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A US geothermal renaissance?

21 July 2021 Keiron Greenhalgh

Interest in geothermal power in the US is growing outside of the typical circles for and backers of the technology, foreshadowing a possible renaissance in one of the first renewable generation sources of the industrial age.

As a 24-7, clean energy source, geothermal is ripe for scaling up as the world heads down the path to carbon neutrality, observers say. Its ability to partner with intermittent generation and boost production of one of the key metals in the energy transition offering even brighter prospects beyond the more obvious impact of providing zero-carbon power.

The US is the biggest geothermal power market globally, according to BP's Statistical Review of World Energy, released on 8 July. Geothermal energy has been in use in the US since at least 1892, US Department of Energy (DOE) data show.

Current US geothermal power generation nameplate capacity is 3.673 GW from 93 power plants, according to a study published 13 July by the National Renewable Energy Laboratory (NREL). Overall US generation capacity as of February 2021 was 1.2 terawatts, according to the American Public Power Association.

Source: NREL

And in the coming decade, according to IHS Markit calculations, even assuming no major technological developments, the US is set to add 1 GW of geothermal capacity, a 27% increase on current capacity.

Others see much greater potential.

Improved technologies could help increase US geothermal power generation nearly 26-fold by 2050—the deadline for the Paris Agreement—60 GW of baseload capacity, according to the 2019 GeoVision study by DOE.

Optimization of permitting could cut development timelines in half, leading to a doubling of geothermal additions—compared with business-as-usual scenarios—to 13 GW by 2050, according to DOE's Office of Energy Efficiency and Renewable Energy.

Just like carbon capture and sequestration, geothermal technology has been around for a while; what is changing is how people are looking at the sector, IHS Markit Research and Analysis Director Carolyn Seto told Net-Zero Business Daily separately.

The supply chains are very well developed, the capability is there, the technology is there, and so it seems like it could be deployed at scale very readily, analysts say.

Perception

The problem until now was perception.

"The fact that geothermal been around for 100 years … is something that's really great in a certain context, because customers understand it. But then the flip side of that is it makes it seems sometimes like an old and stodgy industry," Timothy Latimer, CEO at geothermal developer Fervo Energy, said during a discussion at IHS Markit's CERAWeek conference in March.

A true technology breakout needs policy support, commercial demand, and the technology at the same time, Latimer said, but just two legs of the stool were in place at the end of the first decade of the 21st century.

At that time—the last occasion when enough funding and enthusiasm was even close to being available in the US—geothermal struggled to overcome a perception it couldn't meet the needs of the peak demand cycle.

And yet geothermal plants can operate flexibly to provide ancillary and grid reliability services, be it grid support, regulation, load following, spinning reserve, non-spinning reserve, replacement, or supplemental reserve, according to NREL.

Geothermal plants at the Geysers—a 13-strong fleet of geothermal power plants developed in the 1960s that still supplies 10% of California's renewable energy—used to offer flexible modes of generation. That type of activity ended in the early 1990s due to low demand, high operations and maintenance costs from the additional stresses placed on equipment, and the lower costs of hydroelectric, coal-, and natural gas-fired generation.

The Geysers could provide flexibility to balance the grid as California ramps up its renewable capacity, according to a paper published in the Journal of Energy Resources Technology by researchers from the Lawrence Berkeley National Laboratory. They estimate about 350 MW of flexibility.

OK, Google

Information technology giant Google entered the geothermal space in May hoping to boost flexibility.

Google inked a deal involving what the company called a "first of its kind, next-generation geothermal project," working with the Latimer-led Fervo to develop artificial intelligence and machine learning that could boost the productivity of geothermal and make it more effective at responding to demand.

More technology developments in the space involve work on what are known as enhanced geothermal systems (EGS). Such systems allow heat stranded in low-permeability rocks to be utilized for geothermal energy production, greatly expanding the potential formations for geothermal installations. Permeability can be increased with hydraulic (or mechanical) stimulation, creating hydraulic linkages between two or more boreholes to allow fluid circulation.

EGS "harness the clean, renewable energy that lives right beneath our feet—available at any time, in any weather, in any part of the country," Secretary of Energy Jennifer Granholm said 30 April in a statement when offering additional $12 million in EGS funding. "This new funding will help us tap into its enormous potential to power millions of homes and businesses, reduce carbon emissions, and put thousands to work in greener, good-paying jobs."

An alternate type of emerging technology involves closed-loop geothermal (CLG) energy systems, which use sealed wells to circulate a heat transport fluid through the subsurface, eliminating the need for geothermal fluid flow from permeable rock formations. CLG may be able to produce heat and power within a wide range of temperature and rock conditions, including low-temperature sedimentary zones and high-temperature dry rock formations. CLG also increases the number of viable geothermal projects because it can be used in previously unproductive geothermal wells. Eavor Technologies' Eavor-Lite Demonstration Project in Alberta is a full-scale prototype CLG system.

One CLG system attracting attention from an atypical partner is Controlled Thermal Resources' (CTR) Hell's Kitchen plant in California's Salton Sea—which offers another role for geothermal in the decarbonization push underway across the US.

With the help of investment from US automaker General Motors, CTR's closed-loop, direct extraction process will recover lithium from geothermal brine. The lithium will be produced through a closed-loop, direct extraction process that results in a smaller physical footprint, no production tailing, and lower CO2 emissions when compared to traditional processes like pit mining or evaporation ponds, said GM.

A "significant" amount of the battery-grade lithium hydroxide and carbonate needed for future GM electric vehicle batteries could come from Hell's Kitchen, the company said, aiding GM's plans to sell only electric versions of its light-duty vehicles by 2035. The first stage of the Hell's Kitchen project is expected to begin yielding lithium in 2024.

"The greatest value creation is often in first-mover advantage and we see that in this deal," Grant Thornton National Managing Partner, Energy Bryan Benoit told Net-Zero Business Daily, adding that deals such as the Hell's Kitchen venture may also help the US compete against China in lithium manufacturing. The Biden administration released a battleplan for strengthening the US lithium-ion battery industry 8 June.

Helping everyone else out

Yet another direction for growing one of the oldest of renewable technologies is to marry its advantages with those of a newer option, while also helping out the rest of the grid.

Solar hybrid plants offer geothermal an advantage because the brine can be heated up, reciprocally, the geothermal fluid can serve as a storage entity for the power generated by a photovoltaic array or concentrated solar power facility.

One of the first of these in the US is Italian energy company Enel's Stillwater plant in Nevada, which consists of a 33-MW geothermal power plant, a 26-MW dc solar photovoltaic power plant, a 27-MW dc PV plant, and a 2-MW solar thermal plant.

The plant combines the continuous capacity of medium enthalpy geothermal resources, binary cycle geothermal power, solar PV, and solar thermal, which its backers say is unique. The output of the 27-MW PV plant is sold to the Wynn Las Vegas resort.

A medium enthalpy resource involves temperatures between 100 and 150 degrees Celsius, whereas the more typical high enthalpy system involves water and steam between 200 and 300 degrees Celsius. Binary cycle geothermal uses a heat exchanger and secondary fluid unlike a more basic dry or flash steam system.

Earlier in July, Enel bought a 3.2-GW portfolio of US solar and solar-plus-storage projects from Dakota Renewable Energy. The projects are expected to be online in 2023, Enel said.

New opportunities

Despite geothermal's advantages, growth has been slow in recent years. From the end of 2015 through the end of 2019, the US brought seven geothermal power plants online in Nevada, California, and New Mexico, adding 186 MW of nameplate capacity.

US developers have a combined 58 active projects and prospects across nine states, with a majority located in Nevada, the study found. Of these projects, five are in Phase IV, the phase immediately preceding project completion. Three are located in Nevada, and two are in California.

The Biden administration is keen to change that, ramping up output and boost efficiency at new and existing operations, including by offering plenty of incentives.

DOE on 10 June announced a Funding Opportunity Announcement for up to $14.5 million to support active field testing of EGS technologies and techniques within existing wells.

The agency on 30 April announced up to $12 million in funding for technologies that can make geothermal systems more efficient for clean, renewable energy production. A week earlier, DOE announced up to $15 million for the research and development (R&D) of innovative subsurface geothermal technologies.

On 24 February, DOE announced that its Frontier Observatory for Research in Geothermal Energy Initiative (FORGE) at the University of Utah has selected 17 projects to receive up to $46 million in funding for EGS opportunities. Much of the US' EGS work takes place at the FORGE site.

As DOE Geothermal Technologies Office EGS program manager Lauren Boyd puts it: "Right now, the subsurface is controlling us, and we want to be able to control the subsurface."

The recent NREL study shows "the geothermal industry is poised to make big leaps into enhanced geothermal systems and the heating and cooling sector," said Acting Assistant Secretary for Energy Efficiency and Renewable Energy Kelly Speakes-Backman. "These strides outline the potential for the widespread deployment of this important renewable resource."

Further strides to expand US geothermal capabilities will be taken in October with the US government's annual lease sale. On 10 June, the US Bureau of Land Management (BLM) said it planned to offer 11 geothermal lease sale parcels, totaling approximately 32,527 acres on 5 October. The parcels are located in Utah's Millard and Beaver counties.

Oil and gas lease sales on federally managed US lands and waters were paused not a week after President Joe Biden's inauguration, but geothermal could provide a new option on such lands for oil and gas companies to use existing skills and technology, analysts say.

This geothermal sale would support President Biden's goal of creating a carbon pollution-free power sector by 2035, including at least 25 GW of solar, wind, and geothermal production on public lands by 2025, BLM said.

As with oil and natural gas leases, BLM does not nominate lands for geothermal use, industry does, and then BLM starts the review process that could lead to leasing.

Lateral wells

Lateral wells and hydraulic fracturing (fracking) transformed the US gas and oil sector in the first two decades of this century, and observers see similar potential for the former in the geothermal space.

There are two philosophies emanating from the oil and gas sector for the energy transition, IHS Markit's Seto told Net-Zero Business Daily, the first is starting from scratch with low-carbon ventures, while the second is building on the capabilities a company already has.

The momentum is likely to build rapidly, say observers. "It takes a long time for companies to have a Eureka moment," Jamie Beard, executive director, The Geothermal Entrepreneurship Organization at University of Texas at Austin, said during the CERAWeek discussion, adding that the past 18 months have seen a gradual grind to reaching that moment.

"The fun thing is that when one entity comes out, the ones that are a little bit behind go faster because they feel like they're behind, and you see that that's starting to happen now in the oil service sector," she said, adding that this was taking now place in months instead of years.

"You are seeing startups spin out of oil and gas, you're seeing 40-year oil and gas veterans starting geothermal companies, and they're all applying knowledge and technologies and methodologies and expertise that was developed wholly in oil and gas and I think just really exciting and it's really pushed the gas on traction over the past couple of years," she said.

On top of that, existing oil and gas companies are also exploring the possibilities of the geothermal sector, especially Chevron. The California-headquartered energy company on 1 March announced an investment in Baseload Capital, a Swedish firm focused on development and operation of low-temperature geothermal and heat power assets. Existing Baseload Capital investors include Microsoft founder Bill Gates' Breakthrough Energy Ventures vehicle.

Baseload Capital currently operates in Japan, Taiwan, Iceland, and the US. Chevron said the deal would expand its insight into low-temperature power generation and CLG technologies.

The Baseload investment followed not a month after Chevron took part in a funding round for CLG group Eavor Technologies.

On 16 February, Calgary-based Eavor Technologies completed a $40-million funding round to help commercialize its technology and scale up its project pipeline. Eavor hopes to power the equivalent of 10 million homes by 2030 with its take on geothermal. The investors include Chevron, bp Ventures, Singapore-based Temasek, and US utility Eversource.

Eavor argues that, unlike typical geothermal operations, its technology is a "scalable 'go anywhere' solution." A low enthalpy geothermal energy plant such as Eavor's does not utilize underground hot water reservoirs, it pumps water down to a depth of 1 to 5 km and uses the hot rock to heat the water, which is then pumped back to the surface to power an organic ranking cycle electricity generating system.

That combination of new players such as Chevron, GM, and Google—especially with their deep pockets and experience in a variety of complementary areas—hints at a 21st century renaissance for a technology that came of age in the 19th century.

Posted 21 July 2021 by Keiron Greenhalgh, Editor, Climate & Sustainability Group, IHS Markit

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