San Diego utility agrees 25MW geothermal power deal

April 1, 2010

One of the largest geothermal power facilities in the world, Calpine's Geysers site offers a total 725MW of generating capacity

California utility San Diego Gas & Electric (SDG&E) has signed a four-year deal to source 25 megawatts of renewable electricity from a geothermal project in the north of the state.

It said on Tuesday it had signed the power purchase agreement with Calpine Corporation subsidiary Calpine Energy Services, LP, to buy power from the Calpine Geysers facility in Middletown.

The Geysers facility is a complex of 15 geothermal power plants that draw steam from more than 330 wells located in the Mayacamas Mountains, about 70 miles north of San Francisco.

Houston-based Calpine owns a total of 725MW of installed capacity at the Geysers site, which it describes as the largest geothermal power-producing site in the world.

“Reliable base load”

Alex Makler, vice president, strategic origination, for Calpine Energy Services, said: “This is another example of how we can help our customers meet their needs for clean, renewable power by providing them with reliable base load geothermal generation from our plants at The Geysers.”

The PPA with SDG&E runs through 2014, and will deliver 200 gigawatt-hours of energy each year, enough to cope with the demand of 15,000 households.

The project will take the utility’s renewable energy portfolio to 14% in 2010, the company said. Californian utilities are all aiming to supply 33% of their power from clean sources by 2020, under the state’s Renewable Portfolio Standard.

Matt Burkhart, vice president of electric & fuel procurement for SDG&E, said: “SDG&E is committed to developing new sources of green energy for our customers and to meeting the state’s aggressive renewable goals.”

The utility, which supplies energy to 3.4 million consumers in San Diego and southern Orange counties, faces a 20% target for this year, but said it will be complying with the 2010 goal through the state’s flexible compliance mechanism. This allows utilities to buy Renewable Energy Certificates or borrow from future years’ quotas to top up their numbers. Trading of certificates, which was added into California’s RPS scheme earlier this month, is limited to 25% of a utility’s target amount.