Does This Finally Make Geothermal Economically Viable?
Transitional Energy is working on transitioning existing oil and gas wells and infrastructure into clean baseload power generators. Traditional geothermal is high risk and typically uneconomic, however Transitional Energy is providing a novel solution to this problem.
Why does this matter?
- Geothermal energy can be harnessed at any time of day, but the technologies to explore and drill for resources make geothermal energy more expensive than other renewables.
- Geothermal coproduction has a minimal land use footprint due to the small size of the power units and reusing the existing wells disturbed land. Wind and solar take up huge amounts of land and frequently cause issues with adjacent landowners.
- As much as 50% of the cost of geothermal comes from drilling. This is where Transitional Energy comes in — to convert existing oil and gas wellbores into cost competitive renewable energy assets.
- There are a total of about 800,000 wells (out of almost 1 million wells) in the US that are considered stripper wells, which produce less than 15 barrels per day. Most of these stripper wells noted by the EIA are present in basins, which are identified as medium and high temperature geothermal resources by the USGS.
- Sedimentary geothermal energy competes with fossil fuels by providing clean power generation and competes with wind and solar by providing baseload power that doesn’t require battery storage.
- Geothermal energy can help as the US strives to meet aggressive renewable energy goals.
- Baseload power is desperately needed as seen by the latest brownouts that are occurring in California. As more battery storage is created to offset the intermittent nature of wind and solar, in due time there will be a glut of used batteries with caustic chemicals going into landfills. Geothermal is on all the time (or can cycle to meet demand peaks) and does not require batteries.
- Technology improvements and cost cuts in geothermal energy will come from the oil industry.
- As fossil fuels are depleted, society will need another source for energy — renewables energy will grow, including geothermal energy. Additionally, the drop in oil demand and services will also make geothermal more affordable.
- According to the EIA, the US leads globally in geothermal electricity generation, but domestically, geothermal is a negligible part of total electricity generation. However, the Department of Energy estimates that this could change, and geothermal could end up generating 8.5% of all US electricity.
- In the today’s circumstances 100,000+ oil and gas workers have been laid off this year alone and 3 million oil and gas sites are abandoned. The US could resolve both of these issues by paying laid-off energy workers to clean up abandoned wells or repurposing these wells for geothermal.
The cost of transitioning wells from oil and gas to geothermal is a few tens of thousands of dollars, depending on the work the well needs. Revenue from electrical sales are typically handled through power purchase agreements that have terms anywhere from 10 to 40 years. The initial projects modeled have returns from 25% to above 100% depending revenue and expenses. Converting used wells into geothermal resources would be a great use of “abandoned” land/resources.
This story has been featured in The Impact, an email newsletter that covers the latest news in the renewables and cleantech space. Check it out and subscribe here.