Raser Technologies

Source: Energy Digital

Date :3/18/2008 5:53:07 AM

CEO Brent Cook explains how his company’s flexibility?and broad understanding of the industry is making Raser Technologies a leader in geothermal solutions

Written by Emmet Cole and produced by Michael Alexander Jones

Raser Technologies CEO Brent Cook doesn’t mince words when predicting the future of the geothermal power industry. “The companies that understand all three aspects of the industry are going to succeed in the future. The first is the power industry. The second is geothermal, based on geophysics, which is where most geothermal companies are focused right now. The third is tax equity structuring, meaning some of the tax incentives are very compelling and when utilized properly can totally reshape the industry.”

By maximizing on this convergence, and by combining its hybrid engine technology with geothermal development in what it calls a “Well to Wheel” strategy, Raser is pioneering green energy strategies, producing power and making it easy for environmentally-conscious investors to get involved.

When Cook arrived at Raser, the company had established a good reputation through its Symetron Motor and Controller Technology - highly efficient, high-torque applications, which helped pioneer electric hybrid cars. In fact, Raser is a founding member of the Plug-in Hybrid Electric Vehicle Consortium.

But at a previous job, Cook had fallen in love with the green potential of geothermal technology and after sensing an opportunity in an emerging industry, he made the renewable energy source Raser Technology’s top priority starting in 2005.

Changing the industry model

Most geothermal companies, Cook says, take a geology-based “homerun” approach to plant development, searching only for big hotspots with the most power potential. Geologists can spend years trying to find these spots, and another three to five years studying the site before deployment.

Raser believes in a different strategy. If the company happens to find a homerun spot, it will follow standard procedures to develop a large geothermal power plant. But Raser relies more on hitting “singles and doubles” with a “rapid deployment strategy” of smaller, flexible plants using relatively low-heat.

“Our company is predominantly about power,” says Cook. “We’re power people in the power production business. We focus on the markets and the transmission, and we do our best to eliminate the geologic risk by focusing on fairly low temperature resources.”

Without the long research and design period, plants can normally be built and running within 12-18 months, meaning capital returns to investors much sooner than from larger projects.

Instead of aiming for maximum megawatt optimization, the low-heat plants are designed for maximum probability, thereby providing less geological - and investment - risk. And following the initial plant deployment, Raser can go back to build on the initial design, further optimizing power output, and providing even greater returns for investors.

“We don’t custom build to the resource. We manage the resource to our footprint plant design,” Cook says. “Sometimes that may not be optimizing thermally, but we’re optimizing economically. If we find a resource that might provide 22 megawatts, we’ll put a ten megawatt design plant in, and possibly come back and put in another 12 megawatts later once we’re confident there’s 22 megawatts of resource there.”

Cook says the rapid deployment strategy takes more effort to execute effectively, because it creates a crowded production pipeline.

The approach requires tremendous flexibility, requiring Raser to outsource many processes to companies like United Technologies. “We have some in-house engineers but generally speaking we staff up externally for construction and turnkey type operations,” Cook says.

As a result, the company can start building plants in the factory before the permits to build on the actual site have arrived, and before the company even decides which site to build on first. Once the plant’s infrastructure is put in place and the modular components have been delivered, plants can be up and running within three to five days.

Big results

A large part of Raser Technologies’ geothermal financing will come through its effective use of tax benefits, including production tax credits, which are often available for green-focused projects. Raser seeks large, financially secure partners to fund its projects. In turn, the investor receives the majority of the tax benefits for its involvement in the alternative energy space, which then again leads to further investment into environmentally responsible projects.

It’s a win-win situation for the company, the investor and Mother Earth, and it’s a strategy that has IRS incentives. The incentives encourage companies and individuals to invest in socially and environmentally responsible activities such as geothermal,” Cook says. “I’m not disparaging anything from the geologist approach. It’s just that for the geologists to ignore financial tax attributes, and how they affect the feasibility of a project, is less optimal. Ignoring where power transmission and the power grid exists, and how the power is transferred to market is just as important as finding the hot water under the rocks.”

Raser’s hybrid technology earned a Product Innovation of the Year Award by consulting firm Frost & Sullivan, and R&D Magazine described Raser’s UTC geothermal power system as one of the 100 most technologically significant products introduced in 2007.

Raser has landed a slew of projects in both branches of its business in 2008, including agreements with Pacific Gas and Electric Company and South Korea’s Hyundai Heavy Industries. Raser currently has 55 megawatts in geothermal development, including sites in Central Nevada, in Utah’s Escalante Desert and in New Mexico. Raser’s geothermal resource portfolio covers more than 200,000 acres across six Western states.

“We’re not necessarily that appealing building ten to 20 megawatts at a time, but as we ramp up our development, more and more people are taking note of what we’re doing,” Cook says. “It offers investors looking for a green investment opportunity a lower risk strategy.”

Future progress

Looking ahead, Cook says the company has its eye on several more green initiatives. For example, Raser sees an ongoing challenge in working to minimize the “parasitic load” (the amount of energy plants take to run themselves) in its plants by utilizing some of the same technology the company uses in its hybrid engines. Raser also has future plans to pioneer what it calls “waste heat recovery,” where excess heat emissions from steel plants, cement kilns or other industrial plants are captured and turned into electricity using the same technology the company uses in its geothermal arena.

“The technology is a closed loop system, and there’s zero emissions out of the process,” Cook says. “You can look at this as less pollution or more power for the same amount of pollution off of an industrial process. In any case, it helps make everything more efficient.”

It’s all part of a successful, straightforward strategy for Raser: Understand the industry. Make money. Stay green from well to wheels.

“Why make heat when you can take it out of the ground?” Cook asks.

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