Enhanced Geothermal Systems - The "Killer App" of the Energy World
Google surprised the audience at the National Clean Energy Summit in August by pronouncing that “enhanced” geothermal energy could be the “killer app” of the energy world. In September, Google and General Electric jointly announced an effort to more fully develop this potentially unlimited resource.
What exactly is “enhanced” geothermal energy? Why has it excited such giants as General Electric and Google? And, will it live up to expectations?
Traditional geothermal energy relies on naturally occurring pockets of steam and hot water beneath the earth. Geothermal power plants on the surface use the steam from 1 to 2 miles below the surface to run turbines and generate electricity. In order to be economic, large geothermal plants are usually built where the heat is relatively near the surface and where the temperatures of the hydrothermal resources are generally warm (between 300 and 700 degrees Fahrenheit). These plants produce, on average, for about 30 years and, depending on their location, are competitive with the prices from traditional fossil fuels plants. However, large scale geothermal resources seem quite hard to come by or the resources are located at uneconomic depths. Consequently, traditional geothermal power plants produce less than .0035 of total electric generation in the US and less than 1 percent world-wide.
“Enhanced” geothermal however, taps into the earth’s unlimited hot rock. Those rocks are then fractured, water is circulated through the system, and the resulting steam is used to produce electricity in a conventional turbine.
A 2006 report on Enhanced Geothermal Systems (EGS) by MIT (sited by Idaho National Laboratory and Wikipedia) concluded that it would be affordable to generate 100 GWe (gigawatts of electricity) or more by 2050 in the United States alone, for a maximum investment of 1 billion US dollars in research and development over 15 years.
The MIT report calculated the world's total EGS resources to be over 13,000 ZJ. Of these, over 200 ZJ would be extractable, with the potential to increase this to over 2,000 ZJ with technology improvements - sufficient to provide all the world's present energy needs for several millennia. The key characteristic of an EGS (also called a Hot Dry Rock system), is that it reaches at least 10 km down into hard rock. At a typical site two holes would be bored and the deep rock between them fractured. Water would be pumped down one and steam would come up the other. The MIT report estimated that there was enough energy in hard rocks 10 km below the United States to supply all the world's current needs for 30,000 years.
What then are the impediments to this seemingly unlimited resource? First, the depth of these holes are daunting. There are technological challenges involved in drilling wide bore holes to depths of 4,500 meters (about 2.8 miles) as well as the difficulty involved with breaking (fracturing) rock over large volumes. Second, drilling to such depths is currently very expensive. Conventional oil and gas wells drilled to 15,000 feet generally cost tens of millions of dollars. Each enhanced geothermal plant would require two holes.
Google is relying on several potential breakthroughs to advance EGS. On the cost side, Google expects that the economies of scale will bring project costs down in line with coal-fired plants. On the technology side, Google has invested in new hard rock drilling technologies and in companies involved in EGS research and development.
Certainly, the injection of GE as a participant in enhanced geothermal lends tremendous credibility to Google’s efforts. The only question in my mind is whether any one approach is truly the “killer app” in the energy world.
Observations on The National Clean Energy Summit
I had the privilege of attending the National Clean Energy Summit in Las Vegas on August 18th and 19th. Sponsored by Senate Majority Leader Harry Reid, the University of Nevada Las Vegas, and the Center for American Progress, the summit brought to together an extraordinary number of state and national policy makers to discuss the mandate for a clean energy agenda.
The conference opened with President Bill Clinton and included such major luminaries as T. Boone Pickens, Robert Rubin, and Michael Bloomberg, not to mention the governors of Arizona, Colorado, and Utah. In addition, there were speakers from academia, utilities, finance, and technology related initiatives.
I want to share some of my observations:
First, there is a mandate for a clean energy future. It is bipartisan and it is imminent. Greenhouse gas emissions and our dependence on foreign oil are the driving factors. While state and local governments are well in front of the federal government, policy makers are anxious for Congress to take decisive action.
Second, there were a number of common themes expressed by the vast majority of speakers -- so much so -- that they virtually became the “holy grail” of the summit. Here is what they are:
- Tax Credits - Speaker after speaker called for the extension of current energy tax credits. Beyond that, longer term tax incentives (in the form of both guarantees and credits) were considered essential to jump start and sustain solar, wind, and geothermal industries.
- Energy Conservation and Efficiency - The great low hanging fruit of clean energy. President Clinton’s “no brainer.” The thought is that through energy conservation and efficiency initiatives new generation can be avoided. Paths included utility decoupling, along with utility incentives, longer term financing, and application of new technologies, particularly in lighting and smart meters.
- A Price on Carbon - Unanimity that carbon had to have a price, for social, health, and economic reasons. Most of the time, this meant a cap and trade system. Mayor Bloomberg called for a straight-forward carbon tax. The prevailing view was that it didn’t matter who became next President as both candidates were committed to sign cap and trade legislation.
- The Electric Grid - Perhaps the most prevailing theme was the call for a revamped national transmission structure. In short, both wind and solar are located where the grid is weakest -- wind in the Midwest and solar in the Southwest. A projected $60 billion will be necessary to create an effective national grid that moves these cleaner fuels to populated markets.
The big surprise at the summit, at least to me, was Dan Reicher’s, of Google, presentation that the future of clean renewable energy lay primarily in “enhanced” geothermal energy. In essence, enhanced geothermal means uses the earth’s abundance of hot spots as a heat exchanger. Holes (using newly developed and less expensive drilling technology) are drilled to these hot zones, water is poured into the hole, and steam rises to drive turbines. Google is convinced we can produce massive amounts of clean electricity world-wide using this process.
Other observations:
Coal - At least with respect to the summit attendees, unless the coal industry finds a way to sequester carbon safely, the future of coal is bleak. The irony, of course, is the projected growth in new coal-fired plants to meet rising demand.
Offshore Drilling - Most speakers, including Senator Reid, felt offshore drilling in sensitive areas would not have a meaningful impact on prices or supply. Nevertheless, Senator Reid indicated an offshore drilling “compromise” would pass the Senate this year. This was interpreted as lifting the federal ban, but giving states the right to veto development.
Biofuels - The food-for-fuel issue was much in evidence. Numerous speakers called for the shift from food based ethanol to waste based ethanol (cellulostic). Hope seems on the horizon with new technologies.
Federal Renewable Portfolio Standards - Another virtually unanimous call. While 23 states and the District of Columbia have some form of renewable energy portfolio mandates (often 20 percent), there was a definite call for federal standards. Look for this to be included and probably pass in next years cap and trade legislation.
Autos - While T. Boon Pickens called for natural gas powered vehicles (at least in the short-term) most speakers believe in a future powered by electric cars. President Clinton said that 100 mpg cars are now technically available using supplemental batteries in conventional hybrids. Other speakers stressed the reduction in green house gas emissions using electric vehicles even if the electricity was based upon coal-fired generation. FERC Commissioner, Wellinghiff, went even further saying that electric-fired cars would provide such a significant benefit to the utilities, that we would be paid to charge them.
Financing - According to Jon Creyts of McKinsey, the upfront capital required to significantly reduce our GHG emission (which will be a projected 9.7 gigatons (a billion tons) of CO2 in 2030) will be approximately 1.5 percent of GDP. While I need to figure out how much that is, suffice to say that upgrading the national grid alone is expected to cost $60 billion. Bank of America predicted its investments would total $20 billion over the next 10 years. Collectively, the financial sector is looking for tax incentives and the maturing of the carbon markets.
Nuclear - Only one speaker brought up nuclear energy. Activists in the audience objected to nuclear transportation and waste. Despite the fact that nuclear constitutes 20 percent of current usage and is clean burning, it was conspicuously avoided.
