Geothermal is heating up!

Don’t miss out on the hottest renewable energy source

Gigaton Potential

Geothermal is hot! Project Drawdown projects that geothermal power will contribute to the avoidance of 6.15 GT to 9.17 GT of CO2 emissions globally between 2020 and 2050. The Department of Energy projects that within this timeframe 1.8 GT of CO2 emissions will be avoided in the United States.   

You Might be Interested If…

1. You are looking for a reliable and proven renewable energy source

2. You have a retired well and aren’t sure how best to make use of it (wishing well or geothermal well?)

3. You believe in the ability to harness our earth’s inner core to power our planet

What You Should Know

What is geothermal?

Derived from the Greek terms “geo” (earth) and “therme” (heat), geothermal energy is a form of renewable energy generated from the flow of heat below the Earth’s surface. The heat from the Earth’s core, a not-so-cool 10,800 degrees Fahrenheit, is a result of the original formation of the planet and the continuous natural decay of radioactive elements. Geothermal systems tap into this thermal energy source for electricity, heating, and cooling. The main types of geothermal systems are:

• Geothermal Power Plants: Geothermal dry steam, flash steam, and binary-cycle power plants use hydrothermal resources for electricity generation. Hydrothermal reservoirs of hot water or steam can be accessed for energy production at high temperatures (300 to 700 degrees Fahrenheit) through wells (±2 miles deep) and be used to power turbines that generate electricity

• Direct-Use: Geothermal resources at low-to-moderate temperatures (120-300 degrees Fahrenheit) are used directly for heating and cooling buildings or entire districts. They are also used in greenhouses, aquaculture, and food processing. In traditional direct-use systems, heat is transferred to the surface through hot springs. In modern direct-use systems, heat is transferred through wells, hundreds to thousands of feet deep, and mechanical systems (e.g., heat exchangers, pipes, and controls).

• Geothermal Heat Pumps: These systems leverage heat at shallow depths (4 to 400 feet) to produce low-grade thermal energy (45 to 75 degrees Fahrenheit). Geothermal heat pumps are used for the direct transfer of thermal energy to residential or commercial buildings. There are two types of commonly used geothermal heat pump systems.

§  Closed Loop: Heat exchange fluid is circulated through a heat exchanger, a closed loop of horizontal or vertical pipes underground. Heat is then transferred between the ground loop and the building through a heat pump.

§  Open Loop: Hot groundwater presented in a nearby well or reservoir is used as a heat exchange fluid. The hot water rises naturally or is transferred through a heat pump for direct use and then returns to its original site or a separate discharge site depending on local codes.    

• Enhanced Geothermal Systems: These systems enable geothermal energy production from hot rocks at temperatures over 300 degrees Fahrenheit with low natural permeability. Man-made geothermal reservoirs are created through the injection of fluids into wells (≥2 miles deep) which transfer the stranded heat from the rocks to the surface. The heat is then used directly or converted into electricity via a turbine. It’s worth noting that the deployment of enhanced geothermal is far behind that of geothermal power plants and heat pumps. However, the technology has tremendous potential. New enhanced geothermal drilling, reservoir simulation, and construction technology can lower construction costs and increase the permeability of rocks. It can allow for the use of retired oil and gas wells and geothermal resources that are not located in areas with existing geothermal reservoirs. 

What are the benefits and risks?

Benefits  

• Energy Security: Compared to wind and solar, geothermal systems are not reliant on certain weather conditions, allowing a consistent and reliable flow of energy 24/7. Powered by the continuous flow of heat from below the Earth’s surface, geothermal is not subject to volatile fuel prices or energy insecurity.

• Clean: Geothermal energy is clean compared to other energy sources. Geothermal power plants have one-fourth of the lifecycle emissions of solar PV and one-sixth of those of natural gas. They also require less land per gigawatt hour of energy produced than coal, solar PV, or wind. Geothermal heat pumps, relative to air-source pumps, reduce emissions by up to 44%. Enhanced geothermal systems emit negligible emissions. Geothermal requires minimal water use; it is estimated that by 2050 it will only account for 1.1% of all power-sector water use.

• Economics: Geothermal power plants have a capacity factor of 90% plus, enabling them to operate consistently at maximum capacity relative to renewable energy sources like wind and solar, which have lower capacity factors. The levelized cost of energy is also lower for geothermal than offshore wind or residential rooftop solar. Geothermal costs may be further lowered by the US government’s efforts to cut costs by 90% to $45 per megawatt hour over the next decade. Energy savings can also result from geothermal systems’ lifespans and efficiency. Geothermal heating pumps have a 25% greater lifespan than conventional furnaces, and they are 200-300% more efficient. Per Dandelion Energy, this contributes to energy savings of over $2,000 annually for residential units.

• Massive Supply: Only 0.1% of heat from the Earth’s core is needed for geothermal to meet global energy demand for 2 million years.

Risks

• High Upfront Costs: Pre-drilling and drilling activities account for 30-50% of development costs, a significant portion of geothermal upfront costs.  

• Environmental Impact: If not properly contained in a pipe, geothermal water can absorb natural but harmful substances (arsenic, boron, and fluoride) that are carried to the earth’s surface. Similarly, trace amounts of naturally occurring carbon dioxide and hydrogen sulfide can be released by geothermal power plants if they are not contained (as they would be in a binary plant). There are also concerns about drilling’s ability to create micro-earthquakes and contribute to subsidence.

• Permitting and Financing Barriers: Geothermal is subject to lengthy and complex federal permitting requirements, which threaten the viability of new projects. Difficulty accessing financing for geothermal projects has also historically extended geothermal project development timelines.

• Reservoir Depletion and Reinjection Challenges: Geothermal reservoirs can become depleted over time. Corrosion or clogging of wells can also present challenges.

Key Players 

The geothermal market is expected to grow at a CAGR of ~6% to $9.4B in 2027. The current market is $6.6B, per Market Analysis. Below are a few key players (at different stages of development) in the geothermal market:

Within each market segment, companies to highlight include:

• Ormat: One of the largest geothermal power operators in the world, Ormat has built over 190 geothermal power plants with 3,200 MW capacity across the globe. The company leverages both conventional and binary steam technology.

• Dandelion: Increasingly a dominant player in the geothermal heat pump market, Dandelion installs systems for residential use.

• Fervo:  Using directional drilling technology, the company developed the first-of-its-kind commercial enhanced geothermal system in Nevada that can produce 3.5 megawatts of energy. Fervo is working on building out several sites across the Western US.

• Sage Geosystems: The company is creating a battery system that allows for energy to be stored and transferred between the grid and geothermal systems.

Opportunities for Innovation

🔬Exploration: A significant barrier to geothermal adoption is the upfront costs of assessment, drilling, and construction. Innovative technology that increases the efficiency, depth, and precision of drilling can lower installation costs and increase systems’ capacity. For example, drilling innovations could allow for the access of superhot rock energy at temperatures over 700 degrees Fahrenheit and over nine miles deep, producing 5–10 times the energy of existing geothermal systems at costs competitive with natural gas.  Advancements in simulation software can also mitigate development risks by improving the certainty of geothermal reservoir conditions.

🛠️System Components: Enhancements to geothermal systems components (e.g., heat pumps, heat exchangers, and heat transport fluids) could improve systems’ efficiency and longevity. 

💲Additional Value Streams: Valuable byproducts can be recovered from geothermal power production using innovative extraction and refinement techniques. These byproducts include lithium and other in-demand minerals (e.g., zinc, silica).

🔋Next-Gen Storage: Innovations in geothermal storage can allow excess geothermal energy to be stored and energy output to be adjusted to meet fluctuations in demand.

🔗Energy Integration: Hybrid technology can enable the integration of geothermal with other renewable energy sources like solar, providing a reliable and cost-effective alternative to pure geothermal. Smart grid systems can also allow geothermal plants to be integrated into a larger energy grid.   

Read more:

There’s a Vast Source of Clean Energy Beneath Our Feet. And a Race to Tap it., NYT

How a Former Oil Guy Is Using Fracking Tech to Boost Geothermal Energy, Time

Could geothermal become a major zero-emissions player? Podcast by Canary Media

Don’t Look Up? Look down. Geothermal could help curb climate change, WBUR

Geothermal energy is poised for a big breakout, Vox

Author Bio:

Celi Khanyile-Lynch is a sustainable investor and recent graduate of Harvard Kennedy School and MIT Sloan School of Management. She is also the founder of Green Source Africa, which provides resources to smallholder farmers in Cameroon. On the side, she enjoys running (and eating pastries post-run😊)!