Detailed Information on the
Geothermal Technology Assessment

Program Code 10000102
Program Title Geothermal Technology
Department Name Department of Energy
Agency/Bureau Name Department of Energy
Program Type(s) Research and Development Program
Assessment Year 2003
Assessment Rating Moderately Effective
Assessment Section Scores
Section Score
Program Purpose & Design 80%
Strategic Planning 80%
Program Management 88%
Program Results/Accountability 58%
Program Funding Level
(in millions)
FY2007 $5
FY2008 $0
FY2009 $0

Ongoing Program Improvement Plans

Year Began Improvement Plan Status Comments

Develop guidance that specifies a consistent framework for analyzing the costs and benefits of research and development investments, and use this information to guide budget decisions.

Action taken, but not completed DOE has made progress in analyzing the benefits of R&D investments focusing on potential benefits to the environment and our climate change strategy. DOE has specified common scenarios and metrics to analyze the benefits of the R&D investments. DOE is considering several alternative means of implementing a common methodology, common assumptions, and a consistent approach to energy and economic benefits, costs, and risk, and on demonstrating the use of this information in budget decisions.

Finalize detailed technology evaluation for enhanced geothermal systems to prioritize technology needs and focus program on enhanced geothermal systems.

Action taken, but not completed Detailed technology evaluation for enhanced geothermal systems was released in March 2008. Prioritization will occur during FY 2010 budget development

Completed Program Improvement Plans

Year Began Improvement Plan Status Comments

Continue emphasis on enhanced geothermal systems research.

Completed In 2005, the program dedicated more resources to research on enhanced geothermal systems technology.

Provides funding consistent with meeting performance targets by redirecting funding from lower priority earmarks.

Completed The program discourages Congressional earmarks and does not propose to continue any of them in each year's budget. Nevertheless, Congress continues to earmark a significant portion of appropriated funds each year. The program is in the process of closing out more than 30 low-to-medium priority projects as determined by peer review, program needs, and EERE research priorities.

Focus resources on higher priority renewable energy research and development programs. Changes to the law in 2005 should promote geothermal resource development.

Completed The program is implementing an orderly closeout process based on a FY 2008 request of zero. Steps have been taken to document and disseminate the accomplishments of the research program. Congress provided $5M funding in FY07 for EGS and Oil and Gas Co-production.

Program Performance Measures

Term Type  
Long-term Output

Measure: Cost of "flash power" from geothermal resources, in cents per kilowatt-hour (??/kWh). (Flash power means power produced by "flashing" geothermally pressurized water into steam to turn a turbine.)

Explanation:Reducing the cost of power can help increase domestic use of the resource, which will contribute to the Department's goals of increased energy security and reduced greenhouse gas and pollutant emissions. Steel costs and cost of drilling increased significantly in 2005, causing the cost of power to increase.

Year Target Actual
1995 4.2 ??/kWh 4.2 ??/kWh
2000 3.5 ??/kWh 3.8 ??/kWh
2005 3.4 ??/kWh 5.49 ??/kWh
2006 5.4 ??/kWh 5.49 ??/kWh
2007 Measure retired Measure retired
Long-term Output

Measure: Cost of "binary power" from geothermal resources, in cents per kilowatt-hour (??/kWh). (Binary power plants transfer the heat of the geothermal fluid to a separate working fluid, which boils to vapor and is directed into a turbine for power production.)

Explanation:Reducing the cost of power can help increase domestic use of the resource, which will contribute to the Department's goals of increased energy security and reduced greenhouse gas and pollutant emissions. Steel costs and cost of drilling increased significantly in 2005, causing the cost of power to increase.

Year Target Actual
1995 baseline 7.7 ??/kWh
2000 5.5 ??/kWh 5.6 ??/kWh
2005 5.0 ??/kWh 8.2 ??/kWh
2006 7.7 ??/kWh 8.8 c/kWh
2007 Measure retired Measure retired
Long-term Outcome

Measure: Outreach measure under development.

Explanation:Measure should track extent to which cost reductions and outreach activities contribute to increased deployment, although State and Federal policies may also have a significant impact on results. Assume the average American home uses about 10,500 kWh of electricity per year.

Year Target Actual
2000 Baseline UD
Annual Output

Measure: Cost of drilling geothermal wells based on program estimates, in dollars per foot ($/ft).

Explanation:Cost of drilling is a major contributing factor to overall geothermal cost of energy.

Year Target Actual
2000 300 $/ft 300 $/ft
2002 282 $/ft 282 $/ft
2003 273 $/ft 273 $/ft
2004 268 $/ft 252 $/ft
2005 246 $/ft 250 $/ft
2006 246 $/ft 239 $/ft
2007 Measure retired Measure retired
Annual Output

Measure: Capital cost of geothermal surface systems based on program estimates, in dollars per kilowatt ($/kW)

Explanation:Surface systems refer to the power plant components. Capital cost of surface systems is a major contributing factor to overall geothermal cost of energy. Cost of steel caused an increase in cost of surfact systems in 2005

Year Target Actual
2001 1,960 $/kW 1,960 $/kW
2002 1,920 $/kW 1,920 $/kW
2003 1,880 $/kW 1,880 $/kW
2005 1,880 $/kW 1,880 $/kW
2006 1,760 $/kW 1,880 $/kW
2007 Measure retired Measure retired
Annual Output

Measure: Enhanced geothermal systems measure under development.

Explanation:An EGS is an engineered reservoir created to extract heat from economically unproductive geothermal resources. "Economic" means a particular geothermal resource could be used to produce power at competitive prices.

Annual Efficiency

Measure: Administrative costs as a percent of total program cost.

Explanation:This "overhead rate" measure is not a true efficiency measure but is a meaningful surrogate used for all DOE applied R&D and related programs. The objective is to maintain a reasonable overhead rate for effective operation while ensuring that the vast majority of funds address the program purpose. Administrative costs include all Program Direction costs plus costs for supporting activities and analysis funded through programmatic appropriations. The targets and actuals represent corporate figures (i.e., for the entire Office of Energy Efficiency and Renewable Energy) because some EERE Program Direction costs are difficult to parse at the program level in a meaningful way. Appropriation levels for EERE programs and for EE Program Direction directly affect whether the target is achieved.

Year Target Actual
2008 under development

Questions/Answers (Detailed Assessment)

Section 1 - Program Purpose & Design
Number Question Answer Score

Is the program purpose clear?

Explanation: The purpose of the Geothermal Technology program is to establish geothermal energy as an economically competitive contributor to the U. S energy supply, capable of meeting a significant portion of the Nation's heat and power needs.

Evidence: FY 2004 Budget. P.L. 93-410, "Geothermal Energy Research, Development and Demonstration Act " (1974); P.L. 101-218, "Renewable Energy and Energy Efficiency Technology Competitiveness Act of 1989"; P.L. 101-575, "Solar, Wind, Waste, and Geothermal Power Production Incentives Act of 1990"; P.L. 102-1018, "Energy Policy Act of 1992"

YES 20%

Does the program address a specific and existing problem, interest, or need?

Explanation: The program aims to expand the use of geothermal energy, which can increase domestic energy supplies and avoid emissions of pollutants and greenhouse gases associated with conventional methods of power production. These potential benefits support the Administration's National Energy Policy, as well as the Administration's climate change goals. The program focuses on reducing drilling costs, improving finding rates of exploratory drilling, expanding geothermal resource base, and reducing surface system costs of producing electricity.

Evidence: The program focuses R&D on activities that it considers too technologically risky for the private sector to undertake alone. Risk levels vary on a project-by project basis.

YES 20%

Is the program designed so that it is not redundant or duplicative of any Federal, state, local or private effort?

Explanation: The program's activities are unique in that there is no other entity in the United States mounting a significant research effort to improve geothermal technologies. Both the California Energy Commission and the U.S. Navy have small geothermal programs. (The Navy program focuses only on the Coso geothermal development in California.) The Department's program coordinates with these other programs, usually through the exchange of experts for technical proposals review. While Federal and private sector research efforts on oil and gas drilling may complement some of the program's R&D efforts, the results are not completely transferrable because geothermal resources occur in a much more challenging (deeper, hotter, harder, more chemically aggressive) environment that requires specialized technologies for exploration and production.

Evidence: The program considers uncertain risk-to-return ratio and lack of industry capital to be market barriers to private sector investment in geothermal technologies.

YES 20%

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The program focuses on reducing costs of geothermal power though technology development in order to achieve the outcomes of increased domestic energy supply and reduced emissions of pollutants and greenhouse gases.

Evidence: The program found no studies that indicate a production tax credit, regulatory driver, or other policy mechanism would be a more cost effective approach than R&D.

YES 20%

Is the program effectively targeted, so program resources reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The program focuses resources and technologies that are not yet commercially competitive. In support of the Administration's R&D Investment Criteria initiative, the program was asked to prepare "bubble charts" that plot key program variables (e.g., expected public benefits, funding levels, years to commercialization). Bubble charts can serve as an informational tool to help determine, along with other considerations, whether the program appropriately targets its R&D funding. While the program has made progress estimating public benefits, the Department has not yet developed a methodology to estimate benefits consistently within and across programs. Therefore, the program could not prepare meaningful bubble charts.

Evidence: Although unable to prepare bubble charts, the program did estimate years to commercialization for its major R&D activities as follows: enhanced geothermal system (EGS) technology (15 years); non-invasive resource verification (15 years); advanced drilling system (10 years); advanced surface systems (10 years). The program's estimates have not been peer reviewed. In general, the program appears to target its resources wisely, but a lack of ability to provide appropriate evidence mandates a "no" response. EERE continues to work internally and with other DOE program offices to improve consistency and accuracy in estimating benefits.

NO 0%

Does the program effectively articulate potential public benefits?



NA  %

If an industry-related problem, can the program explain how the market fails to motivate private investment?



NA  %
Section 1 - Program Purpose & Design Score 80%
Section 2 - Strategic Planning
Number Question Answer Score

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The program has identified three long-term performance measures that reasonably capture most program activities.

Evidence: FY 2004 Budget. Geothermal Multiyear Program Plan (September 2003).

YES 10%

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The Program has established multi-year Program goals that target specific areas of improvement in drilling costs, cost of constructing geothermal power plants, and expansion of economic geothermal resources, all of which affect the long-term measure of reducing geothermal power costs. Every year the Program reassesses progress of the research efforts, and makes adjustments in R&D.

Evidence: The program has identified "off-ramps" to redirect, down-select, or terminate efforts in its main R&D activities. For example, Surface system R&D will be terminated if it is unable to meet annual goals for reducing surface systems cost for three consecutive years.

YES 10%

Does the program have a limited number of specific annual performance measures that demonstrate progress toward achieving the program's long-term measures?

Explanation: The program has developed three new annual performance measures that demonstrate progress toward the long-term goals. The program also monitors a suite of annual milestones and indicators that are designed to track progress toward meeting long-term goals.

Evidence: Geothermal Multiyear Program Plan (September 2003).

YES 10%

Does the program have baselines and ambitious targets and timeframes for its annual measures?

Explanation: The program's new annual performance measures have baselines and the targets appear to be reasonably ambitious.


YES 10%

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, etc.) commit to and work toward the annual and/or long-term goals of the program?

Explanation: National laboratories and other contractors are required to define, monitor, and report on meaningful measures of program accomplishment that are consistent with long-term goals of the program. Those goals are used to guide the formulation of the Annual Operating Plan (AOP) that documents the specific accomplishments to which each performer commits in accepting financial support.

Evidence: FY 2003 Annual Operating Plan. Sample contract document identifying program performance goals.

YES 10%

Are independent and quality evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The program regularly organizes independent peer reviews to evaluate research projects and establish directions for future work. Peer reviewers typically evaluate individual projects based on technical performance to date. The program should consider expanding the scope of peer reviews to include overall program effectiveness and relevance.

Evidence: Geothermal peer review conferences: August 23-24, 2001, March 25-27, 2002, and July 29-August 1, 2003.

YES 10%

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Program funding is explicitly tied to specific priority activities that are designed to lower drilling costs, improve exploration success rates, and lower the cost of constructing geothermal power plants. However, budget documents do not clearly indicate the full costs of achieving the program goals. Salaries, benefits, and other admininstrative expenses to support the program are included in a separate budgetary line item ("Program Direction"). EERE does not report the allocation of Program Direction funding to the various programs it supports.

Evidence: FY 2004 Budget.

NO 0%

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The program has consulted with industry and other stakeholders on priority needs and has formulated a multiyear research plan.

Evidence: Geothermal Multiyear Program Plan (September 2003).

YES 10%

If applicable, does the program assess and compare the potential benefits of efforts within the program to other efforts that have similar goals?

Explanation: Each year, the program estimates the public benefits of its activities in support of the Government Performance and Results Act (GPRA) and the Administration's R&D Investment Criteria initiative. However, the program has not yet developed a consistent and reliable methodology for comparing potential benefits within and across programs with similar goals.

Evidence: FY 2004 Congressional Budget Justification materials.

NO 0%

Does the program use a prioritization process to guide budget requests and funding decisions?

Explanation: The program indicates that each activity that it supports is assigned a relative impact based upon factors such as system cost, risk of achieving success, and cost to market and other technology variables. While the program did not provide information on these relative impacts or use bubble charts to inform its decisions, it did participate in an EERE-wide zero-based budget exercise in which priorities at the activity level were clearly laid out.

Evidence: Program prioritized its activities as follows (highest to lowest priority): drilling R&D, enhanced geothermal systems, detection and mapping, core geothermal research, advanced heat and power, and Geopowering the West. EERE Priority Ranking Tool, Zero Based Budget Exercise.

YES 10%
Section 2 - Strategic Planning Score 80%
Section 3 - Program Management
Number Question Answer Score

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The EERE Strategic Management System -- which establishes at the beginning of each fiscal year an 18-month schedule for key planning, budget formulation, budget execution, and analysis / evaluation functions -- requires that each EERE program establish and track long-term and near-term program performance goals and measures. Program results as evaluated through the goals and measures are used annually and throughout the year to assess partners' performance, adjust funding, and re-align R&D portfolios.

Evidence: SMS Implementation Letter for FY 2002 - 2005 (October 2001). The program also reports on quarterly milestones in the Department's Joule database. However, in general, milestones in the Joule system are not necessarily meaningful or fully reflective of program progress. Thus, the Department's Joule system provides little value-added. The new I-MANAGE system, currently under development, will better integrate budget and performance.

YES 12%

Are Federal managers and program partners (grantees, subgrantees, contractors, cost-sharing partners, etc.) held accountable for cost, schedule and performance results?

Explanation: The Annual Performance Appraisals of all EERE Program Managers include criteria directly related to cost, schedule, and performance results. EERE reviews these criteria monthly in the EERE Monthly Management Reviews. Most EERE contracts include award fee and other performance criteria to hold those partners accountable.

Evidence: Performance Plan and Performance Appraisal Form for Performance Management System Employees; EERE Award Fee and Performance Based contracts

YES 12%

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Each year, the program develops an Annual Operating Plan, which is reviewed internally to ensure that new funding is planned to be obligated consistent with the appropriated purpose. EERE also develops a Spend Plan for all of its programs. The program uses data from Departmental procurement and financial systems -- and similar data from National Laboratory partners -- to assure that actual expenditures occur for intended purposes and on a schedule consistent with the Spend Plan. Unobligated balances brought forward to FY 2004 were $129,000, less than one percent of the program's FY 2003 appropriation of approximately $29 million.

Evidence: FY 2003 Annual Operating Plan. Geothermal Technology Program FY 2003 Financial Status Report (June 2003). FY 2004 Apportionment, FY 2003 Spend Plan.

YES 12%

Does the program have procedures (e.g., competitive sourcing/cost comparisons, IT improvements, approporaite incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: EERE's reorganization in 2002 clarified lines of responsibility and eliminated organizational "stovepipes" by consolidating planning, budgeting, and analysis into a single business administration office. The reorganization reduced management layers, although staff levels remained the same. EERE developed a new IT report to improve program managers' access to EERE cost, obligation, and procurement data. EERE plans to consolidate several legacy IT systems into a single program management system that is intended to track all required information on a project by project basis (cost share, type of contract according to A-11 definitions, etc.). EERE is also developing a measure to reduce uncosted balances, which means obligated funds will be put to use more quickly. These recent actions should achieve efficiencies and improve cost effectiveness, although it will be difficult in some cases to demonstrate definitively.

Evidence: EERE Reorganization "All Hands" presentation: www.eere.energy.gov/office_eere/pdfs/eere_reorg.pdf. EERE IT Business Case Number 019-20-01-12-01-1011-00-304-101. Geothermal Technology Program FY 2003 Financial Status Report (June 2003).

YES 12%

Does the program collaborate and coordinate effectively with related programs?

Explanation: The program collaborates with the DOE Fossil Energy program on oil and gas drilling activities and with the US Geologic Survey (USGS) on geothermal resource assessment. The program also actively participates in activities at the State level when opportunities arise. The USGS and California Energy Commission were panel members in the 2002 Drilling and ESR&T Peer Review and the 2001 Geoscience Peer Review. The program shares in the development of high temperature electronic drilling components in a Joint Industry Partnership with the oil & gas industry.

Evidence: Interagency agreements with USGS: DE-AI07-92ID13207 and DE-AI07-98ID13673. Drilling/ESR&T Peer Review Report (2002). Geoscience Peer Review Report (2001). Collaborative projects with DOE Office Fossil Energy. Joint project with California Energy Commission under Public Interest Energy Research and the State's Geothermal Resources Development Account.

YES 12%

Does the program use strong financial management practices?

Explanation: Each year, EERE develops and maintains a Spend Plan and a Measures spreadsheet that links the Spend Plan to annual and long-term goals and measures for each EERE program. The program reviews quarterly costing reports and weekly project status reports. There is no evidence of erroneous payments or statutory violations.

Evidence: FY 2003 Spend Plan and Measures spreadsheet. Sample quarterly costing report.

YES 12%

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The National Association of Public Administrators (NAPA) found dozens of management deficiencies in the program's bureau (the Office of Energy Efficiency and Renewable Energy, or EERE) in a review published in 2000. EERE provided evidence that it addressed some of management deficiencies identified by NAPA, and has prepared a Management Action Plan that will address many of the remaining findings. While a few NAPA recommendations have not been addressed (e.g., that EERE conduct periodic audits to assure that cost-sharing partners actually provide funding they agree to), in general, EERE has taken meaningful steps to address most deficiencies.

Evidence: A Review of the Management in the Office of Energy Efficiency and Renewable Energy (NAPA, 2000). Letter Report from Assistant Secretary Garman to Chairman of the House Subcommittee on Interior and Related Agencies on implementation of NAPA recommendations (July 11, 2001). EERE Management Action Plan (August 2003).

YES 12%

Does the program allocate funds through a competitive, merit-based process, or, if not, does it justify funding methods and document how quality is maintained?

Explanation: The program uses a lead National Lab concept in managing technical activities. The program allocates funds based on technical program goals, utilizing the expertise at the National Labs. The program could not document the conduct of its R&D activities in accordance with OMB Circular A-11 definitions (e.g., merit-reviewed with limited competitive selection, Congressionally directed, etc.). Program could also not demonstrate that research stage (basic, applied, development, demonstration) correlated with statutory and Administration guidelines for cost sharing.


NO 0%

Does competition encourage the participation of new/first-time performers through a fair and open application process?



NA  %

Does the program adequately define appropriate termination points and other decision points?



NA  %

If the program includes technology development or construction or operation of a facility, does the program clearly define deliverables and required capability/performance characteristics and appropriate, credible cost and schedule goals?



NA  %
Section 3 - Program Management Score 88%
Section 4 - Program Results/Accountability
Number Question Answer Score

Has the program demonstrated adequate progress in achieving its long-term outcome performance goals?

Explanation: The key long-term measure is cost of geothermal power. Since 1980, the cost of geothermally generated electricity has dropped from 16 cents/kWh to 5-8 cents/kWh today, in part due to DOE-sponsored R&D. The program has contributed to improvements in geothermal drilling subsystems (drill bit design, lost circulation control, high temperature cements, etc), energy conversion surface facilities (advanced direct contact condensers, metastable turbine expansions, etc.), and other geothermal technologies, many of which have contributed to reduced geothermal power cost.



Does the program (including program partners) achieve its annual performance goals?

Explanation: The program's annual performance measures are new, so it is too early to assess progress on achieving targets. However, peer review data and available historic data on the annual measures indicates that the program has contributed to progress on the measures.



Does the program demonstrate improved efficiencies or cost effectiveness in achieving program performance goals each year?

Explanation: The program could not demonstrate that actions it has taken have resulted in tangible productivity or efficiency gains.


NO 0%

Does the performance of this program compare favorably to other programs, including government, private, etc., that have similar purpose and goals?

Explanation: DOE geothermal program activities are unique in that there is no other large entity in the United States mounting a significant research effort in geothermal technologies. The U.S Navy and the State of California each sponsor small geothermal R&D programs. The programs coordinate (usually through the proposal review process) to ensure no duplication of effort, but there is little evidence on which to base a value judgement of whether one program is "better" than the others.

Evidence: www.energy.ca.gov/geothermal/index.html

NA 0%

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: In a review in 2000, the National Academy of Sciences wrote: "Significant progress has been made in drilling technology and down-hole diagnostic methods, resevoir modeling..., and power conversion methods. In addition, DOE accelerated the development of ground source heat pump technology as a very reliable, cost-effective means of increasing heating and air conditioning efficiency." The program also conducts annual peer reviews of its project to evaluate progress and technical merit on a project-by- project basis. While the scope of these reviews is limited and does not include evaluation of program success in achieving annual and long-term goals, most projects have generally received favorable reviews. The program also reports receiving the following awards: 1995 R&D 100 award for advanced direct contact condensers; 1999 R&D 100 award for high temperature cements; 2002 R&D 100 award for PPS coating for tubes; 2003 R&D 100 awards for acoustic telemetry for drilling and a low emissions separator system. It's difficult to assess whether the number of awards is significant given the investments to date. It may be useful to benchmark awards/patents per dollar invested against similar applied R&D programs.

Evidence: Renewable Power Pathways: A Review of the U.S. Department of Energy's Renewable Energy Programs (NAS, 2000). Proceedings from geothermal program peer review conferences: August 23-24, 2001, March 25-27, 2002, and July 29-August 1, 2003.

YES 25%

If the program includes construction of a facility, were program goals achieved within budgeted costs and established schedules?



NA  %
Section 4 - Program Results/Accountability Score 58%

Last updated: 09062008.2003SPR