Geothermal’s Low-Grade Revolution

Geothermal’s Low-Grade Revolution

by Carl Hoiland

The still-burning Dixie Fire swept through an area of California I’ve cherished since childhood—the north fork of the Feather River, where my grandfather held a few patented mineral claims and taught me how to pan for placer gold in the summers. I was named after him and somewhat circuitously I ended up following his same profession, becoming a geologist and a prospector. In the early 1990s, on his ranch just outside of the recently lost town of Greenville, CA, I absorbed his love of renewable energy, fascinated by the micro wind turbine and rooftop solar-thermal water heating apparatus he’d built for rural resiliency. I remember he would go on and on about all the energy yet to be captured from the tides and waves and heat beneath, fantastical visions of the future. 

Why do I bring this up in an article about geothermal? It’s because there’s something my grandfather taught me about gold that has long since fueled my optimism about geothermal. It’s that all rocks have some (usually trace) amount of gold in them, but that what we call “ore” is really only defined by what technologies we have available to extract the gold profitably. 

Improve the technology, and what was formerly waste rock will become ore. 

Estimates of remaining reserves of natural resources, therefore, are dictated more by technology and market pricing than by geology—part of why there’ve been so many false “tops” predicted—and the same is true for geothermal. 

Though many had thought that all the commercial-grade geothermal resources (near enough to consumers) were tapped long ago (or otherwise reserved from development), new technologies are rapidly lowering the threshold of “commercial-grade”. And they look set to usher in a “third wave” of geothermal development in the USA, with the potential to entirely dwarf the previous two geothermal waves of the 1980s and late 2000s-early 2010s in both scale and importance.

Here’s what you need to know:

  1. Geothermal power is not new—it represents one of the first human advances in utilizing fully renewable energy for electricity generation, over 100 years ago. Its primary benefits are that it’s always on, has a small footprint, and relatively low levelized costs. In the USA, geothermal development has ridden two waves of rapid gains, the first and biggest in the 1980s and the second and smaller in the late 2000s-early 2010s. However, with “high-grade” resources proving difficult to find and low-grade resources too costly to develop, geothermal growth has been limited

  1. We are entering the third wave of geothermal development, targeting a much larger resource opportunity previously considered uneconomic, driven by four primary forces:

  • Decreasing drilling costs (e.g., tech transfer from O&G).

  • Decreasing turbine costs (e.g., low-temp power plants getting cheaper)

  • Decreasing soft costs (e.g., new exploration methods and improved analytics)

  • Increasing demand for firm renewable generation

These trends have prompted a marked increase in press coverage (e.g., Vox, 2020, Issues, 2021, LA Times, 2020, CNBC, 2021) and startup investment (more VC investment in the last 12 months than the prior 10 years combined).

  1. Geothermal is one of our best options for achieving a 100% carbon-free energy mix without incurring significant price increases to consumers. Decarbonizing the “last mile” of the electric grid is hard, and the latest modeling continues to highlight the critical need for “firm” renewable generation (e.g., Larsen et al., 2020). Nuclear, long-duration storage, and natural gas with CCS are other potential solutions, but they too have significant technical and commercial challenges.

Here’s what you can do to help:

  1. Be a builder/enabler — Geothermal tech is difficult and won’t be solved with just code or business innovations. It takes scientists and engineers and requires real technical breakthroughs. It also takes capital. Sometimes a discouraging amount of capital. And then, to get to a meaningful scale, there’s a need for those with experience in power, project finance, and development. So reach out and see how you can be a catalyst for this still-nascent industry.

  1. Ride out the failures — there is a wide variety of very new geothermal heat and power technologies being funded and tested (Dourado, 2021) that are attempting to make very “low grade” geothermal regions developable (looking at you Texas), and inevitably, some of these approaches will fail. When this happens, don’t forget that the subsurface is a tricky, complex, and hard (no pun intended) environment to innovate in, and O&G and minerals industries have had the same types of failures, but eventually achieved scale. 

  1. Don’t oversimplify the challenges — Geothermal lost ~10 years of progress during the 2010s in part because of a narrative that cost declines in solar and wind (and battery) had made geothermal obsolete. This overly simplistic narrative about highly complex energy systems was wrong, but it had a real impact on slowing geothermal investment just when we should have been doubling our efforts. If this is climate’s Normandy moment, the odds of us succeeding are highest if we push on all technology fronts until we know we’ve turned the tide.

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