Prime Movers Lab Webinar Recap: Geothermal is a Must for 100% Clean Power

Highlights from our discussion with two geothermal startup CEOs, one focused on innovative drilling and the other focused on open-loop fracking, and an economist turned technology advocate and policy reformer. Recording linked here.

Last week, my colleague Carly Anderson and I moderated a lively discussion on geothermal energy. A huge thank you to our amazing panelists and to our audience for their engaging questions!

Highlights:

Theme #1 — NOW is the right time to develop geothermal energy

• Quaise CEO Carlos Araque framed the scale of the energy transition problem: by 2050 global energy demand will be around 30 terawatts of power. (This is ~50% higher than today’s energy usage, per the US Energy Information Administration.) If we are serious, as a species, about 100% energy transition away from fossil fuels, then geothermal must become a much larger part of the power generation mix. Reaching the decarbonization goal requires more than just weather-dependent renewables such as wind and solar, as shown in the below charts.

The OECD member countries (38 nations in the developed world) are able to slightly reduce their carbon emissions but the developing world will still be reliant on fossil fuels unless an affordable alternative can displace them. [Charts from IEO2021 report.] (List of OECD member countries.)

• Carlos also enumerated the benefits of geothermal power generation: it’s baseload power that doesn’t require storage and has no waste involved. Geothermal is “energy security for decades” and a truly global resource if you can tap it.
• Fervo Energy CEO Tim Latimer talked about why geothermal isn’t more widespread. While geothermal energy is a 100-year-old technology, the first site location was in Italy in 1904, the unit economics haven’t been favorable for widespread development due to the cost of drilling deep. The original tranche of geothermal development projects 60 years ago in Northern California, New Zealand, and Italy happened because the resources were shallow enough that advanced drilling techniques were not necessary. For 50 of the last 60 years, the technology curve had not kept up with the needs for geothermal resources at greater depths and/or in less flowing geological regions. Advances in the last decade from the oil and gas industry have led to a number of exciting new technologies that are emerging now:

1. Extracting more power from lower temperature resources (e.g. Climeon)
2. Drilling cheaper and deeper (e.g. Quaise)
3. More flow control and flexibility to respond to the grid (e.g. Fervo, Eavor, Sage Geosystems, GreenFire)

Theme #2 — New technologies are unlocking geothermal at scale

• Senior Research Fellow at the Center for Growth and Opportunity at Utah State University Eli Dourado defined Enhanced Geothermal Systems and their two distinguishing features. Traditional geothermal systems have been hydrothermal — a co-location of near-field surface heat plus a natural sub-surface water reservoir. Enhanced geothermal systems can be thought of as “hot dry rock” and their first distinguishing feature is whether the working fluid is supercritical or not (temperature requirement). The second distinguishing feature is open vs closed-loop cycles. [To learn more see the DOE’s GeoVision 2019 report.]

The US Department of Energy’s Geothermal Technologies Office predicts that with technology improvements unlocking Deep Enhanced Geothermal Systems up to 8.5% of the US power generation will come from geothermal energy in 2050, compared to 0.4% today. [Ref: pg 67–68 of DOE GeoVision 2019 report.]

• Open-loop cycles, like Fervo’s technology, leverage the advances in fracking to open up enough surface area to have a decades-long productive well life by balancing the convective heat transfer of the pumped water with the conductive heat transfer of the hot rock. Closed-loop cycles, such as Eavor’s technology, require much more drilling and casings but provide responsive tunable power. There is also the option with a closed-loop system to use a different working fluid than water, such as supercritical carbon dioxide (sCO2), which reduces the size, cost, and maintenance of the power plant turbomachinery. Sage Geosystems and GreenFire are both leveraging sCO2 for their geothermal power systems.
• Hotter geothermal is better: it’s more powerful and more efficient. Carlos brought up the point that thermodynamic efficiency increases as turbine inlet temperature increases. To reach these supercritical working fluid efficiency gains, one must drill to temperatures at 300–500℃. At these temperatures, one could repurpose existing fossil fuel power plants and reuse the existing steam turbines.

Theme #3 — The heat beneath our feet is bountiful

• The map below shows that the Western United States has bountiful geothermal that’s “easier” to access, as it’s within the sedimentary basin. To unlock geothermal for the Eastern US, one would need to drill to 15–20km, well into the basement rock. (That depth is not doable with today’s existing drilling technologies. Oil & gas drilling rigs are not set up for the basement rock, which is more akin to drilling a mine. Directed energy drilling technologies, such as Quaise’s mm Wave drilling tech spun out of MIT, are the most promising approach for cost-effective drilling at those depths.)

Temperatures at 10km depth. [Ref: Blackwell, et al., 2011, “Temperature at depth maps for the conterminous US and geothermal resource estimates”, GRC Transactions, 35.]

• Tim shared the following statistics from an NREL report: there is 100 GW of potential between 3–4km depth in the US (which we can access with drilling technologies developed in the last 10 years). Between 4–5km that potential increases to 1000 GW (size of US electric grid). These numbers are untapped potential, which doesn’t mean they are in locations where it makes sense to develop the resource. (That’s where drilling even deeper comes into play.) That said, there is a lot we can access today, such as what Fervo is doing in their partnership with Google to provide geothermal power to their data centers.

Theme #4 — Reducing the Levelized Cost of Energy (LCOE)

• The goal is an LCOE of 1–3 cents/kWh for geothermal power! That cost target enables the electrification of transportation, the energy transition, and economic growth. Power plants are half of this cost. The other half is the subsurface development including operating the capital costs.
• Geothermal CAPEX costs are a function of how much non-productive time you incur during the drilling process. In traditional drilling, the downtime to replace broken drill bits or other down-hole components like motors skyrockets development cost (drill for a few hours then spend days to fix things, rinse & repeat). Renting a drilling rig costs $100,000/day!
• Carlos shared the cost target for Quaise : $1,000/m to drill consistently into the basement rock. (That is on the order of what the oil & gas industry does today to drill into the sedimentary layer.) Trying to use a traditional drilling approach for basement rock ends up costing $100,000/m, two orders of magnitude more expensive.
• Tim recounted an anecdote on conventional drilling advances, with project time decreasing from 45 days to 17 days over his early career years in the US natural gas fracking industry. He noted that the improvements he saw over that time were due to improved drilling consistency rather than drilling speed. Tim also described Fervo’s developments in horizontal drilling techniques to get more energy output per well by flowing a higher volume of working fluid from the injector wells to the producer wells.
• Geothermal also has a financing cost problem. Unlike other renewables, banks look at the track record of geothermal and assume 8–10 year construction timelines. ~30% of the cost of a geothermal powerplant is maintaining the financing over that long time period. No reason it needs to take that long — majority of the time is waiting on permits!

Theme #5 — Regulations need an overhaul

• If you want to drill a geothermal well in the United States you have to go through a huge amount of redundant environmental reviews and processes that require hundreds of pages of paperwork and take an average of 4.5 years to complete. Eli has written extensively about energy development policy and has even testified before Congress on it. A few of the common-sense suggestions he’s provided to improve the National Environmental Policy Act include: updating categorical exclusions every 5 years based on data (e.g. the oil & gas industry has exclusions while geothermal does not), time limits (2 years to complete), and page limits (150 pages).
• The court of public opinion is afraid of Induced Seismicity, but there hasn’t been a major issue from a geothermal drilling project causing that type of event. These fears have stemmed from the experiences of people in Oklahoma and West Texas who have seen an increase in human-induced earthquakes from fracking. These seismic events are not due to the drilling itself, but rather due to the reinjected wastewater increasing sub-surface pressure to extract the natural gas from these deposit sites. Geothermal is different because it doesn’t put any net fluid into the ground that would build up the sub-surface pressure. Key takeaway → don’t let the NIMBYs and BANANAs stop yet another source of bountiful carbon-free energy from being developed!

Another huge heartfelt thank you to our panelists, whose bios are linked below.

Panelists:

Carlos Araque is CEO of Quaise Inc, an energy company working to scale geothermal to terawatts via novel deep drilling technology. Prior to Quaise, Carlos worked for 15 years at Schlumberger, one of the leading technology companies in the oil and gas industry.

Tim Latimer is founder and CEO of Fervo Energy, an energy company that commercializes technology to develop, own, and operate geothermal assets as the dispatchable foundation to a 100% clean energy future. Tim was previously a drilling engineer with BHP who left the petroleum industry in 2015 to pursue an MBA/MS in Environment and Resources from Stanford University. Tim is a fellow at Activate and the Clean Energy Leadership Institute.

Eli Dourado, is a senior research fellow at the Center for Growth and Opportunity at Utah State University. His work focuses on finding policy solutions to unblock transformative new technologies. Before joining the CGO, he was the first policy hire at Boom Supersonic (a Prime Movers Growth portfolio company) and directed the Technology Policy Program at the Mercatus Center.

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