Calpine to pump up its geothermal power source

The overhaul of the Geysers geothermal project, expected to cost $75 million in its first year, is evidence of the strong demand for cleaner energy in California. It is spurred by legislation aimed at reducing greenhouse gas emissions, which is pushing utilities to ramp up their use of energy from water, wind and sun.

Under goals set by the California Public Utilities Commission, Pacific Gas & Electric Co., Southern California Edison, San Diego Gas & Electric Co. and others must get 20% of their electricity from renewable sources by 2010.

In recent months, Edison signed the largest wind energy contract by a U.S. utility and agreed to a new, 10-year contract with Calpine for 225 megawatts of geothermal power from the Geysers. Calpine, one of the nation's largest wholesale power sellers, also has a new, long-term contract to provide geothermal power to PG&E, California's largest electric utility.

"The Geysers has not seen a huge infusion of capital into it for many years

The Geysers expansion represents a departure for the San Jose-based power producer, which has been selling power plants and other assets since it fell into bankruptcy protection in late 2005. And it comes at a time when it is strapped for cash.

"I'm very excited and really proud of Calpine

Bernadette Del Chiaro, clean-energy advocate at advocacy group Environment California, said she applauded Calpine's plans to draw more power from the Geysers, which naturally produces steam from hot rock formations deep underground.

"Geothermal is a terrific, clean, renewable resource that should be expanded," she said. "It's a no-brainer to tap into the immense energy that we have just under the earth. And it's 24-7, it's not intermittent, so it's a crucial piece to have in the mix."

Gilles, who has worked at the Geysers since 1987, said Calpine's five-year expansion plan included drilling as many as 80 new wells, adding more water-injection systems to rejuvenate existing wells, and replacing or rebuilding steam turbines, cooling towers and generators on some of the existing power plants. The project would add as many as 80 megawatts to the current output of 725 megawatts and would breathe new life into plants that provide 147 megawatts.