Next-Generation Technologies Are Rapidly Boosting Geothermal Energy’s Commercial Viability

By Joseph MossInternational Banker

ABOUTnce regarded as a niche energy source, largely due to the geographical limitations placed on profitable extraction, geothermal energy is now potentially on the cusp of a major upswing in global demand. Thanks to a new wave of technologies that are opening up significantly more opportunities around the world to exploit this clean-energy source, geothermal has the potential to meet an increasingly substantial share of the world’s clean-energy demand.

Geothermal energy is the heat that comes from the planet’s core. As a renewable natural resource and clean-energy source that can be harnessed for use as heat and electricity, it already represents a significant share of overall power generation in countries such as Iceland, El Salvador, New Zealand, Kenya and the Philippines. According to the International Energy Agency (IEA), 24 countries generated about 92 billion kilowatt-hours (kWh) of electricity from geothermal energy in 2022. “Indonesia was the top geothermal electricity producer at about 17 billion kWh—which was about 5 percent of Indonesia’s total electricity generation,” the IEA observed. “Kenya was the seventh-highest geothermal electricity producer, at about 5 billion kWh, which was equal to about 45 percent of Kenya’s annual electricity generation. Kenya had the largest percentage share of electricity generation from geothermal energy among all countries with geothermal power plants.”

Geothermal energy also meets an estimated 90-plus percent of heating demand in Iceland. “It’s unbelievable how geothermal has gone under the radar. Now, when you see the bills (in) electricity and the gas prices go up everywhere—at least, around us—it doesn’t affect us,” Iceland’s minister for the environment and natural resources, Gudlaugur Thór Thórdarson, told Yahoo News in September 2023. “This can be done all around the world. You don’t need to be the most active volcanic island in the world to use geothermal.”

But to “use geothermal”, heat has traditionally been required from rocks deemed sufficiently permeable to carry water. Normally found in porous volcanic rock close to the surface (such as hot springs and reservoirs), this water will heat up and diffuse upwards towards the surface as hot water or steam. Heating systems can then directly pipe this hot water into buildings through district heating systems, as is often the case for heating buildings in Iceland.

Geothermal-electricity generation, meanwhile, requires water or steam at higher temperatures. Extracting the heat requires deep drilling boreholes to exploit cracks in the rock and thus enable water and steam to flow through them. If the water or steam is sufficiently hot—around 300 degrees Fahrenheit—it can be extracted from the ground. In power plants, hot water is used to power turbines to generate electricity.

While the thermal energy contained within planet Earth is undeniably substantial, only a limited amount of it has been historically exploited for geothermal-energy production—only in locations where water can function as a carrier to transmit heat from the deep underground to the surface. These geothermal wells are often located between two and three kilometers underground, where drilling is fairly shallow and cost-effective.

Key technologies are thus required for this process. “Technologies for direct use, such as district heating, geothermal heat pumps and heating greenhouses, are widely used and can be considered mature,” according to the International Renewable Energy Agency (IRENA), which makes note of the current uses of geothermal technologies with varying levels of maturity in their respective developments. “The technology for electricity generation from hydrothermal reservoirs with naturally high permeability is also mature and reliable, with commercial operations since 1913.”

According to the European Commission (EC), of all renewable-energy sources, deep-geothermal energy has the highest capacity factor—that is, the ratio of net electricity generated, for the time considered, to the energy that could have been generated at continuous full-power operation during the same period—in excess of 80 percent. It is also highly valued as a scalable source of clean energy for industrial-scale power generation, with the International Energy Agency’s Sustainable Development Scenario predicting that global geothermal power will triple from 92 terawatt-hours (TWh) in 2019 to 282 TWh in 2030. And yet the IEA still expects geothermal to represent less than one percent of global energy demand in 2030.

Why has geothermal not taken off around the world in the same way its clean-energy peers, such as solar and wind, have? Geography has been the key limiting factor, with only a modest proportion of the planet being fit for profitable geothermal-heat extraction using existing technologies. Indeed, despite the abundance of thermal energy existing under planet Earth’s crust, enough to theoretically power the entire globe, most of it resides in rock that is deemed insufficiently permeable.

The good news is that those limitations are being addressed via a set of next-generation technologies that are more capably exploiting geothermal heat from areas previously considered not commercially viable. Rocks with low permeability, very shallow reservoirs, very deep reservoirs and areas with low fluid retention for heat exchange are now being opened up by these innovative technologies to extract heat from much broader environments and thus expand the world’s potential geothermal capacity.

Although commercial availability is limited at present, these novel technologies are expected to change the face of geothermal-energy production. They include:

Enhanced or engineered geothermal systems (EGS)which involve pumping water and other fluids to fracture rocks and create artificial reservoirs to stimulate geothermal permeability in areas lacking sufficient transport fluidity;

Advanced geothermal systems (AGS)which involve drilling wide boreholes to create artificial closed-loop circuits where sub-surface rocks heat working fluid;

Supercritical geothermal systemswhich involve very high temperatures and water (or other fluids) in supercritical states (at least 374°C and 221 bar);

Innovative drilling technologieswhich involve higher drilling intensity and more economically efficient drilling using key techniques such as rotary casing, rock spallation and fusion, water-jet erosion, plasma, laser, electron beam, pallets, electric, ultrasonic, chemical, induction, nuclear, forced- flame explosive, turbine, high frequency, microwave and heating/cooling stress rock cutting.

“Next-generation geothermal technologies, such as enhanced geothermal systems (EGS), closed-loop or advanced geothermal systems (AGS), and other novel designs, promise to allow access to a wider range of geothermal resources. Some designs can potentially also serve double duty as long-duration energy storage,” according to the Federation of American Scientists (FAS). “Rather than tapping into existing hydrothermal reservoirs underground, these technologies drill into hot, dry rock, engineer independent reservoirs using either hydraulic stimulation or extensive horizontal drilling, and then introduce new fluids to bring geothermal energy to the surface,” the FAS’ senior associate , Alice Wu, wrote in a January 8 piece for the Federation.

Indeed, these new technologies are also proving crucial for delivering success to Google in its foray into geothermal-based power generation. Partnering with geothermal start-up Fervo Energy, the project has launched the US’ first-ever enhanced geothermal plant that will produce 100 percent carbon-free electricity around the clock. In November 2023, the project announced that it had become operational, with carbon-free electricity starting to flow into the local grid that serves Google’s data centers in Nevada.

“Fervo uses drilling techniques pioneered by the oil and gas industry to harness heat that would have previously been difficult to access. “To tap into this subsurface heat at our site in Nevada, Fervo dug two horizontal wells and installed fiber-optic cables to capture data that shows the flow, temperature and performance of the geothermal system in real-time,” the project reported at its November launch. “The result is a geothermal plant that can produce round-the-clock CFE (carbon-free electricity) using less land than other clean energy sources and drawing on skills, knowledge, and supply chains that exist in other industries.”

With the successful application of next-generation technologies, moreover, the United States Department of Energy (DOE) has indicated that it views geothermal power as having the potential to expand by more than 20 times from the current US-installed capacity, contributing at least 90 GW (gigawatts) of clean, reliable power nationwide by 2050. “Next-generation geothermal energy represents a significant advancement in harnessing the Earth’s heat to generate power,” according to the US Department of Energy. “This innovative approach involves the use of nascent technologies and methods to access and convert geothermal resources into electricity more efficiently and sustainably than ever before. Next-generational geothermal benefits from the long-standing use of geothermal as a power generation technology and features transferrable technology, supply chains, and workforces from the oil & gas sector.”

Looking across the world, moreover, some analysts believe that Latin America could lead the geothermal charge over the coming years, with Rystad Energy identifying the region’s abundant geothermal-energy resources as offering “a promising avenue” for producing clean energy, decarbonizing industrial processes and bolstering energy security. According to Rystad’s research, geothermal investments in the region are set to skyrocket from about $570 million this year to $1.3 billion in 2027 as operational capacity surges from approximately 950 megawatts electric (MWe) to more than 1.4 gigawatts electric (GWe) during the same period in response to more ambitious government targets through 2030 that have already fueled a rise in the number of projects in the pipeline. Indeed, these projects account for around two-thirds of government targets, while the remaining third is set to be fulfilled by projects announced imminently.

“It’s like solar: If you look at solar 20 years ago, nobody’s interested in solar because it costs too much. But as solar has grown, the cost has come down as it’s improved in scale,” Roland Horne, a professor of earth sciences at Stanford University, told Yahoo News in September 2023. “We’re kind of on the cusp of moving into the cost-effective range (for geothermal), just like we did with solar, over the next 20 years.”