A Post-Audit of Geothermal Development in Californiaâ•Žs Imperial Valley

This paper presents a post-audit of a 1978 examination of economic impacts of geothermal energy development in the Imperial Valley Region of California. It is intended to demonstrate the usefulness of this approach in evaluating the validity of renewable resource development in general. The 1978 examination based its estimates on a projection of 4500 MW of electricity generation capacity developing in the Region by 2020, and identifi ed other applications for the geothermal resources as well (e.g., direct use as a heat source). It also projected signifi cant economic gains and a minimum of negative side-effects. Today, the geothermal electricity generating capacity is less than a quarter of what was projected. While projects currently in development could more than double this capacity by 2020, installed geothermal capacity in Imperial Valley would still fall far short of the 4500 MW originally predicted. We examine several possible reasons for the shortfall. These include economic viability issues of geothermal resources, technical problems with geothermal resources, cost to generate electricity from geothermal sources compared to price received for it, lack of adequate long-distance electricity transmission line capacity, and concern over negative side-effects. We fi nd that estimates of the amount of electricity generation capacity that can be supported by geothermal fi elds in Imperial Valley have been signifi cantly revised downwards. Further, recent electricity wholesale data suggest prices are often lower than the levelized cost of generation from geothermal. Constraints on the ability to export electricity out of Imperial Valley also appear to have been a factor limiting development.