As part of wider clean energy efforts, geothermal has important role to play for the U.S.
With plans of the incoming Biden administration to rejoin the Paris Climate Agreement, geothermal should be an elementary part of renewed emphasis on renewable energy in the U.S. It also provides an opportunity to tie in existing oil and gas know-how and workforce.
With a clear increased interest in geothermal energy in the U.S., there is a big question mark on if or how the new administration in the U.S. will support geothermal development in the country.
There was a strong fear in a decrease in funding for geothermal research efforts by the U.S. Department of Energy, e.g. among others for the FORGE project that is a wide-reaching and important EGS research project. Despite efforts to cut funding, overall funding for geothermal has actually increased in the last couple years, so that is positive. This is due to bipartisan support for geothermal.
Now an editorial in Forbes magazine is looking into the question if “… Geothermal Energy Have A Future Under The Biden Administration?” written by Ariel Cohen, a Senior Fellow at the Atlantic Council and the Founding Principal of International Market Analysis, a Washington, D.C.-based global risk advisory boutique. Clearly the sector appreciates the attention and it will be interesting to see if in deed the sector can count on support by the new administration.
The author highlights the notion that geothermal might only be economically be derived in tectonic hot zones, so mostly in the Western U.S.. But clearly, geothermal energy can be found throughout the U.S., maybe not for power generation, but for heating and cooling. Therefore the look will have to be beyond electricity.
EGS, engineered or enhanced geothermal systems is described as the new opportunity that could help extend geothermal energy utilisation. With funding under the DOE, the Utah FORGE project is pushing forward on research that could potentially revolutionise how we are able to tap geothermal energy for power generation, and beyond.
With the oil sector deeply effected by the drop in oil prices, and a workforce looking for a lifeline, there is an increased attention towards how the geothermal sector can tap the existing know-how and experience of the oil sector, and vice versa, the oil sector find opportunities in the geothermal sector. Scale is in this context a big element. But – as increasingly pointed out – the geothermal opportunity could give the oil sector a new purpose in a world that is going all in for renewable energy.
There are great opportunities in the utilisation in oil and gas extraction technologies and the know-how in drilling by the oil sector for geothermal development.
In this context a new emphasis is also given to advanced geothermal systems, that are going beyond the traditional thought on hydrothermal systems or those created artificially through applying an EGS approach. Closed-loop systems and similar are taking away a lot of the development risk and could expand geothermal energy utilisation way beyond the traditional regions of development. How quickly this technological approach can become competitive with traditional energy resources will have to be seen, yet provide great opportunities not only for the energy market but also for a sector redefining its role and looking for ways to put its highly experienced workforce back to work.
With the right incentives provided through the new administration, be it on production/ investment tax credits, removing roadblocks towards more streamlined permitting processes etc could be elements on how the new administration can push forward. To this day, the geothermal sector has not received the same or similar support as other sectors, last but not least the oil and gas sector. Creating a level playing field and emphasis on renewables in the context of what they offer will be crucial.
There clearly is renewed optimism that things are going to improve for geothermal, last but not least with the new emphasis on the complete energy sector, including heating and cooling. The success will also depend on how the oil and gas sector can be won over to fully engage and invest in geothermal. This is where the new administration can also put an emphasis to incentivise a pivot of the oil and gas sector into geothermal. Other countries have done this with a technology bonus for cross-over technologies.
So do we believe that there is a future for geothermal under the new administration? The answer is a clear yes, but how much emphasis and support we can count on will have to be seen. To reach target goals set by the Paris Climate Accord that the U.S. is to rejoin, one needs to look at all renewable energy options, and geothermal is a crucial piece of the puzzle.