Utilities putting new energy into geothermal sources

Tucked into a few dusty acres across from a shopping mall, it uses steam heat from deep within the Earth's crust to generate electricity. Known as geothermal, the energy is clean, reliable and so abundant that this facility produces more than enough electricity to power every home in Reno, population 221,000.

"There's no smoke. Very little noise," said Paul Thomsen, director of policy and business management for Ormat Technologies Inc., which owns the operation. "People don't even know it's here."

Geothermal energy may be the most prolific renewable fuel source that most people have never heard of. Although the supply is virtually limitless, the massive upfront costs required to extract it have long rendered geothermal a novelty. But that's changing fast as this old-line industry buzzes with activity after decades of stagnation.

Billionaire Warren E. Buffett has invested big. Internet giant Google Inc. is bankrolling advanced research. Entrepreneurs are paying record prices for drilling leases in places such as Nevada, where they're prospecting for heat instead of metals.

"This is the new gold rush," said Mark Taylor, a geothermal analyst with the consulting firm New Energy Finance in Washington. He credits high fossil fuel prices and concerns about global warming with jump-starting the U.S. industry, along with federal tax credits and state laws mandating the wider use of renewable energy.

Global investment in geothermal was around $3 billion last year, Taylor said. Although that's a blip compared with the estimated $116 billion funneled into wind and solar, it's still a 183% increase over investment in 2006. In a difficult year for alternative energy funding, the industry snagged $600 million through the first six months of 2008, Taylor said.

A lot of that new investment is in the United States, the world's leader in geothermal energy. More than 80% of the country's 3,000 geothermal megawatts lies in California. The Geysers, a network of 22 geothermal plants about 75 miles north of San Francisco in the Mayacamas Mountains, is the largest geothermal complex on the planet. Calpine Corp. owns the largest part of it.