Oil at $132 a barrel. The cost of nuclear power plants doubling and tripling. Clean coal and CCS too pricey and unproven, while conventional coal faces stiff public opposition. Meanwhile, interest in electric and plug-in hybrid cars is growing, drawing more interest in electricity from renewables such as wind, solar, and perhaps more important over the coming years, geothermal.

The Northern California Power Agency has signed a 20-year contract with Vancouver-based geothermal developer Western Geopower, which will sell power from its 35-megawatt plant at the Geysers Geothermal Field for 9.8 cents a kilowatt-hour. This amounts to $520 million in revenues for Western Geopower over the term of the contract. This once seemed like a high price, but for emission-free baseload power it looks more and more like a deal. And California utilities know it. In February, Western Geopower terminated its PPA with Pacific Gas & Electric, probably because it knew such power was in high demand and could probably fetch a better price. The company also increased the planned output of the plant, which wasn’t covered in the original contract with PG&E.

It would be nice to see more of these projects and deals. Problem is, geothermal today is limited to location. What we need to see is some major investments and advancements in enhanced or “engineered” geothermal systems that allow for development closer to where the power is needed and to transmission infrastructure. AltaRock, Geothermex, Geodynamics and Ormat (see VentureBeat post) are among the companies exploring this next generation of geothermal, which could one day lead to the development of geothermal power plants in New York State, Ontario, and places never considered in the past.

One can only hope.

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