Could Geothermal Help Offset Future Energy Woes?
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Geothermal energy is one of many potential additions to the energy mix that could help meet future demand and plug the gaps when it comes to predicted capacity shortfalls. And, because it generates energy from the heat of the Earth, it checks the box as a clean energy source as well.
Geothermal doesn’t get a lot of press, but based on a recent milestone in California, that might change.
Recent Advancements in Geothermal Energy
Southern California Edison (SCE) has formed a geothermal partnership with a Houston-based company called Fervo Energy. The project, called the Cape Station project, will generate 400 MW of electricity, which will be purchased by SCE and is enough to power 400,000 homes. Power should start flowing as early as 2026.
This partnership is noteworthy mainly because the SCE purchase agreement will essentially fund the project. In fact, the most efficient way for this generation source to expand is to secure purchase agreements in advance – simply put, having a bult-in buyer can go a long way toward reducing the financial risks of these types of projects.
Another noteworthy aspect of the Cape Station project is that the electricity generated can be used in a wide variety of applications, for a wide variety of customers. Unlike geothermal projects of the past, new technological advancements around drilling practices allow the technology to be deployed in many places.
In the past, these projects were required to be built near existing natural resources such as superheated steam reservoirs, which are relatively rare. But now, thanks to state-of-the-art horizontal drilling practices adopted from the oil and gas industry, these types of reservoirs can be created from any hot rock. For example, the SCE project will require the drilling of up to 125 hot rock wells in Utah.
As of the time of this writing, geothermal only accounts for 0.5% of large-scale generation in the U.S. But thanks to technological advancements and the clean energy gap, utilization of this technology should continue to expand in the years to come.
