AltaRock Breaks New Ground With Geothermal Power

Around the same time, Jeff Tester, a professor of chemical engineering at the Massachusetts Institute of Technology, was busy assembling an expert panel to produce a comprehensive report, released last January, called "The Future of Geothermal Energy."

One member of the 18-person panel was Petty, founder of geothermal consultancy Black Mountain Technology. Vassallo had seen Petty at several conferences, but it wasn’t until a formal introduction through Tester that the two women began a fruitful dialogue.

They went out for dinner one evening after a conference at Stanford University, during which Vassallo asked Petty an intriguing question: If Petty could do anything she wanted in the geothermal space, what would it be and who would be on her dream team?

"That was how it started," Vassallo said. "Susan went away and spent a few months thinking about it."

When the decision was made to create the new company, Kleiner Perkins and Khosla Ventures provided initial funding and paired up Petty’s technical expertise with top project developers.

Don O’Shei, a principal with energy-project developer TriLateral Energy, was brought in as AltaRock’s chief executive. O’Shei was previously chief operating officer of Bechtel’s water utility subsidiary and before that was co-president of MidAmerican Energy Holdings Co. and its power-plant development subsidiary, CalEnergy Generation.

AltaRock also has hired some of the leading experts in the EGS field, including Roy Baria, a 30-year veteran of "hot-rock" projects who provides consulting services around the world. Baria is now AltaRock’s vice president of science and technology.

Petty said the involvement of the two venture-capital firms has been invaluable.

"They’re not just providing money; they’re providing us with contacts and political influence, and stuff you don’t normally get."

But difficult work lies ahead. Petty said the company already knows how to crack rock and dig wells that are several miles deep, but figuring out how to control the cracking remains tricky. It must also assure that huge volumes of water injected into the wells can be recovered and re-injected back in with minimal losses. Since water must be brought to EGS sites, losses of even a few percent can ruin the economics of a project.

Then there’s the issue of accidentally triggering earthquakes through deep drilling, which happened in late 2006 on one EGS project in Switzerland.

"It’s a potential outcome that needs to be understood and dealt with," Vassallo acknowledged.

Yoram Bronicki, president and chief operating officer of Reno, Nev.-based Ormat Technologies, which builds, owns and operates geothermal plants around the world (including a pilot EGS project in Reno), said he is cautiously optimistic about the potential of EGS.

Ormat has attracted the attention of Google.org, including visits from senior executives such as Larry Page and discussions about potential clean-energy collaborations, according to Israeli newspapers Haaretz and The Marker (via VentureBeat).

But Bronicki worries that the hype over its potential is blurring the reality.

"The industry has to prove that it’s not only successful on a pilot scale, but that this could be reproduced again and again," said Bronicki, who compares the current expectations of EGS with earlier promises of a hydrogen economy that never materialized.

At the same time, Bronicki said he holds out hope for breakthroughs and that more investment and research and development will flow to EGS. A key enabler of this will be greater collaboration and co-development with the oil and gas industry, which brings decades of expertise related to exploration and drilling.

"If a bigger part of that could be harnessed for geothermal, it will have a great impact," he said.