The dollars are flowing to companies large and small. Automotive start ups like Tesla Motors and Fisker Automotive, companies with little track record and no profits to speak of, have scored nearly $1 billion combined in guaranteed loans. Meanwhile established car companies like Ford and Nissan have been granted $5.9 billion and $1.6 billion respectively to further development of electric vehicles. That’s in addition to the government’s purchase of General Motors at a cost of tens of billions of dollars.

Outside the auto industry we’ve seen companies such as Solyndra, a solar power start up based in Silicon Valley that qualified earlier this year for a $535 million DOE loan guarantee. Prior to the loan guarantee Solyndra had been funded to the tune of $800 million in private venture capital financing. At the beginning of September the DOE also announced over $500 million in grants given mostly to large wind power developers. Since then many large utilities across the country have benefited from over $3 billion in smart grid stimulus awards. More recently the DOE has announced more than $600 million for energy storage projects.

If you look at the entire list of what has been funded so far you’ll see that no technology has been left behind. Electric vehicles, solar, wind, smart grid, geothermal, energy efficiency, energy storage  and carbon capture have all received funding. Thus one of the biggest obstacles to the development of new clean energy technologies has been removed. The collapse of the credit markets and oil prices dried up the investment pot. But the U.S. government has stepped in to fill the vacuum. So companies now have access to the capital they need to develop better batteries, construct manufacturing plants, research future technologies and much more.

With the financing obstacle removed for many companies, the only thing that’s left for companies to do now is to deliver on their promises. Electric car manufacturers have promised affordable vehicles that eliminate (or greatly reduce) the need for gasoline use in day-to-day transportation. Solar producers have promised gigawatts of solar facilities across the deserts of the southwest and rooftops across America. Wind power developers have promised clean, reliable, emission free electricity with very low impact to the environment. Smart grid companies have promised a new age of energy information technologies that will virtually eliminate blackouts and give consumers unprecedented control over their energy use and costs. Geothermal developers have promised a vast supply of emission free, uninterrupted baseload power from deep below the surface of the earth. On top of all the promises we’ve heard many times over the past decades there is also the promise of millions of “green jobs” as a result of a new clean energy economy.

The billions of dollars in play right now may only represent a down payment on future possibilities for clean energy development in the United States. Results are important though. If you have an investor who throws in a million dollars most of the time they want to see some progress before they commit more money. In this case the investors are the American people who’ve heard promises about the benefits of affordable electric vehicles and solar technology for decades. If public support for new energy investment erodes in 2010, politicians, especially ones up for re-election, will get the message and adjust their influence accordingly. That’s why it’s so important that clean energy companies show that they can produce the technologies they have promised, with the benefits that they have promised, at a cost that the majority of the public can afford.

On September 2nd of this year the New York Times published a story titled, Energy Company Calls Halt to Drilling Project. The main reason the project was halted was due to the fact that AltaRock was unable to drill a sufficient hole, only going down about 800 feet from their starting point of 3,200 feet. In order to move forward the NY Times story states that the drilling needed to reach 12,000 feet. Concerns about the project were already inflated at the time of the shutdown due to the fact that a similar effort in Switzerland had been blamed for an earthquake.

At the time of the original announcement we had our doubts about the viability of the project.

EGS may be indeed be a viable clean energy generation technology. It is also a very a risky and expensive technology that yields its share of negative environmental impacts.

Unfortunately it appears that our instincts were correct. There’s no such thing as a free lunch in power generation. If you want to extract power from the earth the earth makes you pay a heavy price. In this case the price seems to have been too high for AltaRock, their investors and the State of California. AltaRock Energy indicated in their official press release that they continue to seek out other enhanced geothermal projects.

We are continuing with the development of our EGS technology and are currently evaluating a number of alternative well locations, at the Geysers and elsewhere for demonstrating this technology.

While conventional geothermal technology relies on underground caverns that are filled with water or steam to produce energy, EGS technology injects water into dry holes, thus greatly expanding the number of possible sites that may yield power.

A 2005 study by the Massachusetts Institute of Technology (MIT) assessed the possibility of wider EGS development. The MIT study concluded that, “The potential of EGS in evolving U.S. energy markets is large and warrants a comprehensive research and demonstration effort to move this technology to commercial viability”.

The Director of Climate and Energy Initiatives for Google.org says that, “EGS could be the ‘killer app’ of the energy world.” The challenges in developing meaningful production of energy from both standard geothermal and EGS are many though.

The MIT report notes that, “…the main constraint is creating sufficient connectivity within the injection and production well system in the stimulated region of the EGS reservoir to allow for high per well production rates without reducing reservoir life by rapid cooling.” So when you inject water into a dry hole that is hot, the rocks in the hole will get cooler over time. No one seems to know exactly how fast the rocks will cool. This fact raises the possibility that repeated drilling will be necessary in order to continue to exploit the geothermal resources in a particular location.

The impact of the drilling related to EGS is likely to be an issue that limits future development. According the Department of Energy, “Drilling a well and testing the temperature deep underground is the only way to be sure a geothermal reservoir really exists.” So in order to find your resource lots experimental drilling will have to occur. And the holes drilled are thousands of feet deep which means significant time and cost is involved.

The need to inject water presents another potential problem for EGS developers. Where will the water be pumped in from? How much water is needed to maintain production? These questions will be of great concern to the municipalities that govern the lands used in the production of this power.

EGS may be indeed be a viable clean energy generation technology. It is also a very a risky and expensive technology that yields its share of negative environmental impacts.