Geothermal's Mitchell moment

Fervo Energy is feeling the heat.

In this case, that’s not a bad thing for the Houston company, which said Wednesday its latest pilot project proves utility-scale renewable energy can be generated from intense heat thousands of feet below the earth’s surface, a process called geothermal, using the same technology that ignited last decade’s shale boom in the oil and gas industry.

“What we’ve proven out here is much like the shale revolution started out with early pilots and quickly drove much better performance, we can get much better as we go forward,” said Tim Latimer, the company’s founder.

Speaking to a group of investors, representatives from the U.S. Department of Energy, oil and gas executives, and oil field services representatives at an event Wednesday in Houston, company executives described their Project Red, a geothermal pilot in northern Nevada.

“We’ve reached that Mitchell energy moment for geothermal,” Jack Norbek, Fervo’s chief technology officer, said, referencing George Mitchell, often called the father of fracking, for helping make the practice of pumping liquid and sand underground to squeeze oil and gas economically from tight shale rock formations.

The equipment used in Project Red looks like that of a regular oil rig, but instead of drilling and fracking for hydrocarbons, Fervo is using methods perfected in hydraulic fracturing to break up rocks and unlock the earth’s heat to produce low-emission electricity. The process is called enhanced geothermal, and Fervo executives said its pilot set a new record for power output from an enhanced geothermal system at 3.5 megawatts – the equivalent of enough electricity to power around 700 Texas homes blasting air conditioning on a hot summer day.

For the Project Red pilot, Fervo signed a corporate agreement to develop geothermal power for Google’s data centers just outside Las Vegas. Fervo has in the past received grant funding from the Department of Energy and raised more than $100 million in equity funding.

Most geothermal power in the U.S. is produced by extracting hot water from underground and reinjecting it after it is used to spin the turbines that generate electricity.

The DOE in September announced efforts to expand enhanced geothermal, which doesn’t require an underground water source to extract from and to bring the cost down significantly over the next dozen years.

To develop traditional and enhanced geothermal systems on a large scale, overall, the government is investing nearly $200 million in research, according to the Energy Department. The majority of those funds – up to $165 million – are allocated for transitioning oil and gas practices to geothermal energy extraction.

Jeff Marootian, senior adviser at DOE and President Biden’s nominee for Assistant Secretary of Energy Efficiency and Renewable Energy, said Wednesday that the department’s goal is the reduce the cost of geothermal to $45 per megawatt, making it competitive with other power generation.

“That will require us continuing to invest in and partner with companies like Fervo, and many of the others that are here today, to help advance and accelerate the deployment of this technology,” Marootian said at the event.

High initial costs is one of the biggest barriers to widespread use of geothermal technology, according to Birol Dindoruk, a petroleum engineering professor at the University of Houston and a lead author on a multi-institute study on the future of geothermal energy in Texas. Whether at the utility or residential level, starting costs for geothermal can clock in at twice the amount for other power sources.

Dindoruk said while discoveries like Fervo’s are important in the effort to develop more clean, renewable energy, widespread adoption is still far off.

“But if you do certain things successfully, if you start replicating, then your unit costs will start going down,” he said. “So let’s say that Fervo has started one, they learn certain things, they do the second one cheaper, the third one cheaper and then a competitor comes. Suddenly, we expand the envelope.”

“We’ve reached that Mitchell energy moment for geothermal.”

The Cynthia and George Mitchell Foundation released a landmark CGMF-funded study, The Future of Geothermal in Texas: The Coming Century of Growth & Prosperity in the Lone Star State,” a multi-year, multi-disciplinary, cross-collaborative effort by researchers from the University of Texas at Austin, Southern Methodist University, Rice University, Texas A&M University, the University of Houston, University Lands, and the International Energy Agency on January 24, 2023.  

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