What Sets Geothermal Energy Apart?

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The “American Energy Dominance” policy, implementing strict support for U.S. fossil fuel production while curbing wind and solar initiatives, has created a unique backdrop for the emergence of geothermal energy. Unlike its renewable counterparts, geothermal energy now finds itself in a position to vie for the baseload power market, directly challenging both nuclear and traditional fossil fuel sources.

The Geothermal Energy Advantage

Geothermal energy holds the potential to reshape the energy landscape for several reasons. Unlike the intermittent nature of wind and solar, geothermal power provides a continuous, reliable electricity source, making it a prime candidate for baseload power generation. In a policy climate that favors fossil fuels, geothermal stands out by not only being included in the federal energy support structure but also by promising a stable energy supply.

As part of the American Energy Dominance policy, along with its support for geothermal, biomass and hydropower are also acknowledged. However, the latter two resources are hindered by limitations: biomass faces challenges in site availability and resource management, while hydropower is constrained by geographic and hydrological factors. In contrast, geothermal energy leverages a deeply intrinsic resource—heat from the Earth—which can be accessed in a variety of locations with innovative approaches.

Traditionally, the economic viability of geothermal plants depended on specific favorable geological conditions. Historically, these have been sparsely located across the western U.S. However, recent advancements in technology, including Enhanced Geothermal Systems (EGS) and advanced closed-loop systems (ACLs), are changing this. Utilizing techniques from the oil and gas industry, these innovations allow geothermal systems to tap into energy sources previously thought inaccessible.

The U.S. Geological Survey has identified substantial recoverable geothermal potential, particularly in regions like the Great Basin. They estimate that approximately 135 gigawatts could be harnessed, and projections from the Department of Energy suggest up to 90 gigawatts could be accessible by 2050, extending geothermal’s reach beyond the western U.S. into areas previously considered unsuitable.

US Geothermal Energy Policy In Action

While a new energy policy may be issued, getting actual implementation from Congress and federal agencies proves challenging. Initial drafts of the tax bill faced pushback and saw hydropower excluded from support, prompting a coordinated effort from industry stakeholders to reinforce their standing as a crucial baseload resource.

After a tense legislative battle, geothermal advocates celebrated when the final bill maintained crucial incentives for their industry. Stakeholders navigated several close calls but ultimately saw the industry avoid unfavorable tax implications, aiding the growth of geothermal initiatives. Various federal agencies have also ramped up their support. For example, the Department of the Interior introduced expedited permitting processes for geothermal ventures, enabling faster project rollouts.

This momentum aligns with the findings from the US Geological Survey and other federal assessments. Agencies have confirmed that the Great Basin area alone holds significant geothermal promise, while initiatives from the Department of Defense showcase ongoing governmental interest in developing geothermal energy within military applications.

Next Generation Geothermal Systems: Follow The Money

While we are currently witnessing an innovative shift in geothermal energy, the medium-term outlook remains promising. Analysts from McKinsey have pointed to the impending mass-market breakthrough, emphasizing that recent technological advancements could transform geothermal energy into a significant piece of the U.S. energy puzzle.

McKinsey’s projections suggest next-generation geothermal could yield up to 100 gigawatts of electricity by 2050, with a notable milestone of 40 gigawatts achievable by 2035. In stark comparison, the current state of geothermal power sees less than 3 gigawatts operational, indicating an enormous untapped potential that could soon be accessible through innovative technologies.

According to their analysis, the Department of Energy reports that next-generation systems could access a staggering 5,500 gigawatts of geothermal energy nationwide—a figure that continues to attract significant investment. With approximately $900 million funneled into new geothermal projects, the financial community is recognizing that this sector may soon become a critical solution for meeting rising energy demands.

Faster, Cheaper, Better

Improving drilling technologies are fundamental to this geothermal renaissance, as increased drilling speeds translate to reduced project timelines. This acceleration minimizes costs associated with lengthy drilling intervals and expedites the process for bringing energy resources online. Additionally, firms are optimizing existing geothermal sites, enhancing output without extensive new investments.

A case in point is the Utah-based Zanskar Geothermal & Minerals. After acquiring the Lightning Dock geothermal power plant, the company applied innovative technology to revitalize operations. Reports from Zanskar indicate that they have transformed the Lightning Dock site into “the most productive pumped geothermal well in the U.S.,” with achievements including 35% faster drilling rates and considerable reductions in surface infrastructure costs.

This approach sets a new benchmark for geothermal energy efficiency and illustrates the potential for revitalizing older geothermal projects through innovation. With remarkable improvements in performance standards being reported, Zanskar exemplifies the type of business model that could substantially revolutionize the geothermal landscape in the U.S.

Image: The arrows denote flow paths and the colored planes denote constant temperature isotherms in this visual representation of the Lightning Dock geothermal energy reservoir. This is one of thousands of simulations of the Lightning Dock geothermal reservoir that “honors the geologic and well field data,” as described by Zanskar.