News & Insights

Geothermal energy: is it the next frontier?

THREE60 Energy Group | August 9th, 2022

By Brian Pye, Director – Energy Transition at THREE60 Energy,
Martin Rylance, Distinguished Advisor at THREE60 Energy

Humans have been using geothermal energy for centuries, with the famous Roman bathhouses as a prime example. It is the thermal energy available from the high internal temperatures of the earth. It is a potent energy source, as demonstrated by the power of a volcanic eruption.

In terms of modern uses for geothermal energy, power production and district heating are the primary applications. Power production uses geothermal heated water or steam to drive generators, while district heating uses hot water to transfer heat to buildings or neighbourhoods.

How does geothermal fit into the energy transition?

Governments, organisations, and individuals are all taking significant steps to reduce harmful emissions and limit the impact of climate change. The Paris Accord, which almost 200 nations have signed, sets a target to limit global warming to 1.5C. However, to achieve these targets, global energy use will have to transition away from oil and gas to cleaner energy sources.

No one renewable source of energy can replace the current supply of energy from oil and gas. Solar, wind, biomass, and hydrogen are all well-known technologies contributing to the transition. Geothermal is less well-known by the public but is a viable renewable energy source that can help to meet global emission and climate change targets.  A unique feature of geothermal energy is that it is always active and available, as opposed to wind and solar that are intermittent depending on environmental conditions.

Most, if not all, continents already use some geothermal energy to meet their needs, but there is potential for significant growth in the sector.

Rapid migration of assets and skills from oil and gas to geothermal

The energy transition not only requires the migration of energy from non-renewable to renewable sources, but it also requires the repurposing of oil and gas assets. Additionally, the declining oil and gas workforce requirements will leave many skilled resources looking for employment in alternative sectors.

Oil and gas wells can be repurposed for geothermal use. This is a significant benefit as the investment will have been written off against oil and gas production. Of course, there will be some modifications needed and challenges to address. Geothermal wells tend to be deeper and operate at higher temperatures than oil and gas wells. These conditions require different and robust materials for tools and equipment. Nevertheless, the base infrastructure already exists for implementing geothermal solutions.

Many engineering disciplines and skills translate directly from oil and gas to geothermal technology. Engineers with expertise in well integrity management, corrosion and erosion, wellbore management, and root cause analysis, for instance, have relevant experience for geothermal projects. They even use the same digital tools for modelling and analysing well performance. Fracturing and stimulation is another area of expertise transferrable to the geothermal sector. Engineers use these tools to open hydraulic communication between wellbores and access that thermal energy.

The future of geothermal energy

One of the current challenges for geothermal is that the low installed base capacity means that the industry does not yet benefit from economies of scale and technology development. Costs of production range between $66 and $75 / MWh, but these could drop by 20 to 30%, reaching <$60 or even <$50 / MWh by 2030. [1]

Governments are also contributing to the development of geothermal technology by making funds available. In the USA, the Consolidated Land Appropriations Act passed in 2020 seeks to ease access to federal land for renewable energy. It establishes a goal of 25 GW of nameplate capacity and an annual budget of $170 million for research and development. From a current base of under 4 GW capacity, there is a significant opportunity for growth in the geothermal market in the USA alone.

With this in mind, THREE60 Energy is collaborating with Prof. Silviu Livescu’s Sustainable Geoenergy Research and Engineering Laboratory at the University of Texas at Austin. This initiative aims to accelerate the development of geothermal solutions and create a platform for the migration and application of oil and gas expertise. A key deliverable from this collaboration will be a software tool for analysing a building’s heating and cooling needs and proposing technical and economic geothermal solutions.

Some geothermal projects in Europe are already co-producing heat for buildings from oil and gas wells. Future opportunities include the potential conversion of oil and gas wells from depleted fields into geothermal wells, thus making use of existing infrastructure. This step may require deepening and repurposing of the wells, along with modifying tools and equipment for the higher temperatures.


Global effort in geothermal technical progression

There are multiple initiatives in play across the world energy business with regard to specific geothermal considerations. In the USA, as well as UT at Austin as already noted, we have seen the formation of the Texas Geothermal Alliance (TGA) and the continued progression also being made at the DoE funded Frontier Observatory for Research in Geothermal Energy (FORGE).  Europe and many other parts of the world have similar efforts underway, all of which will support addressing a number of the fundamental challenges of geothermal energy and particularly enhanced geothermal systems (EGS), which will need to be resolved for economic scale power generation to be achieved. The SPE has also newly formed a Geothermal Technical Section, in order to harness the engineering body horsepower in support of this delivery.

Of these challenges related to delivery from drilling, stands out high on the agenda; and this is the achievable rate of penetration (ROP) in these granitic and hard-rock environments; given that we require high-angle wells. Without going into too much detail, recent work from Texas A&M (for FORGE) has demonstrated that a controlled physics-based process applied to PDC bit design has delivered an 80% improvement in ROP (see Fig. 1). This translation of oil and gas workflows to the geothermal arena will continue to help make significant inroads.

Progression of-drill rate performance at FORGE.jpg

With the completion and stimulation, the requirements for multiple advances across a range of challenges is just as daunting. For example, the components and materials that we need to use to prepare wells will need to operate in a very different envelope (350 – 450 Deg C), combine this with the cyclic (temperature) nature of the operations themselves, and integrity/functionality becomes a major issue. While development and advancement of the functional envelopes will occur, it is typically being initiated through Government energy sector seed-money. This encouragement is required in the absence of market scale to initiate technical advancement; as the scope for geothermal in all its forms grows, we will see increasing industry uptake. The same can be said for the EGS aspects, and we are already seeing that many of the lessons that have been learned in unconventional oil and gas have corresponding areas of application in the EGS environment.

Finally, surface aspects associated with the multiple processing approaches should not be underestimated. Such processes include dry-steam, flash-steam and binary-cycle power stations. The majority of such systems present low efficiency < 15% and the bulk of global plants < 10%. This current inefficiency presents a huge opportunity to the industry to consider a swathe of solutions to moving that by factors of two or more. The true strength of surface-processing will be where the range of offtake and applications can be maximised. So, principal function power generation, then stepping down through to agricultural (greenhouse) heating, for example, as the power-fluid is cooled prior to return to the system. In addition to the plant efficiency considerations, there are also the chemical aspects that will need to be taken into account. Various scales, depositions and potential for NORM will need to be assessed on a case-by-case basis, and much like in the oil and gas industry, the area of flow-assurance will be one that will need to be directly incorporated into the overall production system.

While the challenges are many, they are also great opportunities and directly reflect similar learning-curves that the oil and gas industry has repeatedly demonstrated an ability to traverse effectively.

THREE60 Energy’s geothermal footprint

THREE60 Energy is well-positioned to play a part in expanding geothermal energy use. Our history as an independent energy service company offering complete asset lifecycle expertise has enabled us to develop capabilities that cover projects from conceptual design to decommissioning. In particular, our experience in well engineering and subsurface disciplines covers decades of oil and gas projects, and we have more than 250 well engineers and subsurface professionals presently working in our organisation.

Our expertise covers design, operations, maintenance, and process engineering in additional to subsurface geology, geophysics, reservoir, geomechanical and petrophysics expertise. We have numerous subject matter experts and technical authorities across various disciplines. THREE60 Energy also has a sustainability advisory service, which offers a complete suite of services including EGS performance monitoring and reporting, strategy and corporate governance and due diligence. These services are crucial to the industry as we strive to make our contribution to the energy transition.

THREE60 Energy’s global footprint has opened doors for us to be involved in projects all over the world. We are currently working on a conceptual project with a major national oil company in South East Asia, as well as various projects in locations such as the UK, Scandinavia and the USA. And as members of the Norwegian Centre for Geothermal Energy Research (CGER), we are active participants of the global geothermal community through key research and development initiatives.

We anticipate an acceleration of interest in geothermal technology and capability worldwide, and we are well-positioned to bring a high level of expertise to these projects as they unfold.

This article also appears in the Summer 2022 edition of Energy Global. (Page 48-51)


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