreement with a utility.

But a couple of other developments are either in the pipeline, or peeking from behind the fence waiting for financing to pop up:

Other developers are still trying to build new power plants at the Salton Sea.

An Australian company called Controlled Thermal Resources is doing seismic testing for a massive geothermal plant known as Hell’s Kitchen, with plans to drill exploratory wells this year and start construction by 2019. Controlled Thermal doesn’t have financing yet, a key hurdle before construction can begin. But the firm has partnered with a startup that claims to have developed technology to extract lithium— a valuable mineral used in batteries for electric cars, cell phones and laptops — from the brine that flows through the pipes of Salton Sea geothermal plants. If that technology can make lithium extraction economically viable, it would make Hell’s Kitchen a lot more attractive to investors.

A prior incarnation of the lithium startup, Simbol Materials, failed dramatically in 2015, abruptly firing the vast majority of its staff — but not before drawing a $325-million purchase offer from Elon Musk’s Tesla Motors, which ultimately fell through. Musk’s willingness to make that offer could be a sign that the company’s technology is viable, even if Simbol couldn’t work out the finances.