KGRA looks to harness low temperature geothermal power

Short Hills, New Jersey-based KGRA Energy is looking to become a modular, small scale geothermal power plant developer. And the company says it can do it without drilling a single well to extract the heat.

The company’s CEO Jason Gold told the Cleantech Group his company provides oil and gas field operators with geothermal electricity harnessed from their existing wells.

Traditional “flash” power plants, which require super-heated steam to power a turbine, use temperatures of 360 degrees Fahrenheit and hotter in their conversion processes.

But there are geothermal developers moving toward lower temperature geothermal applications.

“However, these folks still have to drill for their resource,” Gold said. “This is the very essence of what we avoid.”

KGRA says it is able to generate energy at lower temperatures and using a liquid other than water in a device based on an industrial air conditioner. The organic Rankine cycle device uses a refrigerant to convert heat recovered from the wells into electricity, without releasing emissions.

See a photo of an organic Rankine cycle device here »

KGRA’s device is made by Pratt & Whitney, a division of United Technologies. The machine—which fits comfortably on a flatbed truck—is made on Pratt & Whitney’s existing air conditioning assembly line. Organic Rankine cycle machines have been shown to work at temperatures as low as 160 F under the right circumstances, Gold said.

KGRA has applied for a patent to put the technology toward geothermal uses as well as all the associated elements of making it into a power plant.

“I loved the idea of low temperature geothermal because a developer could go around and buy up the properties which had been explored and found to have temperatures in the 200 to 300 F range, and they could buy them very cheaply because traditional geothermal developers looking for 360 F and up had ignored those properties," Gold said. "It was like making gold out of lead."

Gold said this business model ran into difficulty when the developers had to drill out the properties and weren't as successful as they anticipated. But KGRA thinks it has a way to fix that by using existing wells.

Gold said his company’s business model is centered on building, operating and maintaining the power generation facilities, so there’s no capital investment for the customer.

It’s a unique proposition, he said, given that geothermal companies are facing difficulties raising funds to drill wells.

Last week, a report from the Geothermal Energy Association indicated there’s been a decline in projects under construction, due to difficulty obtaining financing because of the economic downtown (see California, Nevada lead the way in U.S. geothermal growth).

KGRA plans to sell power generated from its plants at a discount to what the customer is paying for power from the grid. Power sales are expected to be structured through multi-year power purchase agreements with KGRA owning the power generation units.

KGRA sees global potential for its technology wherever there’s oil production and smokestacks. Gold said demand exists in the United States, Central and South America, Indonesia, Russia and the Middle East.

A recent report shows geothermal surpassing wind as the most efficient alternative energy technology (see Report says geothermal is leaving wind, solar in the dust).

Gold said his company’s “trade secret” is financing the plants with partnership flip structures, where KGRA partners with firms that have a tax appetite. For instance, a firm would keep 99 percent of the tax credits and 1 percent of the cash flow, while KGRA would keep 99 percent of the cash flow and 1 percent of the tax credit.

He said there are plenty of investors with tax appetites and his company is currently engaged in conversations with “the right ones.” KGRA is looking to announce at least one partner before the end of the first quarter.

Other companies such as ElectraTherm and Gulf Coast Green Energy have been using organic Rankine cycle technology to capture waste heat, but Gold claims KGRA can do it on a larger scale than its competitors.

“We start at 250 kilowatts with your organic Rankine system per machine,” he said.

The U.S. Department of Energy is also working on a new collaboration, between the Office of Fossil Energy and the Office of Energy Efficiency and Renewable Energy's Geothermal Technologies Program, to fund low temperature geothermal electricity generated from a unit of Ormat Technologies.

KGRA is currently seeking $4 million for its Series A round to grow its business development unit. The company is in discussions with potential investors.

Gold, who was previously a portfolio manager and equity analyst on Wall Street, has self-funded the company to date. Founded in January 2009, the company has four full-time employees and one sales agent.

KGRA Energy is one of 10 new clean technology companies the Cleantech Group added to its innovation pipeline this week, available exclusively to members of its Cleantech Network. Members can click here to search the database.

Interested in emerging cleantech innovations? Here are two new companies added to the Cleantech Group's database this week also looking for funding:

• UK-based Evince Technology is seeking $3.2 million in venture capital to continue development of a semiconductor device it says has the potential to improve efficiency in electrical grids, fuel cells and wind turbines. Using proprietary surface engineering techniques, the company embeds tens of thousands of nano-scale electron guns into a diamond substrate that fire electrons into the diamond. Once in the diamond, these then travel through the material with motilities in excess of twice that of silicon. The company plans to launch its Electron Field Emission Transistor and Diode devices in 2010 (see Diamond tech to reduce the cost of renewable energy?).
• New York-based Elevar is seeking $2.7 million in Series A financing to further development of its natural bio catalyst, AgriSaver, for use by producers, distributors and retailers. The catalyst delays the ripening of certain agricultural food products, reduces spoilage and slows the aging of cut flowers. Elevar’s technology, originally developed at the Georgia State University, is protected by two U.S. patents.

Seeking capital, partners or customers? Submit to the Cleantech Group’s innovation pipeline.

Browse past pitches here.

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