COSO GEOTHERMAL in Play With Just the Facts (UPDATE JUNE 14, 2022: Coso Geothermal Joins DWR Facilitation Stakeholder Group)

“Coso Geothermal is arguably the most valuable asset on the high Mojave Desert”

Update: June 13, 2022

Naval Air Weapons Station China Lake, California

Coso Operating Company LLC has joined a DWR Facilitation Stakeholder Group together with the Ridgecrest Area Association of Realtors and the IWV Economic Development Corporation.

For more information:

Coso Geothermal, Indian Wells Valley California

In the eastern portion of central California, on the military-owned Naval Air Weapons Station at China Lake, the Coso Geothermal Field has been producing geothermal power continuously since 1987 (Figure 1). The project is fully financed by private investment, and a prime example of industry-military cooperation in power development. The Geothermal Program Office (GPO) manages the military geothermal program at China Lake. The GPO is a part of the U.S. Navy, but has jurisdiction over exploration and development of geothermal resources on all military-owned land. The governing policy states that no development will proceed if the military’s mission is found to be adversely effected. 

Coso Geothermal Area | Open Energy Information (openei.org)
Coso Geothermal Area | Open Energy Information (openei.org)

Congressman Kevin McCarthy Retains Funds for Local Water Security Initiatives

On July 26, 2018, the House of Representatives passed the Conference Report for the Fiscal Year 2019 National Defense Authorization Act with Congressman Kevin McCarthy’s support by a vote of 359 to 54. 

Section 313 of the Conference Report allows 50% of the funds generated from geothermal resources on a military base to remain at that base for infrastructure improvements rather than going to Washington to be reallocated.

This provision means that Naval Air Weapons Station (NAWS) China Lake will be able to retain 50% of the funds generated from electricity sales at the Coso Geothermal Facility on the base.  NAWS China Lake can use these funds for installation-related energy or water security initiatives.

According to the Department of Defense, $15 million is generated annually at the Coso Geothermal Facility on NAWS China Lake.

McCarthy Press Release July 27, 2018

Coso Operating Company, LLC

Coso Operating Company, LLC, has operated the Coso Geothermal Projects at the U.S. Naval Weapons Center in Inyo County since 1987.  Consisting of four separate but interlinked geothermal power plants, the Coso site is one of the top three producers of geothermal electrical power in the United States.  The company leases the geothermal site from the U.S. Navy and BLM.  The project has produced as much as 270 megawatts of electricity, enough power to supply 250,000 homes.

https://cosoenergy.com/

Middle River Power, Managed Assets

Middle River Power is a private equity sponsored asset management platform focused on US power generation assets. Our team consists of power industry veterans with deep experience in the acquisition, development, operations, management, financing, and economic optimization of energy assets.

Our rigorous asset management approach analyzes regulatory changes, localized generation congestion, utility resource plans, fuel fundamentals, and transmission constraints. Assets under management or in development include over 3,000 MW of natural gas, coal, geothermal, and solar power generation facilities in California, Maryland, Virginia, and West Virginia.

Coso Geothermal (“Coso”) is located in central California, on the military-owned Naval Air Weapons Station at China Lake. Coso has been producing geothermal power continuously since 1987. The plant consists of four geothermal power stations that have a total of nine – 30 MW turbine-generator sets for an overall rated capacity of 270 MW with over a 98% availability factor. Coso has a Power Purchase Agreement with Southern California Edison which will allow Navy I, Navy II, and BLM to receive a firm energy price through January 2030 and has recently completed an agreement that would permit Coso’s energy and renewable energy credits to be available for sale in 2019.

https://www.middleriverpower.com/

December 15 2020 Coso Geothermal closes a $323 million energy deal

Originally developed in 1987, the 142-megawatt Coso Geothermal facility has been a steady source of renewable power for the Southern California region for more than three decades. The Coso site is considered one of the top three producers of geothermal electrical power in the United States.

CIT arranged the financing on behalf of project sponsor Avenue Capital and its wholly owned asset manager Middle River Power, and other co-owners Bardin Hill, Corre, and Voya investment funds, . The project is supported by three separate power purchase agreements that enable the delivery of Coso’s reliable baseload geothermal-generated electricity to customers.

CIT Serves as Coordinating Lead Arranger for $323 Million Geothermal Financing

The Coso Volcanic Field is in the Indian Wells Valley watershed basin

Coso Volcanic Field and Rose Valley

Coso Geothermal is Located in the Indian Wells Valley Watershed Basin (blue lines), the facility and City of Ridgecrest are the red dots

Coso Geothermal and Ridgecrest California (red dots)

Coso Geothermal’s new pipeline and wells are located in Rose Valley Basin 6-056, which is an integral part Indian Wells Valley Watershed Basin and a significant source of recharge for the IWV’s acquifers

Rose Valley-Coso Junction Well Location and Coso Geothermal Plant (red dots)

Coso Geothermal Has Many Wells

Between 80-90 production wells operate at a given time, producing a mass flow rate of more than 14 million pounds per hour. Depending on the volume of fluid that needs to be handled and where pressure support is required the Coso field can use between 30 to 40 injection wells. 

Coso Geothermal Area | Open Energy Information (openei.org)
Coso Geothermal Satellite.jpg

Coso Expansion Plans, 2009 Hay Ranch Water Project

Terra-Gen, LLC, the current owner of the Coso Geothermal Facility, has many plans to increase production from the field. Since the field is liquid-limited, one idea is to inject more water into the reservoir. In 2009, Terra-Gen obtained the critical permits from the Bureau of Land Management (BLM) to begin construction of a 9-mile pipeline for recharging the existing reservoir.[8] The intent of the project, referred to as the Hay Ranch Water Project, is to inject supplemental water into the reservoir to stabilize and enhance the field, increasing electricity production to serve an estimated 50,000 more homes, or about 50 MW. The BLM completed an extensive environmental review and concluded there will be no significant negative impacts from the project. Coso also obtained a Conditional Use Permit from Inyo County, after another Environmental Impact Review . A further barrier to the project was overcome by reaching settlement with Little Lake Ranch, Inc. to provide improvements around Little Lake to ensure the availability of water for recreational and habitat conservation purposes. After this delay, Terra-Gen completed the construction of the pipeline in late 2009.

Coso Geothermal Area | Open Energy Information (openei.org)

Coso Geothermal’s Rose Valley well is at Coso Junction, 9-miles from the facility, with a 12″ pipeline to the facility

Approximate pipeline route from Rose Valley and Coso Junction to the Coso Geothermal plant

Ongoing Navy Projects at Coso Geothermal

-Shallow Temperature Survey

-Microgravity Survey

-Microseismic Analysis and Interpretation

-3D Conceptual Geologic Model

Wells of Opportunity

-Machine Learning of Geothermal Reservoir Datasets

Current Projects (navygeo.com)

History of Coso Geothermal

“Model for Success” By Francis C. Monastero, Geothermal Program Office, U.S. Naval Air Weapons Station, China Lake

The business model used by the GPO is based on a time-tested and accepted concept of “farming-in,” which was developed more than five decades ago by the oil and gas industry. The approach is based on the premise that when front-end, high-risk exploration is done by a company at their own expense, they may decide for one reason or another that the prospect does not meet their economic criteria. So, they seek a partner who is willing to make the investment, and they take an overriding interest in the play. Agreements between the parties are fully negotiated, taking into consideration how much was put into the delineation phase, current market conditions, and current/projected operating expenses. In short, if the economics of a project do not “pencil out” favorably, no deal will be struck.

There are a number of reasons why the Navy has adopted this type of model. First, and probably most important, it lowers front end risk and facilitates securing of project financing without a large initial capital outlay by the geothermal developer. Second, it is a model with which the industry is familiar. Third, it encourages development and exploitation of renewable resources—something that is required by U.S. Department of Defense policy—by providing pre-investment knowledge developed by the GPO. Finally, it cuts down dramatically on the likelihood of fruitless encroachment by speculators who secure the developmental rights, but don’t have the capital to conduct the requisite technical investigations to prove the resource. Their presence on a military facility represents encroachment that must be managed, but with no value.

http://cosogeo.wpengine.com/wp-content/uploads/2017/08/coso.pdf

Coso Geothermal is Inyo County’s Largest Private Taxpayer

In addition to providing clean and green power to the grid, Coso Operating Company has a long track record of being responsible stewards of the environment and the natural resources under its control.  The Coso Geothermal projects also have been a major economic benefit to Inyo and Kern County residents.  As the largest private taxpayer in Inyo County, Coso has generated over $140 million in property taxes and has provided substantial revenue from the BLM royalty process and sales tax.  The Company is one of the largest private employers in the area and purchases goods and services from more than 50 local businesses. It also is a major supporter of local schools, charities and community organizations. Coso Team Members are responsible members of the communities in which they live and are concerned about maintaining the quality of life and unique High Desert lifestyle.

Coso Operating Company

Coso Operating Company strives to be a good neighbor:

Coso Operating Company has operated the Coso Geothermal Projects at the U.S. Naval Weapons Center in Inyo County since 1987.

The Coso Geothermal project has contributed nearly $140 million in property tax revenue to Inyo County.

BLM royalty payments provide additional sources of revenue to the County.

Coso does business with more than 50 local businesses.

Coso employs over 80 of your friends and neighbors who reside in the communities of Kern and Inyo counties.

Supports the local schools, sports programs, charitable organizations and community events throughout Inyo and Kern counties.

Provides scholarships for local students.

30 year partnership of investing in and working with Inyo County.

Winner of President’s National Environmental Achievement Award.

https://cosoenergy.com/community/

Conclusions and other information:

  • Coso Geothermal is exempt from California Department of Water reporting requirements for pumping water from the Indian Wells Valley’s groundwater basin and watershed.
  • Coso Geothermal has been excluded from the Indian Wells Valley Groundwater Management Area.
  • Coso Geothermal is a large pumper of water from the Indian Wells Valley groundwater basin and it’s wells are in a primary recharge acquifer from the southern edge of Haiwee Reservior and the northern boundary of the IWV Watershed Boundary.
  • Geographically speaking, The Indian Wells Valley is the home of the Coso Volcanic Field, Coso Geothermal and Rose Valley (NAWS China Lake included)
  • Coso Geothermal is exempt from California’s SGMA or the State’s environmental laws because the facilities are on Navy/BLM Land: Porter-Cologne Water Quality Control Act – 2021 Version (March Update) (ca.gov)
  • Inyo County and LADWP are not financially impacted if the IWV Groundwater Authority manages the entire IWV Watershed including Rose Valley Basin 6-056
  • 1860: “Boiling hot springs to the south” mentioned by a miner, M. H. Farley.
  • 1881: Government survey of the area described “Hot Sulphur Springs”
  • 1895: Land deeded to William T. Grant.
  • 1909: Health resort developed by Grant.
  • 1943: Health resort closed.
  • 1947: Land obtained by Naval Air Weapons Station.
  • 1960s: Dr. Carl Austin advised the Navy to develop the geothermal resource.
  • 1977: Full-scale scientific and engineering investigations of the geothermal resource; drilling 17 heat flow holes, collecting large quantities of geophysical and geologic data; and drilling one deep test hole.
  • 1979: 4,850 foot deep test hole provided commercial temperature and flow rate, leading to a contract with California Energy Co.
  • 1981: First successful production well completed.
  • 1987: First double flash geothermal power unit on-line (Navy I) of 90 MW Caithness Energy LLC, becomes the operator of the field for the Navy delivering power to Southern California Edison.
  • 1988: 2nd double flash geothermal power unit on-line (Navy II) of 90 MW.
  • 1989: 3rd and 4th double flash geothermal power unit on-line (BLM East and BLM west) for a total of 90 MW.
  • 1993: Implementation of LO-CAT® process for hydrogen sulfide removal and a sulfided, activated carbon media upstream for mercury removal.
  • 2001: Brookhaven National Lab wins R&D 100 award for development of silica removal technology.
  • 2002: DOE award to demonstrate hydraulic fracturing technology at the Coso location for a total of $4.5 million over five years as part of a $12 million dollar effort by the Energy and Geoscience Institute at University of Utah and Caithness Energy.
  • 2009: Terra-Gen Power takes over operation of the field; construction begins on pipeline for increasing reservoir recharge. Pipeline finished in late 2009

Wastewater Treatment Plants (WWTP) and desalination institutes operate like any other industrial plant. The water – sea water or brackish water for desalination plants, and sewage for WWTP, are the raw materials. The water purification process, in both cases, is an industrial process for all intents and purposes. 

Desalination Plants and Sewage Treatment (environment.co.il)

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