GOING UNDERGROUND FOR CLEAN ENERGY

Cleantech Group points to breakthrough technologies in high-speed drilling, improvements in robotics and sensing technologies to transform geothermal heat & energy production

“Geothermal has the potential to provide up to 17% of global energy needs. Increasing adoption of digital tools will enable better controls and real-time drilling data analysis, while new drilling methods, such as drilling with plasma or jets will increase drilling speed and reduce costs.” -- Selena Law, Sr. Associate, Energy & Power at Cleantech Group

Interview with Selena Law

By Suzanne Forcese

WT: Please introduce yourself to our viewers including your background and areas of expertise at Cleantech Group.

Law: I am a Senior Associate leading Energy & Power research at Cleantech Group based in the UK. I have over ten years of experience working in the energy sector in analytical and journalistic capacities, covering the entire value chain from upstream oil to power and renewables. Prior to Cleantech Group, I worked at S&P Global, Wood Mackenzie and Fitch Research.

I have a degree in Journalism from Falmouth University in Cornwall, UK, and a postgraduate degree in international relations from the University of Bristol.

WT:According to Cleantech Group’s most recent Press Release, “The key advance in drilling — which accounts for up to 75% of project cost and 90% of capital cost — came from Fervo Energyat its project in Utah. In its 400 MW Cape Station campaign, Fervo drilled its fastest well in 21 days, a 70% reduction from a similar project in 2022. The company also nearly halved the cost to $4.8M per well.”

This had been a pivotal year for the geothermal sector. What has the Utah project demonstrated and what have been the influencing factors in this shift?

Law: I think the fact that Fervo has been able to demonstrate a marked increase in drilling speeds and cost reduction in a commercial setting. This follows on from the fact that both UTAH Forge as well as some O&G service companies have been able to demonstrate a significant increase in rates of penetration (RoP). So far, because the drilling costs can account for so much of the overall CAPEX, reducing drilling time will make a difference to overall project costs.

Furthermore, there is more demand for clean electricity from the demand side than ever, especially in the light of increasing demand from data centers.

WT: Why is there a jump in demand for geothermal power?

Law: Many companies, such as Google and Microsoft have decarbonizing targets. Meanwhile, data centers need constant 24/7 power. There are not that many solutions that can provide that now. Solar+batteries will only go so far.

Geothermal power is probably the only clean energy source that can provide that level of clean energy. With the forecast demand increase for power needs for data centers, power demand will only increase. This is compounded by the fact that almost every industry is looking to electrify.

It is also worth highlighting that the demand for geothermal heat has increased a lot in the light of the increased need for energy security. In Europe, especially, a lot of space heating is done with natural gas. Following the Ukraine war, consumers and countries are looking for more sustainable options. This sustained demand for geothermal heat helps early-stage innovators, such as HammerDrum, derisk their drilling solutions.

 WT: You have also stated that "Geothermal power has been limited to regions with high enthalpy". Please explain what enthalpy is and how it affects drilling.

Law: Typically to develop geothermal power you need to have high temperature water reservoirs and fractures through which to move this high-temperature liquid. In the context of geothermal energy, enthalpy refers to the total thermal energy content of a rock or fluid within the Earth. It combines a rock or fluid's temperature and its mass.

In high enthalpy regions, typically close to fractures and fault lines, the geothermal gradient – the rate of increase in temperature as you move deeper into the Earth's interior -- is steeper. It means that in high enthalpy regions you do not need to dig very deep to encounter the temperatures required to produce power.

The ORC technology can typically convert heat into electricity from temperatures of 120°C to 150°C, so this would be the minimum temperature required to produce power. Mind you, the efficiency of producing power from heat at 120 degrees is around 8-18%, this means that the majority of the heat is lost in the process. The higher the temperatures get, the higher the efficiency of converting heat to power.

In high enthalpy region, such as Iceland, you may only have to drill 1-2Km to reach temperatures of 120 degrees, while in low enthalpy regions, such as Germany you would have to drill to 5-6KM to reach the same temperatures (average temperature increase in low enthalpy areas is around 25 degree per kilometer).

WT: What has Cleantech Group and your research uncovered in innovative technologies?

Law: We would like to mention these top innovators and their disruptive technologies in the geothermal space:

Using high-voltage pulses or electric arcs to create intense heat and induce rock fracturing (EarthGrid, SwissGeoPower, GA Drilling); combining DTH and sonic drilling (HydroVolve)

Bringing drilling infrastructure subsurface and using robotics for drilling (HammerDrum); Using directional drilling and multilaterals (Fervo, Eavor)

Using high-pressure jet of steel shot particles, air, hydrogen, propane, or water to fracture the rock (Canopus Drilling Solutions)

Co-locating geothermal heat production with lithium or other minerals production that helps to bring down drilling costs (Cornish Lithium,Vulcan Resources)

Using artificial intelligence, machine learning and digital twinning (SageGeosystems) to create new subsurface models, improve steering, and improve drilling efficiency (Seequent, Zanskar).

In addition, we have concluded that:

• Independent drilling companies carry a lot of risk with a high rate of defaults and fierce competition from traditional O&G companies who are developing proprietary technology specifically geared towards geothermal industry
• While O&G service companies hold a lot of patents in this space, most of the innovation is likely to come from independent developers; as for service companies, geothermal is still a very small market
• The M&A activity has picked up since H22023, with at least five acquisitions publicly announced, including geoscience analysis company Seequent acquiring geothermal software provider Flow State and geothermal developer CeraPhi acquiring Third State
• With the exception of Nabors Industries, direct investment from O&G service companies into geothermal sector has not been significant, but overall investment into geothermal has ramped up with nearly $700M invested since 2023

WT: The International Renewable Energy Agency (IRENA) says geothermal energy has the potential to provide up to 17% of global energy needs. Geothermal plants also enjoy multiple advantages. Besides the potential to operate them at nearly 90% load factor, they have lower operational costs than wind and solar photovoltaic and have minimal storage needs.

How does this assessment align with your research?

Law: More geographies, such as Germany and other low enthalpy regions, will unlock geothermal power by 2030, as innovation from shallower depths helps to derisk geothermal drilling and penetration rates further improve. This should be underpinned by the rise in long-term offtake agreements from data center operators and other users.