Department of Energy grant comes in wake of shutdown at GeysersSAUSALITO –  AltaRock Geothermal and a partner will get a fresh infusion of nearly $25 million in stimulus money from the Department of Energy to develop an Engineered Geothermal System in Newberry, Ore.

It will be the second try for the venture-funded Sausalito startup. AltaRock was forced to suspend a demonstration project at the Geysers Steam Field when it encountered a rare, shifting layer of rock that wouldn't hold a shaft.

"We're still up there doing an analysis of the failure and learning what lessons it has to teach us," said AltaRock Chief Executive Officer Donald O'Shei.

Meanwhile, the company has partnered with Davenport Power in the Newberry Geothermal Resource Area in Oregon to launch a new demonstration project.

[caption id="attachment_16529" align="alignright" width="360" caption="A drill rig in Newberry, Ore., where AltaRock will attempt a new kind of fracture well and geothermal system"][/caption]

EGS involves using high-pressure injection wells to cause fractures in rock 3,000 to 5,000 meters below the surface. Water is circulated through the fractures where it is heated by the earth's molten core before being pumped to the surface to power turbines.

Unlike traditional geothermal wells that rely on existing sources of water to create steam, closed-system EGS wells can be placed anywhere hot rock can be accessed.

AltaRock is the only developer of EGS in the U.S., and the DOE is very interested in the technology.

"AltaRock ... is on the cutting edge of engineered geothermal energy, and I'm extraordinarily pleased the DOE is making a commitment," said Rep. Jay Inslee, D-Wash.  He's a supporter of AltaRock, which was founded in Seattle and maintains a technology group there.

"Investment will allow new testing, research and expansion of the technology, which has the potential to become an inexpensive, self regenerating and CO2-free source of energy.

"With the work of AltaRock and others, the Pacific Northwest will remain at the vanguard of clean-energy development."

In addition to the project grant, the DOE is giving AltaRock $1.45 million to develop exploration methods for identifying EGS drilling targets more efficiently.

"We'll use the funds to work on new survey techniques for finding hot rock using models and data analysis rather than drilling holes" said Mr. O'Shei.

That work will most likely take place in Nevada, where extensive prior exploration will allow AltaRock to check its results against known data, he said.

In Newberry, where the resource area does not have the unstable rock layer that plagued work at the Geysers and is relatively seismically inactive, AltaRock and Davenport Power will use a 10,000-foot well previously drilled by Davenport and found to be dry.

"By causing two fractures, we can up the energy output from about 3 to 3 and a half megawatts, which seems to be the average produced by experimental EGS wells in Europe, to 6 to 9 megawatts," said Mr. O'Shei.

That amount of energy could power a good-sized town.

The demonstration well is projected to be completed by the end of 2010.

AltaRock, launched in September of last year, has received about $30.4 million in funding in addition to the new DOE grants. The 22-employee company received $26.25 million in Series A and B funding from Khosla Ventures, Kleiner Perkins Caulfield & Byers, Google.org Advanced Technology Ventures and Vulcan Capital.

For further information, visit www.altarockenergy.com.