In 2013, the California Independent System Operator, the entity responsible for managing electricity for 80 percent of California’s power grid, published a chart that showed how energy flowed during a 24- hour spring day in California. The grid they created showed how energy needs increased throughout the day and into the evening, when people were awake and usage levels reached their peak. And, it showed the imbalance between peak energy demand and renewable energy production. When the results were put into a chart, the line looked an awful lot like a duck—hence the Duck Curve was born.

The Duck Curve showed—for the first time—that energy produced from solar power could help offset some of the conventional energy provided by utility companies. The result: cleaner, more sustainable energy that cost a lot less. But there was a catch. Solar could only fill a portion of this gap when the sun was shining, and it couldn’t help during peak evening hours. So, the Duck Curve problem was created.

This means if we can solve the Duck Curve problem through new sources of clean energy, we can have lower electric bills and reduce the negative environmental impact from fossil fuels. Utilizing new, sustainable energy sources means a future with less energy rationing and lower risk of the type of electrical grid breakdowns we’ve seen in California and Texas.

Solar energy isn’t the answer to the Duck Curve problem. Why? Because solar energy is only available during the day when the sun can provide power. This creates a problem. How can we find energy during times when solar energy isn’t available, like during nighttime and on cloudy days?

Without a doubt, geothermal energy is a big part of the solution.

Geothermal energy is energy from the earth. It’s natural, always available, and is our largest untapped natural resource. Geothermal energy comes from deep inside the earth’s core. It’s hot down there, and that energy can be used to power our world. In fact, people in Iceland are already using geothermal energy for 66% of their electricity.

Geothermal energy has many advantages:

• Geothermal energy can be used anywhere in the world.
• Geothermal is always on, regardless of weather conditions or time of day.
• Geothermal can be used for cooling, heating, and electricity.
• Geothermal power can ramp up or down to fill the gaps left by traditional electricity and solar power
• Most geothermal plants will produce nearly zero air emissions

Geothermal can help prevent electrical grid failures

Solar energy may have a duck curve problem, but it has its advantages, too. As does every renewable energy source. Solar energy is a renewable resource with low emissions and a low carbon footprint that can be generated in a wide variety of geographic locations. But no one resource can meet all of our energy needs.

Together we can solve the Duck Curve problem once and for all and build a sustainable energy future. Let’s harness the power and energy within the earth’s core to power our cities and factories. Let’s use the earth to save the earth.

The term ‘hybrid’ can mean a lot of different things in the energy industry. For the purpose of this piece, however, we are specifically looking at systems that combine geothermal energy with another renewable technology. Three primary possibilities are:

• Geothermal and Solar
• Geothermal and Wind
• Green Hydrogen Production

Geothermal co-production with solar PV is a natural pairing and several geothermal operators have switched over to this model. Examples include Cyrq Energy's Patua project, Ormat's Tungsten Mountain project, and ENEL's  Stillwater project.

Geothermal plants are more efficient during cooler atmospheric temperatures, whereas solar PV is most efficient during hot, sunny, weather. Combining the two helps mitigate the potential output decline caused by changing weather patterns . This is especially valuable in areas where water cooling is not an option, helping maintain power generation when pricing is at its peak.

Similarly, Concentrated Solar Power (CSP) allows boosting of a hybrid plant by increasing the conversion efficiency of the of the geothermal steam turbines.

As noted by Ann Robertson-Tait and Douglas Hollett in their paper last year, there are currently no geothermal plants combined with wind power, but this hybridization would be valuable to explore.

Many deep sedimentary basins in the wind belt of central US that are used for oil & gas production also contain fluids that are attractive for geothermal production. By partnering the intermittent wind generation with baseload geothermal may improve overall performance of both energy sources.

Geothermal power production offers a great benefit to the efficiency of green hydrogen electrolysis by supplying a clean firm 24/7 power source. Geothermal also has significantly smaller land footprint than other renewable sources, and could potentially allow for stacking of government subsidies.

Hydrogen production could be kicked in when external power demand from the geothermal plant is lower than generation potential, or where geothermal resources lack access to markets because of remoteness, lack of transmission, or both, such as mountainous areas or islands.

The Halcyon Green Hydrogen plant was commissioned in late 2021 in New Zealand, supplied by geothermal energy. It is expected to start supplying green hydrogen into wholesale markets early this year.

If you are interested in reading more about the potential of geothermal hybrids, here are several good places to start:

• “Better Together: New Synergies and Opportunities From Hybrid Geothermal Projects” by Ann Robertson-Tait and Douglas Hollett (link: https://www.geothermal-library.org/index.php?mode=pubs&action=view&record=1034445)
• “Hybridizing Solar Heat with a Geothermal Binary Power Plant Using a Solar Steam Topping Turbine” by Joshua McTigue et al. (link: https://www.geothermal-library.org/index.php?mode=pubs&action=view&record=1034054)
• “Developments in Renewable Hydrogen Electrolysis by Supercritical Geothermal Cogeneration” by Jim Shnell and Michael C. Tucker (link: https://www.geothermal-library.org/index.php?mode=pubs&action=view&record=1034288)
• “Green Hydrogen: Geothermal’s Route to Pseudo-Commoditization” by Taylor Mattie (link: https://www.geothermal.org/index.php/our-impact/blog/green-hydrogen-geothermal-synergistic-pairing)
• “The Halcyon Power Green Hydrogen Plant is Powered by Geothermal Energy from the nearby Mokai Geothermal Power Plant” by Carlo Cariaga, ThinkGeoEnergy (link: https://www.thinkgeoenergy.com/first-green-hydrogen-plant-in-new-zealand-starts-operations/) 

While it is certainly true that technology is advancing rapidly that targets one, or both, of these barriers by enabling deeper drilling, lower temperature resource utilization, closed loops and enhanced geothermal systems, there is one critical and unchangeable fact: geothermal energy is not a commodity.

One cannot ship a barrel of hot water around the world for consumption, as we do with fossil fuels. Of course, geothermal power can be generated and transmitted over long distances, or in some rare cases, such as Iceland, the hot water piped directly over long distances for heating. But in both cases, there are losses that still restrict the economic utilization of a geothermal resource to being a regional source of renewable energy.

In recent times, governments and industries alike have recognized the incredible potential that hydrogen can play in global decarbonization, especially in the context of transportation fuel. In this vision, green hydrogen is the apex, as it is defined as hydrogen produced using renewable energy through electrolysis. Most think that solar, wind, and hydro are the renewable power source behind green hydrogen. However, the real golden ticket is baseload geothermal power.

The advantage of geothermal power generation is that it runs full time and is not impacted by whether or not the sun is shining or wind is blowing; it provides consistent, baseload power output capability that makes it a perfect energy provider for green hydrogen facilities that operate in the same manner.

Geothermal and green hydrogen designated as a system is a symbiotic relationship with incredible advantages that only come when they are paired together; baseload power supply maintains hydrogen production 24 hours a day, surface footprint is minimized, and government subsidies can be stacked to enable development. Since green hydrogen can be transported or stored for later use, it is the method that enables the pseudo-commoditization of geothermal energy.

There are many remote locations around the world, and especially in the Pacific Rim “Ring of Fire,” where vast geothermal resources exist but with small local populations, and therefore limited need to utilize these resources to its full potential or have a means to fund the development. However, coupling this with green hydrogen, there is now a new model emerging that greatly increases the attractiveness of geothermal in remote areas.

This is not going unnoticed by the industry as well: the recent Halcyon Project in New Zealand has just been finished, which is a green hydrogen plant powered by local geothermal power. Other projects like Meager Creek Development Corporation in British Columbia are in planning, but there are also some extremely visionary organizations like Fortescue Future Industries who are laser-focused on bringing green hydrogen to the world and relying on massive amounts of geothermal energy to enable it.

Now that the possibilities of enabling a pseudo-commoditization of geothermal with green hydrogen are taking shape, how is the other primary challenge of development cost covered with this partnership? While there is government policy being implemented in many countries financing and supporting the development of green hydrogen, I’ll focus just on the USA as an example. The new Infrastructure and Jobs Act (IIJA) created an Office of Clean Energy Demonstrations, with a budget of about $21.5 billion dollars, designated to meet a set of 10 goals. While geothermal energy is not mentioned specifically, it can easily be interpreted that several areas of the funding could go to geothermal developments to help meet the greater goals.

Of that $21.5 billion budget, the largest portion, $8 billion, is designed for “Regional clean hydrogen hubs,” which is inclusive of the producers, consumers and infrastructure needed to build out the network. The Office has the goal of developing at least four hubs in different regions of the U.S., with at least one being a green hydrogen facility. (The others are blue hydrogen, fueled by splitting natural gas into hydrogen and CO2.)

Of course, there are massive power requirements for green hydrogen generation facilities and networks of this size, and it is interpreted that this funding would be inclusive of the power source required. The actual footprint of how a network would look is beyond my area of expertise, but it seems reasonable to think that there would be a mix of centralized/direct power sources; Centralized geothermal power plants for hydrogen generation and compression facilities, and then decentralized facilities (such as H2 fueling stations) that would purchase the renewable energy from the grid, or simply be powered by hydrogen-fueled generators on-site.

Many questions still exist. For example, if a geothermal power plant is built 50 miles from a green hydrogen generation facility, is it considered a part of the hydrogen hub and therefore qualify for funding? However, it is expected the criteria and structure is something that will become clearer as we move though 2022. It seems highly plausible that portions of this $8 billion will become available to geothermal developers and lease holders such as Fervo Energy, Cyrq and Ormat. They have a huge potential to benefit from this, as does the industry as a whole.

Geothermal has always had to struggle to gain visibility for the funding needed to expand development. But with an incredible amount of funding going into green hydrogen, “piggybacking” into this area opens doors for a high volume of geothermal development in more geographically diverse regions.

The green hydrogen industry and geothermal industry have an enormous degree of synergy to offer each other and are better together. A goal of unification, both in terms of joint project development and global policy creation, should be established by leaders of both industries to take full advantage of the opportunities at hand and better foster the energy transition.

The thoughts and opinions in this essay are mine and not those of my employer.

Forget what you may have heard about geothermal. Remove the vision of beautiful people in steamy swimming pools and spas, or scenic landscapes of volcanoes and geysers. The Earth energy we need to unlock is everywhere beneath you. This ubiquitous and constant energy is below your home, your workplace, and below you right now as you read this article. Our human senses in our regular daily lives simply don’t see that energy, and we don’t feel it. That energy is always there, flowing up from deep below the rocky crust we inhabit, from our Earth’s very core. It’s been that way for four and a half billion years and will continue for as long as the Earth exists, no matter what our human capabilities do to it.

The beauty in this energy elephant is that it can be unlocked in a multitude of different ways. It’s energy that can power our needs through electricity generation or by using it directly for both heating and cooling. It can bring equity and be equitable. It can be used for our transport and our homes, or grow our food and provide for our essential needs to survive. Earth energy is truly an elephant among its peers! And then there’s the cage. The technologies have been decades in development as it takes ingenuity, effort, and patience to tame. This elephant has also been locked away from us because the energy market conditions have not led to the support and investment that it deserves. Now is the time to unlock it.

Whether you know it or not, whether you like it or not, we need a renewable and clean energy future. Our society must become carbon neutral as soon as possible. Climate change is an international emergency that is already affecting human civilization and it isn’t going to be good. We need to minimize those climate affects as much as possible, which means kicking the habit from fossil fuels. It means changing the way we live our lives from our petrol fueled cars through to piping natural gas into our homes and industries. It means bringing greater electrification and heat management. Sorry to bring you this bad news, but your propane barbecue will eventually become obsolete!

Our renewable and clean energy future needs electricity generation from solar and wind sources. It needs us to use hydroelectricity and tidal energy. It needs us to change our habits to a more efficient way to use our energy and it needs us to learn how to store energy when we have it available and don’t immediately use it. But it also needs something big, very big! We need an energy source that is always on, no matter the time of day, or day of the year, or what the weather is doing. There needs to be a constant flow of clean and renewable energy that we can use instead of the traditional and polluting baseload power sources like coal, gas, or nuclear.

The reason we need to unlock this elephant is because of what I will refer to as the California Renewables Syndrome. The California Renewables Syndrome is not some form of entertaining spy thriller! It is the inability to transition California to a future of high intermittent renewables without an adaptable always-on energy source that can meet our basic energy needs at any time and any place. Without that ubiquitous source, our clean energy vision is stranded and our quest for decarbonization is beyond reach. California is leading the way in building out intermittent renewable energy and should be applauded, but it’s now reached a tipping point of diminishing returns. It can’t simply transition its power system; instead, it needs to be transformational in its entire energy use. As with many things we now use in our lives, from Google to smoked salmon pizza, the world needs to look to California for taking the lead.

The California Renewables Syndrome is caused because wind and solar can’t provide electricity all the time and aren’t effective everywhere. These energy sources are not secure, reliable, or resilient. The California State government has discovered they need to install nearly five times the solar and wind capacity to replace each unit of traditional baseload capacity, just to have enough energy in the system when the intermittent sources are switched on in regular conditions, and that’s in a State that’s conducive to these sources. On a good day, they’ve discovered that when intermittent sources are running well there is too much energy, and on a bad day, when they become unavailable due to some adverse conditions, then there is way too little energy. In between the daily times of feast and famine, daytime and nighttime, there is a need for huge acceleration of electricity onto the power grid from something else. Energy storage can help to smooth out short term supplies, but as wind and solar projects continue to be built out then that amount of energy demand in just a few hours becomes increasingly challenging.

To make things even worse for our clean energy vision, California is feeling this syndrome without a solution to longer-term seasonal demands that will occur with electrification as we reduce reliance on fossil fuels. These seasonal demands will work against the efficiency of solar, when electricity needs increase during cooler temperatures and longer winter nights. And California doesn’t experience the collective heating and cooling challenges that are far more serious in other regions of the planet. Globally, these needs alone contribute over half of all emitted greenhouse gases. The California Renewables Syndrome means that without a big renewable and clean energy source filling the hole then a continuing reliance on polluting baseload is needed or else the lights, and the electric vehicle chargers, will switch off.

And so the elephant in its cage enters the room! People in California are also very lucky because the elephant there can be unlocked with reasonable ease. It happens that the State is the international heart of the geothermal power industry with readily available resources that can be developed with today’s technologies. The California State government has finally handed over the keys to the cage by demanding the power industry procure more geothermal energy to come to its aid. New technologies, entrepreneurs, and startups are now entering the market, and are following research programs funded by the State and Federal governments. And with greater innovation and increasing efficiency then that ability to unlock earth energy at large scales will broaden out to all regions of the globe.

As our delegates at COP26 convene in the halls of the Scottish Event Campus over the coming days they will debate the greatest challenge to our civilization that we’ve ever faced. How many of them know they are walking and sitting on the solution to their problems? Like the sun shining in the sky, the Earth in its own way is shining beneath them. Many of them probably don’t even realize the issues faced in California and instead call for an ever-increasing use of intermittent renewables that can only partly satisfy our long-term needs for clean power and heat, will not get society to carbon neutral, and will not give us the decarbonized lives we need. So, unlock the elephant in the room, point to your feet, and shout it out, “Earth energy will save our Earth”.

The National Renewable Energy Laboratory (NREL) has just published the much-anticipated 2021 U.S. Geothermal Power Production and District Heating Market Report. This report provides interested stakeholders with up-to-date information and data reflecting the 2019 geothermal power production and district heating markets.

The report captures domestic capacity and usage for geothermal power production and district heating and cooling, while also discussing the impact of state and federal policy and future opportunities for the domestic geothermal market and industry.

Some of the highlights of the report include:

• United States geothermal power capacity increased from 3.627 gigawatts (GW) to 3.673 GW from the end of 2015 through the end of 2019.
• The United States brought seven new geothermal power plants online during this same timeframe, adding 186 megawatts (MW) of nameplate capacity, while 11 plants were retired or classified as nonoperational, subtracting 103 MW of nameplate capacity.
• Nine new geothermal Power Purchase Agreements have been signed across four states since late 2019, including plans for the first two geothermal power plants to be built in California in a decade.
• Geothermal companies operating in the United States have a combined 58 active developing projects and prospects across nine states.  Five of these projects are in Phase 4, the phase immediately preceding project completion.
• There are currently 23 geothermal district heating (GDH) systems in the United States. The oldest installation dates from 1892 (Boise, Idaho), and the most recent installation was completed in 2017 (Alturas, California)
• U.S. GDH systems tend to be significantly smaller in size (average of 4 MWth) than European GDH systems (continent-wide average of ~17 MWth), and orders of magnitude smaller than the average GDH system in China (~1,000 MWth)

“After working with the NREL and Geothermal Rising team on this informative and must-read report, it's clear that geothermal energy, both power plants and district-heating systems, needs significantly increased demand and resource development at the same time for substantive and sustained industry growth, as envisaged by DOE’s GeoVision report”, commented Geothermal Rising Executive Director, Will Pettitt. “To facilitate that growth the industry needs the following assistance: 1) outreach that enables the acceptance of geothermal energy as a viable clean and renewable energy source that can meet state targets, and that is differentiated from other energy sources by the character of its benefits to society; 2) technology R&D that can lead to more efficient exploration, characterization, and engineering of geothermal resources, and that expands the reach of geothermal energy to any geographic area; and, 3) incentive programs that actively de-risk resource development projects, along the lines of the successes achieved in the US in the 1980s and/or seen elsewhere around the world today, that help standardize budgeting and scheduling metrics so as to promote up-front project investment and advance exploration.”

NREL's press release announcing the publication of the report can be found here: https://www.nrel.gov/news/press/2021/new-nrel-report-details-current-state-vast-future-potential-us-geothermal-power-heat.html

Over the years, I’ve often heard from geothermal industry players that they would welcome oil and gas engagement in the space; that oil and gas skills and technologies are essential to push geothermal forward, faster; that oil and gas involvement could be a “gamechanger” for the industry. To be clear: I wholeheartedly agree. I’ve made it the focus of my career to help make that happen. However, I have also always had a nagging question in the back of my mind: does the geothermal industry have its eyes wide open about what real and sustained oil and gas engagement in geothermal — geothermal energy at oil and gas scale — would look like? Are we headed for happy marriages or irreconcilable discord between hydrocarbon and geothermal players when this “pivot” into geothermal does occur in the oil and gas industry? And what can the geothermal industry do to help steer the ship in prickly areas like social license in the coming years as oil and gas companies engage? I think we should start a dialog about this quickly before it becomes hindsight. My hope for this piece is to start those conversations.

First, let me reveal my bias. I am, at my core, a climate activist — a tree-hugging environmentalist. I have joked  with my oil and gas friends that if I could have strapped myself to an elk to prevent drilling incursions into the Arctic, I would have. My career can be fairly described as a series of attempts to claw my way onto the deck of the hydrocarbon ship and grab hold of the wheel. My latest quest on this journey is recruitment of the hydrocarbon sailors to the cause of geothermal energy. I want oil and gas to flip the switch and pivot from hydrocarbons to heat, a relatively quick and painless way to solve energy and climate change in one shot. I view the oil and gas industry as the most capable and resourced asset we have on the planet to solve climate change, and with geothermal, they can accomplish that end by leveraging what they already know and do.

Everything I do is colored with the hope that this “pivot” will happen within the next decade. I understand that this proposition has complex implications for the geothermal industry itself. So, back to our topic of discussion.

A primary reason the oil and gas industry has gotten excited about geothermal is that they are increasingly viewing geothermal as globally scalable. This concept is a relatively recent development within operators, occurring over approximately the past year at an accelerating pace, driven by an almost industry-wide realization that the enabling technology developments of the frack boom and offshore HPHT plays could directly apply to make geothermal scalable and profitable.

Yes, oil and gas companies have thought about geothermal before, many a decade or more ago, and declined to engage, labeling the entire prospect as “niche.” Some have ventured — “forayed” as they often say — into geothermal projects, only to divest and wash their hands years later, many as the shale boom took off and the grass started to look greener (somewhat ironically) back in hydrocarbons. There are plenty of folks in my inbox who question the longevity of oil and gas engagement in geothermal, particularly given that this interest now (and only recently) coincides with a drastic downturn.

But this time is different. A convergence of factors makes it different. The enabling technologies and bursts of innovation of the past two decades in the oil and gas industry are one piece. Carbon neutrality commitments with clocks ticking and no clear path to execution is another, combined with increasing global climate activism and associated divestment movements. The sudden demand destruction and oil price crash related to COVID-19 has had the unexpected — and of benefit to geothermal — effect of freeing up a lot of the brainpower needed to consider geothermal problems within oil and gas entities. Major IOC “X” is going to try to avoid laying off their star geophysicists and petroleum engineers in a downturn — so many have repurposed key talent toward the geothermal problem set with exciting and fast-moving results.

Oil and gas industry engagement in geothermal isn’t a quaint proposition. In my view, if it happens, it’s not going to be about applying oil and gas technologies; instead, it will keep things business as usual in the geothermal industry.

Some oil and gas companies have begun to consider what it might look like if they were to drill for geothermal energy at the scale they currently drill for oil and gas. To illustrate, instead of drilling an average of 15 geothermal wells per year in the United States, which is the current paradigm, we would be drilling 20,000. Achieving this level of scale would take time, yes — but once oil and gas gets going on well manufacturing — drill the limit — this could mean break- neck speed compared to the current pace of geothermal development.

Where you sit in the geothermal ecosystem likely defines your level of acceptance or suspicion about this concept of “geothermal anywhere” enabled by the oil and gas industry.

If you are a geothermal startup looking to demonstrate or scale new concepts, oil and gas engagement, strategic partnership, and investment likely looks like a resounding win. Plus, you have an exit and relatively near-term payday. In my current role, I have a good deal of visibility into the startup arena and oil and gas engagement, and the past six months have been exciting and exponentially fast.

Geothermal startups at large are not only engaging with operators at an increasing pace, but they are also showing up on acquisition target lists of these companies as they build their internal geothermal strategies.

But let’s consider for a moment a scenario where, within five years, almost every geothermal startup in our global ecosystem has either been wholly acquired or entered into a strategic partnership with an oil and gas company. Would this be considered a win by the geothermal industry at large? I have concluded personally the answer is yes — as long as the oil and gas companies deploy their newly acquired capabilities to quickly and actively develop geothermal projects — but I also acknowledge that the implications are complex. For example, one major obstacle to cost-effective geothermal development that I’ve heard from consistently geothermal industry players is that they have not had access to the latest drilling technologies and techniques for their projects, largely due to undercapitalization and a resulting lack of engagement by large and highly skilled oil service providers. Given this already constrained tech-transfer situation, what if those same oil service providers came to be majority shareholders in a critical mass of innovative geothermal companies?

If you are engaged on the regulatory side of geothermal project development, an area that is frustrating, unfairly slow, and tedious in parts of the world, the oil and gas lobby throwing in on geothermal might sound like an excellent proposition.

The same goes for folks who are advocates of increased public funding and subsidies for geothermal. Powerful lobbies are more than welcome, right? But powerful lobbies come with heavy baggage, and the oil and gas industry lobby may be, at least to environmentally conscious folks, the least palatable entity of them all in terms of coming together to push for common cause.

Where this trade off will land is an intriguing area of inquiry. Where the really interesting questions arise, in my view, is where we may have true divisions of loyalty, deeply held hard feelings and cultural disagreements between geothermal industry entities and oil and gas suitors. I’m thinking of the publicly traded companies with significant numbers of environmentally minded shareholders and employees, the industry and industry-associated organizations who may not be keen on mixing their hard- earned reputations with the historical baggage that comes with the oil and gas industry, the employees of geothermal industry entities who may have joined the ranks of geothermal in opposition to oil and gas only to find that they may become oil and gas employees in a wave of acquisitions.

Let’s consider the example of a well-established geothermal industry entity. If you are a legacy industry player with significant intellectual property, valuable holdings, an easily replicable business model, and significant institutional knowledge, you may very well also end up on an acquisition target list in the coming years, should oil and gas decide geothermal is their courtship interest. Even if you are public. Again, the differences in scale between the two industries rise to the fore. The world’s largest publicly traded geothermal company has a market cap of about US$3 billion. Oil and gas operators have a combined market cap exceeding US$1 trillion, with several of the largest clocking well in excess of US$100 billion each, even now, in the midst of a severe downturn. For upper-level management of such companies in the geothermal industry, I think it is worth consideration of how such an approach might be received and what strategies could be put in place to make such a transition/acquisition palatable.

Another interesting twist in human dynamics is the seemingly significant and widespread tension (or, at least, the perception of tension) between geothermal and oil and gas folks. The tension is oft described as “arrogance” or “condescension” in reference to the other — interestingly reported similarly by both sides of the aisle. Given this underlying dynamic, would the geothermal industry find the role of “white knight” by oil and gas companies palatable? This question becomes even more interesting if you back out further and consider the question of NGOs and environmental activists, and their willingness to accept the oil and gas industry as “climate saviors” — propelled to this title by a green drilling boom and geothermal’s social license. Exploring how these dynamics may play out in the coming years within the geothermal industry and making a plan within entities to manage them seems to be a worthwhile exercise. It is certainly an area that I spend a good deal of time pondering.

We are headed for a period of fast change in geothermal over the next decade. For some, it will be experienced as a revolution. For others, perhaps it will be perceived as disruption. But how we plan for and navigate this coming decade will determine not only how fast we go in this transition, but how well stakeholders collaborate with one another and how well we become a team. We will need to create an entirely new culture as we merge two industries, defining boundaries, principles, and commonalities as we go on a shared quest for climate change mitigation, access to ubiquitous clean energy, and profit making. A common enemy unites rivals under a common identity, or so the saying goes. How we manage the details and nuance of uniting two industries in a common cause, I believe, will define our success. Let’s set ourselves up to succeed, one conversation at a time.

The use of geothermal energy is on the rise in the United States. Major universities are in the process of developing and building their own geothermal energy plants while legislation is being drafted to help the industry, including tax breaks and allowances for ease of development. All of this is setting the stage to make the geothermal energy industry a powerful source of employment, especially for those in the oil and gas industry who have lost their jobs during the COVID-19 pandemic.

The oil and gas industry has experienced a downturn amid COVID-19 that is set to rival the oil price crash of 2010– 2015, when the industry recorded a loss of 60,000 of its 200,800 jobs. Meanwhile, California has lost nearly 20% of the state’s total clean energy workforce, which is more than 100,000 jobs. The state lost more than three times as many jobs as any other state in the United States. Geothermal can potentially replace all these jobs lost within the next 10 years, but decisive policy support is required to make it happen.

Geothermal energy is seeing increasing interest in regions across the United States for everyone from homeowners, state and local governments, and academic institutions. Cornell University in Ithaca, New York, and West Virginia University (WVU) in Morgantown, West Virginia, are both keen on setting up Deep Direct-Use (DDU) for their campuses.

Cornell University has conducted a two-year feasibility study to completely heat and cool its campus with renewable energy. Several years ago, the university implemented renewable direct-use cooling throughout its campus; now it’s exploring the use of geothermal energy for direct-use to provide 50 MW(th) of base-load heating for the campus. Bioenergy generated from Cornell’s farms and food waste is being evaluated for providing peak heating needed for the approximately 20 extremely cold days that occur yearly.

According to the study Earth Source Heat: Feasibility of Deep Direct-Use of Geothermal Energy on the Cornell Campus, the university has “already created the sustainable, emissions-free lake source cooling system … we now explore Deep Direct-Use (DDU) as part of a hybrid system: an engineered geothermal system (EGS) for base-load district heating, and biomass combustion for peak demand.”

WVU is also hoping that the use of a DDU will help with heating costs in the long run. As stated in the report Feasibility of Deep Direct Use Geothermal on the WVU Campus-Morgantown, WV, WVU was chosen because of the “optimal and unique combinations of critical factors necessary to develop deep direct use geothermal.”

The planned system to be implemented is unique because it will allow geothermal heat to be used as both a heating and an energy source for absorption cooling, allowing amortization of systems costs within a full 12-month year.

With these feasibility studies completed, it is now possible to put the previous employees of the now idle rigs in the Northeast and Midwest to work — with the oil and gas industry in a lull, geothermal can replace these lost jobs permanently, while building clean energy infrastructure that will benefit the United States for decades to come.

Geothermal Rising is supporting a wide array of legislation to help with the growth of geothermal. Action needs to be taken now due to the severity of the COVID-19 pandemic.

The Moving Forward Act would allow geothermal technologies to access an investment tax credit at a 30% level through January 1, 2028, and all energy credits can elect for direct pay. It would also allow expedited permits for geothermal projects on federal lands, give the Department of the Interior some flexibility on rental rates, and set a goal of no less than 25 GW of wind, solar, and geothermal on federal lands by 2025. It also aims to promote co-production of geothermal energy on oil and gas leases, and allows for non-competitive leases on adjoining lands for geothermal.

The Advancing Geothermal Innovation Leadership Act of 2019 looks to advance geothermal energy resources from direct use to power production. The act is meant to grow geothermal technologies with new research and demonstrate new geothermal capabilities.

The Advanced Geothermal Research and Development Act of 2019 would increase geothermal energy development while lowering the cost of development. The bill would also continue the operation of the Utah-based Frontier Observatory for Research in Geothermal Energy (FORGE) site, as well as create a co-production of geothermal energy and critical minerals initiative.

Another bill, Enhancing Geothermal Production on Federal Lands Act, amends the Geothermal Steam Act of 1970 to facilitate the exploration for geothermal resources on federal lands. It would remove barriers for geothermal activities on federal lands by streamlining the discovery and permitting process.

Geothermal Rising is also supporting two pieces of tax legislation: the Growing Renewable Energy and Efficiency Now (GREEN) Act and the Energy Sector Innovation Credit (H.R.5523).

The renewable resource landscape of California is continuously changing due to several factors, notably the state's success in facilitating expansion in renewable energy, which is mostly solar. The state has continued to advance its clean energy policies with the current objective of decarbonization by 2045, an objective guided in part through the California Public Utilities Commission's (CPUC) Integrated Resource Planning (IRP) process and similar planning processes within the large, publicly-owned utilities. Due to these factors, while geothermal is not the lowest cost resource on a levelized cost basis, it is by far the highest economic value in renewable resources that are operating in California and the surrounding region.(1) Even as we see the contract prices for wind, solar PV, and lithium- ion battery prices decline, geothermal's economic value over the life of long-term purchase agreements remains competitive as California and the region move to higher penetrations of renewable energy.

Ormat tracked how solar PV and geothermal energy market values changed over several years. Stand-alone solar energy on the California grid has grown from just under 500 MW in 2010 to over 25 GW of capacity today. This influx has been leading to progressively lower energy market prices during solar production hours and price spikes during the solar ramp periods. Resources, such as geothermal, that can operate outside the solar production hours have maintained a higher market value compared to solar.

These trends are illustrated in Figure 1 (below) and examine the annual value of a geothermal production profile compared to a sample solar PV production profile taken from a CPUC model from 2012 – 2020 Q1 (January – April).1 At the start of this process, solar energy was worth more than geothermal because it shaved peak energy prices.

However, in the last two to three years, geothermal profiles have been worth around $10/MWh more than a solar profile on average, and commercial forecasts of future energy prices suggest this gap will continue to grow, getting closer to $20/MWh.1 Geothermal's increasing value has persisted into 2020 despite COVID-19 impacts to demand, which decreased solar's value more than geothermal. While the new bulk storage now coming online in California will allow for some energy to be shifted to flatten the “duck curve,” the growing solar energy surpluses will far exceed storage capacity. Hence, forecast models suggest that there will not be much change in this basic pattern for some time.(2)

Another critical factor in the changing value of renewable resources has been the declining RA capacity value of new solar generation. This was predicted in research studies,3 confirmed by the CPUC a few years ago in its RA proceeding, and now its IRP modeling. In California, solar generation has already shaved the annual peak loads and new stand-alone solar no longer provides that benefit. As such, the capacity value of new solar has been adjusted to virtually zero for RA and planning purposes.

Over the past couple of years, this decline in solar capacity value, along with the retirement of older natural gas plants, was reflected in California's bilateral RA capacity prices. These doubled in 2019, reflecting shortages in capacity. This shortage of capacity is why newly-planned solar projects have integrated batteries that enable energy shifting to capture some capacity value. Hybrid resources have not yet proven themselves and are still energy-limited where the storage is charged from the solar field and not the grid.

In contrast, geothermal brings a 90-95% capacity value and a history of reliable operations regardless of the weather. The consistent performance of geothermal as a capacity resource, at all times, is now capturing the attention of buyers across the region.

As the CPUC and California load-serving entities turn to IRPs and other types of long- term analysis to guide procurement and planning decisions, geothermal's multiple values need to be closely examined. California's IRP tools have always selected geothermal at some point in the planning horizon across a range of cost points, even when the model also selects a large amount of solar and storage. The reason geothermal is selected in IRP models is the fact that higher decarbonization targets require the displacement of more and more natural gas-fired and nuclear capacity.

Replacing high-capacity fossil generation in an IRP with renewables results in 1 MW of geothermal displacing 4-5 MW of solar and storage capacity. What we found is that the IRP models build multiple solar plants with storage to displace one geothermal profile. Hence, a simple 1:1 LCOE comparison between these technologies is inadequate. This result is only now starting to be understood by planners; as we look out over the next 20 years, each MW of geothermal procured will require much less solar with storage.

The trends described in this article have been consistent for several years. They suggest that geothermal developers should have confidence that, if more of the resource can be delivered within a reasonable cost range, it will find buyers. A single geothermal project is not competing against the price of a single PV project with storage, but rather the cost of 4 PV projects with storage. It is vital that geothermal developers are helping to tell this story. In addition to stimulating increased geothermal demand across the western United States, these findings should lead to an improved analytical and policy framework for the benefits of geothermal on a global scale.

1. Thomsen P. The Increasing Comparative Value of Geothermal in California– Recent Trends and Forecasts as of Mid-2019. Presentation at: Proceedings World Geothermal Congress; April 26 - May 2, 2020;Reykjavik, Iceland.
2. All prices used for these calculations are downloaded from the CAISO OASIS website. A table comparing geothermal energy value to three different sample solar profiles used for CPUC modeling can be found in Thomsen (2020, 2018a). This profile is one of the ones in the table, updated to 2020.
3. Thomsen P. The Increasing Comparative Value of Geothermal in California–2018 Edition. CD recording: GRC Transactions 2018a;42.