Hunting for Geothermal Treasure: How Zanskar De-risks a Critical Energy Source for the Renewable Energy Transition
By Peter Ortez, Senior Associate
In the ongoing quest to decarbonize our world, perhaps the most fundamental challenge is expanding the availability of clean renewable energy. Many of the most promising recent green innovations lose their net-zero promise if they are powered by fossil fuels. For example, without renewable energy to charge their batteries, electric vehicles are effectively coal or natural gas-powered vehicles in disguise.
The explosion of wind and solar development¹ in recent years has massively expanded the availability of renewable energy, but these weather-dependent energy sources have one inherent disadvantage limiting their impact: intermittency. Because there will always be occasions in which solar and wind cannot produce energy — at night, and when the wind is too weak or strong — solar and wind cannot fully replace coal and gas plants as baseload energy.
To truly decarbonize the world, we need new sources of renewable baseload power. And we just so happen to have a massive untapped source right beneath our feet. Geothermal energy (thermal energy stored in the earth’s crust), has the potential to supply the planet with up to 200 GW of clean energy annually. This is just from identified resources alone, not including the estimated 2 TW stored in hidden, currently unidentified resources².
Geothermal energy emits roughly 5% of the carbon dioxide of conventional coal-powered plants and, unlike solar and wind, is a 24/7 ‘always on’ source of power. The production of geothermal energy has deep historical roots, being used for heating by the ancient Romans and for power extraction dating back to the early 20th century. Geothermal can leverage the extensive supply chain, industrial base, and talent pool currently in use by the Oil and Gas industry.
All this to say: We at Munich Re Ventures believe geothermal has the potential to be a critical piece of the energy transition.
Despite this potential, geothermal energy remains a relatively small portion of the global energy mix. Estimates of total worldwide capacity amount to just 1% of the total energy mix, with 15.4GW of installed capacity, 24% of which is installed in the US. With the urgent need to decarbonize our energy sources, why have so few geothermal assets been developed? The answer, as is the case with most of MRV’s areas of interest, comes down to risk.
While it is relatively simple to identify large areas with geothermal potential, the commercial viability of geothermal projects is heavily influenced by hyperlocal effects in all three dimensions. Even if one can predict with high probability the presence of geothermal resources in a specific area, identifying exactly where and how to drill for such resources remains a significant challenge — so much so that nearly 1/3 of all geothermal wells turn out to be ‘dry holes’ incapable of producing any energy. With the high cost of drilling these wells, geothermal prospecting remains incredibly risky. It is precisely these risks that hinder the bankability of geothermal projects.
But what if geothermal exploration wasn’t so risky? What if you could better predict where to drill, how to drill, and where to find geothermal assets where nobody else is looking? What if you had the equivalent of a geothermal treasure map? This would invert geothermal economics and enable profitable exploration for not only the current state of the industry, but also for advanced techniques currently in development that could dramatically increase the potential of geothermal energy to supply the world with clean renewable power. In that case, you would be Zanskar.
Zanskar is a data-driven geothermal exploration company bringing the Big Data and Machine Learning revolution to the energy sector. Led by founders Dr. Carl Hoiland and Dr. Joel Edwards, Zanskar aims to change the cost equation for geothermal development by leveraging a treasure trove of proprietary geothermal data and cutting-edge machine learning techniques to dramatically reduce the risk of geothermal prospecting. By building an AI-powered digital layer, Zanskar takes the guesswork out of geothermal development’s riskiest stage, opening up the potential to profitably unlock the tens of billions of dollars of resources underneath our feet.
Munich Re Ventures is committed to supporting the global energy transition, and is proud to join Union Square Ventures, Lowercarbon Capital, Prime Impact Fund, Safar Partners, Grantham Foundation, and First Star Ventures in backing this revolutionary endeavor.
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² https://www.ipcc.ch/site/assets/uploads/2018/03/Chapter-4-Geothermal-Energy-1.pdf
