The U.S. Department of Energy on Monday announced it will provide up to $43 million to support research and development of an experimental geothermal technology that would tap energy from deep below the Earth’s surface.
The money will go to 21 projects, led by private companies, universities, and research institutes across the country focused on so-called enhanced geothermal systems, or EGS. Recipients of the awards will also contribute their own funding, bringing the total potential financing to $78 million.
“I think geothermal energy has a very big role to play in the emerging renewable energy mix,” said Jaideep Raje, an analyst with Lux Research. “This is a definite step in the right direction.”
Baker-Hughes out of Houston, Texas, landed up to $3.1 million to develop an ultrasonic borehole televiewer that can operate at a temperature of 300 degrees Celsius (572˚ F) and at a depth of 10,000 meters (6.2 miles).
Google-backed AltaRock Energy along with Texas A&M University and other project participants will receive up to $6 million to test an experimental process that promises to increase power production at geothermal reservoirs.
The new funding, to be disbursed over four years, is part of the Department of Energy’s ongoing efforts to prove the technical feasibility of EGS by 2015.
The U.S. today generates less than 3,000 megawatts of electricity from conventional geothermal plants. The Department of Energy estimates that number could skyrocket to 100,000 megawatts of electricity within 50 years with the application of EGS.
Conventional geothermal plants tap energy contained in underground reservoirs of steam or hot water. These underground resources are drawn to the surface and used to drive generators to produce electricity. In enhanced systems, deeper wells—greater than 3 miles—are drilled to hot dry beds (hence the nickname “hot rock” geothermal), water is circulated into those wells, and energy is extracted.
Since temperature increases with depth below the Earth’s surface, hot rock systems have the potential to support electricity generation almost anywhere, Emerging Energy Research analyst Tim Stephure said. EGS technology could also be used to increase the capacity of mature, conventional geothermal plants.
But EGS is still experimental and hurdles remain, Mr. Stephure said.
The technology has not yet proven commercially viable. And some questions remain about its high demand for water and its potential to ignite earthquakes by disturbing fault structures.
But the biggest bottleneck for expansion of any geothermal plant, next-gen or conventional, is the large capital investment needed up front, Mr. Raje said. These plants can cost hundreds of millions of dollars, even though the electricity that is eventually generated by them could be cost competitive with coal.
“A private company doesn’t have pockets that deep,” Mr. Raje said. “That level of infrastructure investment can usually only come with government incentives.”
Still, the U.S. is not the only country where hot rock systems are under development. Australia in particular has shown rising interest in the technology, spurred by the passage of a 20 percent renewable portfolio standard in 2007.
In a September research note, Mr. Stephure wrote that there are 282 active geothermal exploration licenses among 33 companies in Australia. By 2012, developers there plan to bring online up to three commercial facilities using EGS.
Germany also has shown interest in the technology. The country has issued over 90 geothermal permits since the end of 2007 and has in the city of Landau one of only three pilot projects in the world using EGS technology, wrote Mr. Stephure. The other two pilot projects are in France (Soultz) and the United States (California).
A list of all the Department of Energy award recipients can be found at http://www.energy.gov/news/6624.htm.