Sedimentary geothermal resources offer a bright future for geothermal energy

Next-generation, or “next-generation,” geothermal resources have the potential to increase U.S. geothermal energy generation twenty-fold by 2050. Next-generation geothermal concepts leverage technologies developed by the oil and gas industry to design reservoirs for geothermal energy generation, significantly expanding the available resource base.

Typically, the term next-generation geothermal refers to enhanced geothermal systems (EGS) or advanced closed-loop systems (AGS), which have gained much attention due to the success of high-profile government and private pilot projects. However, there is another, largely overlooked, next-generation geothermal approach with lower technological risk than EGS and AGS: sedimentary geothermal systems.

Until recently, sedimentary geothermal resources were considered too niche, too expensive, or simply lumped together with EGS. With recent technological advances, cost reductions, and market demand, sedimentary geothermal resources are being viewed as a new, market-ready path to clean geothermal energy.

What are sedimentary geothermal resources?

To produce economic geothermal resources, two key features must be present in the subsurface: sufficient heat and permeability. Conventional geothermal systems (often referred to as “hydrothermal” resources), which power the vast majority of the more than 30 geothermal power plants in the U.S., rely on finding natural fractures in reservoirs to provide permeability (Figure 1). These natural fractures and fracture networks must be very large because geothermal wells require significant flows compared to oil and gas wells to be economical. Due to the limitations of this unique geology, the U.S. has seen limited deployment of geothermal energy, accounting for less than 4 GW of generation.

Sedimentary geothermal resources offer an intermediate approach between conventional geothermal and EGS development by targeting sedimentary rock deposits with high natural porosity and permeability in hot sedimentary basins (Figure 1). The use of horizontal wells drilled into the reservoir can increase the flow rate of production wells and improve project economics. Many areas considered for sedimentary geothermal development are data-rich traditional oil and gas basins, which reduces exploration costs and project risk. A prominent example is the Gulf Coast of Texas, where many companies have explored and developed geothermal power plant projects.

Technical and market readiness

The combination of four factors improved the economic feasibility of developing sedimentary geothermal energy.

First, as with EGS, the economics of sediment geothermal projects are driven by technological advances in the oil and gas industry that have reduced the costs of drilling horizontal wells.

Second, these projects are taking advantage of increasingly efficient surface power generation facilities that can generate power from lower temperatures. This is important because many viable sedimentary geothermal reservoirs are in the 100–150°C range, which is typically lower than the target temperatures for EGS.

Third, because many sedimentary geothermal resources are located in oil and gas basins or near industrially intensive areas, they can be used to power existing oil and gas infrastructure or sold directly to industrial facilities under a behind-the-meter offtake arrangement (for example, an oil and gas producer using geothermal energy to power a nearby gas processing plant).

Finally, the market is signaling that customers are willing to pay a premium for steady, carbon-free electricity generation, especially in areas with high penetration of intermittent renewables that are replacing coal or natural gas generation. The best evidence of this comes from California, which recently mandated that utilities add 1 GW of geothermal or other “steady” carbon-free resources by 2026 to ensure grid reliability as the state builds out its clean energy portfolio.

Sedimentary geothermal energy at work

As the industry considers the exploration and development of new sedimentary geothermal resources in the future, it can look to current developing sedimentary geothermal resources for guidance. One such development is the Salton Sea geothermal fields operated by Ormat Technologies in California’s Imperial Valley.

Another example is DEEP Earth Energy’s project in the Williston Basin in Canada. This greenfield geothermal project is set to be the first utility-scale geothermal power plant in Canada when its first 5 MW pilot plant comes online this year.

Workforce and investments ready to scale

The overlap in skills and infrastructure needed for oil and gas development and sedimentary geothermal projects means that these projects can help oil industry workers transition to a clean energy economy. The Department of Energy (DOE) estimates that there is a workforce of more than 300,000 people skilled in the oil and gas and energy industries ready to support geothermal development. The obvious overlap is in drilling and completion, but subsurface geoscience and reservoir engineering skills can also successfully transition from oil and gas to geothermal. In fact, there are many subsurface oil and gas workflows, such as basin modeling and reservoir quality prediction, that are more applicable to sedimentary geothermal resources than to conventional hydrothermal resources.

DOE is also investing in geothermal development, with another major round of funding coming from the Geothermal Energy from Oil and Gas Demonstrated Engineering, or “GEODE,” program. GEODE, set to launch this year, will provide $155 million over four years for geothermal technology development and demonstration projects, with a focus on technology transfer from oil and gas. Sedimentary geothermal projects are well-positioned to leverage this DOE funding in partnership with private capital—and are poised to play a key role in the energy transition. With the right investment and direction, this emerging resource could accelerate the nation’s path to a low-carbon, sustainable energy future.

—Kellen Gunderson is a project manager at Projeo.