In the scramble to develop energy sources for a net-zero future, geothermal is gaining more attention. This shouldn’t come as a surprise. Geothermal energy has been capturing the heat from hot springs and geysers to generate power for more than a century. It also has several advantages over wind and solar, the leaders in the renewable energy race. Geothermal is a proven and dependable source of base-load electricity, which means it can supply a steady amount of electricity 24/7, operating continuously unlike some renewable energy sources such as solar and wind, which are intermittent and dependent on weather conditions. Better yet, it’s far less polluting than natural gas – the cleanest fossil fuel – and requires much less land to generate power than wind or solar farms, according to a new paper by TechEnergy Ventures.

Will these advantages lead to a surge in investment in geothermal energy?

So far, this hasn’t happened. Geothermal accounts for only 0.5% of the world’s installed renewable electricity capacity, with 16 GW installed globally. That’s less than the 38.4% for hydro, 31.6% for solar, 24.9% for wind, and 4.6% for bioenergy in 2022, according to the International Renewable Energy Agency’s World Energy Outlook 2023. Even if changing the conversation from capacity (GW) to generation (TWh), and leveraging geothermal energy’s higher capacity factor compared to wind and solar, geothermal struggles to surpass 1% of the share of renewables.

Geothermal has lagged for several reasons. The first is that it is location-specific, much like oil and gas. To produce geothermal energy, three elements must be found: heat, water, and permeability. These are mostly located near volcanos or magmatic intrusions capped by a permeable rock and fed by meteoric water. To find these sweet spots, exploration and drilling are required. This is not only a costly upfront investment, but the risk of failure more often than not deters exploration.

But what if underground heat could be developed outside these specific hydrothermal anomalies?

That would considerably boost the potential of geothermal. Moreover, taking into account that the so-called supercritical steam of 500°C can be accessed in 70% of the Earth at 10 km below ground and everywhere at 20 km, by overcoming current engineering challenges to harness such heat, geothermal could become the main driver of the energy transition to net-zero greenhouse gas emissions.

Overcoming Challenges

Three challenges must be overcome to make geothermal energy competitive virtually anywhere. The first is that wells must be drilled deep enough to find the temperatures favorable for power generation. Second, the heat must be efficiently harvested from the rocks. Finally, this heat needs to be efficiently converted into electricity.

The first question is how deep do we need to go to capture the necessary heat to produce power. Here is where we can separate geothermal in two categories: Geothermal 2.0 and 3.0.

Geothermal 2.0 refers mainly to using existing and upgraded technologies to expand geothermal development beyond current frontiers, drilling wells to a depth of 3 km to 5 km to develop 200-300°C steam. Drilling innovations and alternative enthalpy harvesting systems such as Engineered Fracture Networks and AGS (Closed-Loops) are required to extend the operational limits of current tools and minimize the dependence on specific subsurface conditions.

But the real breakthrough will come from developing completely new approaches to drilling that will ultimately allow us to reach the necessary depths to capture enough heat to produce 500°C supercritical steam, which can deliver 4-10x the enthalpy relative to a 200°C steam. This is what we call Geothermal 3.0. This hotter steam can also be fed to existing coal power plants, making use of working steam turbines and interconnection capacity to supply electricity at less investment than building new facilities.

The challenge is that the deeper the well and the hotter the temperatures, the higher the costs and risks. New approaches and technologies must be developed to break through the more abrasive rocks, protect equipment, and keep down development costs. Traditional drilling methods, including electronics, elastomers, and sensors, are limited to 250°C. The bottom hole assembly components of a drilling rig still lack mechanical and temperature resistance, leading to frequent shutdowns and more time going in and out of the well every time something breaks. That increases the drilling time exponentially – and costs.

A Technological Precedent

The good thing is that some of the main technical challenges are similar to those addressed by the O&G industry to develop shale rock in the early part of this century. The industry learned over the years to make this possible by focusing on improving drilling efficiency and extending the life of tools. PDC drill bits, for example, have a far better performance than tricone bits, and optimizing drilling efficiency can cut well drilling times by more than half. Hydraulic fracturing made it possible to access the resource from low-permeability rocks. Still, current methods utilized by the O&G industry do not perform as needed in high temperature, pressure, and abrasive geothermal environments. Therefore, further technological developments are key to solving the remaining challenges.

At TechEnergy Ventures, we’re looking for ways to replicate this boom for geothermal, by investing and supporting companies working on the three levers that we think will make geothermal energy competitive anywhere.

Drilling Deeper and Hotter

TechEnergy Ventures has invested in Quaise Energy, a Massachusetts-based start-up spun off from MIT. Quaise is developing a drilling technology based on a concentrated electromagnetic beam, or millimeter waves, aimed at reaching depths between 10 km and 20 km to develop supercritical heat at competitive costs. Quaise’s technology generates millimeter waves at the top of the well that travels down a tube to the bottom of the hole, breaking, melting, and vaporizing rock as it goes down. This could make it possible to do ultra-deep drilling without having to replace broken components, reducing the trips in and out of the well to cut costs.

Harvesting Heat in an Efficient Manner

Improved and specific stimulation techniques to increase permeability in the hot rock need to be developed for large-scale commercial adoption of Enhanced Geothermal Systems (EGS), in formations where natural permeability is not sufficient to allow energy extraction. Reaching higher flow rates and avoiding short-circuiting are both key to a successful EGS deployment.

Eden GeoPower, a Massachusetts-based technology company backed by TechEnergy Ventures, is taking a shot at this challenge. It is developing an electro-hydraulic fracturing technology to efficiently harvest heat from rock formations. The reservoir stimulation company uses hardware and software solutions to identify underperforming fractures in geologic reservoirs and stimulates these fractures to increase fluid permeability, a process that provides stable fluid flows and maximal heat recovery while mitigating the fluid short-circuiting that has long hampered geothermal well productivity.

Heat to Power Conversion

The next challenge is to efficiently convert the extracted heat to power on the ground. We’ve invested in Luminescent, an Israeli start-up developing a quasi-isothermal heat engine to convert heat into electricity at an unprecedented efficiency, significantly higher to that of traditional methods like ORC (Organic Rankine Cycle). This has a significant impact on the feasibility of geothermal projects in the low- and mid-temperature range.

There is potential for further advancements. Breakthroughs in drilling, enthalpy harvesting, and heat-to-power technologies will make it possible to unlock the potential for the next generation of geothermal energy in a more affordable and rapid manner. This evolution has the potential to position geothermal energy as a reliable source of abundant and clean energy for the future.

Access the complete paper authored by Ezequiel Urdampilleta, an investor with Techenergy Ventures here.

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