Houston: Although geothermal energy represents only a tiny fraction of current US energy production, several businesses and President Joe Biden’s administration are betting on technological advances to make it the backbone of the green transition.
“If we can capture that heat under our feet, it can be clean, reliable, baseload scalable energy for everyone from industry to homes,” Energy Secretary Jennifer Granholm said last week at the CERAWeek conference in Houston.
Geothermal energy, which draws from naturally high temperatures underground and is used mainly to generate electricity and heat buildings, accounted for only 1.6 percent of US energy use in 2022.
Scientists at the site tested a technology known as Enhanced Geothermal Systems (EGS), similar to but different from hydraulic fracturing techniques, also known as fracking, which are used to extract oil and natural gas, in real-world conditions.
The approach involves injecting water into naturally very hot rocks – often more than two miles (3 kilometers) deep, which does not require a nearby hot spring or underground reservoir.
“Theoretically, you could create geothermal energy anywhere,” said Francesco d’Avack, an analyst at S&P Global Commodity Insights.
“It also reduces the initial risk,” he said — meaning the risk of drilling and not finding anything, which has deterred some investors in the past.
Speaking at the CERAWeek energy conference, Granholm highlighted another benefit: the US government allows companies to convert oil or gas exploration permits into geothermal licenses – reducing paperwork and delays.
In a report last week, the Department of Energy said EGS uses fewer chemical additives than conventional fracking, a system condemned by environmentalists.
She added that geothermal drilling does not release hydrocarbons like fracking does.
And unlike solar or wind energy, geothermal energy provides a constant flow of energy regardless of the weather or time of day.
As for costs, the US government estimates they will drop from $70 to $100 per megawatt-hour (MWh) to $45 by 2035.
Using existing drilling technology makes geothermal development faster and cheaper.
“This is a great unlock” – a great leap forward.
“The United States was the first mover” with the new technology, said Ajit Menon, an underground development specialist with Texas-based energy company Baker Hughes, which has invested in geothermal energy.
In other countries, notably France, EGS sites already exist but are considered experimental.
A potential risk of geothermal drilling projects is that, as with fracking, they can cause seismic activity.
In France’s Alsace region, a deep-well project was abandoned in 2020 after triggering several tremors.
No community is said to have felt seismicity occurring near the DOE-funded project.
Several US and Canadian start-ups are vying for a position in this nascent market and have raised hundreds of millions of dollars from investors.
One of them, Fervo Energy, recently connected its plant in Nevada to the electric grid. So far, however, the site is generating only 3.5 megawatts.
As geothermal supply begins to grow, demand follows.
Shah pointed out that the big three firms are “willing to pay a premium” for energy and this “excites the private sector”.
“The new or next-generation market is still pretty wide open,” said Cindy Taff, CEO of Sage Geosystems, which specializes in underground energy.
Since the sector is still so small, “your primary goal is to get it right,” Menon said. “Not just for you – for everyone.
US bets on geothermal to become renewable powerhouse
