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The following is an excerpt from GreenBiz Group’s 16th annual State of Green Business, which explores sustainable business trends to watch in 2023. Download the report here.

If we could capture just 0.1 percent of the heat content of the earth, we could supply humanity’s total energy needs for 2 million years, according to the U.S. Department of Energy. 

Yet geothermal currently accounts for just 0.4 percent of total U.S. utility-scale electricity generation, nearly half of which came online in the 1980s. Investments dried up with the rise of solar and wind, which required less upfront capital and became increasingly economically attractive.

That trend is set to change. Corporations and localities worldwide are looking to decarbonize electricity, matching energy demand with clean energy supply— a concept often referred to as 24/7 carbon-free energy. This, coupled with technological advances, has poised geothermal for growth.

While wind and solar have been technological success stories — providing the cheapest electricity on a levelized cost basis — they are also intermittent. The quest for carbon-free energy is changing the economics of geothermal as an energy resource not beholden to weather patterns is worth more than an intermittent power source.

Early corporate movers, such as Microsoft and Google, are inking geothermal procurement deals, as are some local U.S. utilities, such as East Bay Community Energy and Clean Power Alliance, operating where regulators require clean resources that are not weather-dependent. In Europe, an urgency to decouple from Russian gas is inspiring new geothermal plants where resources are strong, as in Croatia.

These deployments will help develop the contract and financing models to drive down the costs of geothermal. The Inflation Reduction Act in the United States is allowing geothermal to qualify for the same tax credits as wind and solar, which will help attract new capital and contracts.

Meanwhile, innovators are inching toward breakthroughs to make geothermal easier and cheaper. Those bullish say addressing the technological barriers could catapult geothermal to become upwards of 20 or 30 percent of the global energy mix. Emerging challenges and solutions in two areas:

Locating easy-to-access resources. Historically, identifying fruitful geothermal resources has been difficult, and drilling in the wrong location is costly. Zanskar, a startup in Utah, is using big data to create models to locate geothermal resources.

California startup Fervo Energy approaches this from another angle. The company uses horizontal drilling and distributed fiber-optic sensing to tap into energy at previously uneconomic locations.

Enhanced geothermal systems. New technologies are delving deeper to reach superhot rocks, making the high heat needed to generate electricity available in more locations, not just geologic fault lines. Superhot rock systems have another benefit: If the heat of the well increases by 42 percent, the system can produce 10 times more energy.

Startups are looking for new ways to drill deeper. Quaise Energy out of Boston is refashioning millimeter-wave drilling techniques, used for nuclear fusion experiments. Oregon-based AltaRock is exploring laser beams to reach deeper, hotter energy resources.

Meanwhile, policies in the U.S., Europe and Asia are incentivizing breakthroughs and fuelling innovation. The U.S. federal government, which has set a goal of 50 percent carbon-free energy by 2030, issued an Energy Earthshot to reduce the cost of enhanced geothermal by 90 percent by 2035. In Indonesia, the government is underwriting the exploration of prospective fields to absorb risk. Lawmakers in the Philippines are allowing large-scale projects to be owned by foreign developers, an exception to cosmetic ownership requirements, to encourage further geothermal development.

Taken together, the time is right to call up this energy resource that for too long has been a benchwarmer in the renewable energy lineup.

[Want more great analysis of the clean energy transition? Sign up for the Energy Weekly newsletter.]

 

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