Geothermal is ground heat stored in the earth's crust. Given that the heat is constantly present within the earth’s subsurface and carried via extremely hot water or steam, this type of renewable energy is not dependent on weather conditions and offers high capacity for cooling and heating purposes as well as electricity generation.
As a renewable energy source that is not dependent on location and weather conditions, it offers a vast potential to accelerate Energy Transition. However, it is still largely untapped as it only comprised about one percent of total renewable electricity generation in 2020 (IRENA, 2022).
There are just a few countries (Iceland, El Salvador, New Zealand, Kenya, and Philippines) that are taking advantage of geothermal energy in fulfilling their electricity demand, but there is a growing interest from other countries in tapping this renewable energy source as a result of stronger calls for Energy Transition and recent technological advancements.
To expound on this highly relevant issue, we invited International Geothermal Association (IGA) Executive Director Dr. Marit Brommer for an interview. Dr. Brommer has 15 years of experience in the oil and gas industry where she first gained operational experience as wellsite geologist and production technologist, followed by roles in seismic technology deployment.
At the IGA she is focusing on creating strong partnerships with international operating organisations, partners and industries. She is engaged in strategic initiatives regarding industry standards and sustainability, and focuses on financing geothermal projects as well as public outreach.
Dr. Brommer holds a PhD in applied geophysics from TU Delft and a MSc in Geology from University Amsterdam, both located in The Netherlands.
Read her insights below.
How would you describe the current state of geothermal energy globally? How can we reach its potential to contribute significantly to the global shift to clean energy?
For geothermal energy, what we are really interested in is providing electricity through our reservoirs as well as providing heating and cooling solutions.
On the first part, the generation of electricity, geothermal power has a global installed capacity of 16GW. This is quite small, but the aim is to become another giant in the electricity generation.
If you really look at the countries, governments and industries that have evolved around electricity generation through geothermal, it is quite clear that they are focused on their own local jurisdictions. Hence, the global approach trying to share knowledge, best practices, standardisation, and deployment of geothermal has always been a little bit fragmented.
The second part of geothermal energy in the current state of affairs is providing heating and cooling solutions. Geothermal heating can be for built environments such as individual households, district heating, etc. This is of particular interest for cities to develop this further not just in light of climate change narratives but also of energy security and energy independence. And geothermal has played a substantial role, not only in Europe where we provide geothermal district heating, but also in the greenhouse sector which is very much dependent on fossil fuels. Geothermal is becoming an obvious alternative for these sectors as it is mature, localised and, in the long run, one of the cheapest options for providing heating.
Cooling is another aspect where we see the demand for geothermal energy, especially in the global south such as Latin America and parts of Asia Pacific. Most of the time, these are standalone applications because there are still no district heating or cooling systems in the Asia Pacific.
For countries that have utilised geothermal and really exploded the curve around its installed capacity is China. Europe is doing its part, Germany is leading, as well as Turkey and Iceland.
In total, we have around 100-110 GW thermal. And the aim for geothermal heating and cooling solutions is to grow around 20 times in the coming 20 years. For electricity, we expect a 10-fold growth by the end of this decade if all the plans of the governments around the world, together with the enabling industries, reach that potential. If another scenario kicks in, where leading industries like oil and gas really diversify to reduce carbon emissions, we can expect 20 to 30 times growth in geothermal power.
What have been the challenges for a much larger scale rollout of geothermal energy?
My view of geothermal is tainted by my background as a subsurface professional working in oil and gas where a global approach is actually proving to be worth its while. Geology, rocks, reservoirs and the way we produce our resources are very similar in different environments from Asia to Africa, or from Africa to Europe, or from Europe to the US. This means that learning by doing and repetition as well as sharing best practices across a global company that has global assets is why oil and gas is extremely good at what it is doing.
For geothermal, we are a local community in every jurisdiction. We have local companies, local developers, local utility companies or local public entities that say we want local geothermal facilities in my constituency. There are a few global companies that have stretched their portfolios across the world, but they are not in competition with each other because there are only a handful of projects to look after. So, the shared learning, best practices, standardisation and unification around technologies and how we optimise our professionalism from subsurface to surface are only for a couple of companies who have capitalised on that.
This lack of competition and the limited and fragmented number of trained people migrating from one part of the world to another require a revolution in order to efficiently scale geothermal technologies across the globe.
Unlike other renewable energy technologies, geothermal energy is not very straightforward. We have a very similar DNA with oil and gas and extractive industries. We explore first, we have to assess the resources, we drill exploration wells, then turn that into production wells. The margin is so low that our first shot should be the right shot. Otherwise, we are losing money.
The differing approaches towards proving the resource—exploring, drilling, extracting and reinjecting the fluids—deter investors. It is an easy choice for them to choose between geothermal projects and other renewable energy projects where you can easily tell the amount of investment vis-a-vis how much Megawatt or energy? they can produce.
Given this challenge, geothermal is developed in the public domain, funded by public money and quite dependent on subsidies from public entities until this day. And that backs the question whether that is allowing us to grow at the speed and pace that we would like to see.
Nevertheless, things are changing. Geothermal energy is better seen now as a viable alternative to fossil fuels. There are a couple of amazing things going on and I can really see that the time has changed completely compared to five years ago when I started working in geothermal.
Were there recent developments in terms of easing the challenges in scaling up?
There are two things that are technology-driven. First, there is much more interest in geothermal energy from the oil and gas industry from a technology point of view. They are interested in how to transfer the capability from oil and gas to geothermal, and vice versa. There is a lot more initiative around shared learning, and a lot more technology startups that are looking at different types of drilling and tooling, designing of wells, among others.
It is also exciting that there are several initiatives led by the oil and gas industry, which aims to reuse abandoned and depleted wells and turn them into geothermal—utilising these reservoirs not just for its water but also for its heat. This generated energy out of wells could be used by other industries such as greenhouses, but can also be used by oil and gas companies themselves and help reduce their carbon footprint.
Second is the role of government. I see a lot more governments really wanting to move out of fossil fuels, which is much stronger than five years ago when I joined the International Geothermal Association.
However, in supporting governments in this move to clean energy, we need to move beyond the paradigm that energy is electricity. Electricity is just 20 to 25 percent of energy consumption, and the rest are mobility and heating and cooling. Hence, we need to also target thermal energy. And for geothermal energy, we can do both power and heating and cooling.
By levering all technologies to supply not just electricity, we are finally encompassing sustainable energy for all.
It is notable that private sector cooperation in sustainable energy projects is central to the Energy Transition. What is the current appetite for investments in geothermal energy projects? What is keeping private sectors from investing?
A lot of investors are quite hesitant when the right policies are not set. It is not to point constantly at governments, but if you really look at where our policy sits with geothermal, it is not quite favourable. It is either not mentioned at all in some sustainable energy strategies and roadmaps, or it is mentioned very vaguely.
The fact that geothermal to power and geothermal to heat have different types of subsidies or regulatory frameworks is also not helping. So, if you look at territories that are active in geothermal, such as Kenya, Indonesia, Latin America, USA and some parts of Europe, you will see that there are still some thoughts around what is the policy, what is geothermal and how do we legislate it, how do we sign off power purchase agreements, what is the feed-in tariff, how is geothermal classified, etc. And that is also not helping geothermal as an attractive energy technology for investors.
So, concise, standardised and well-thought out policies and a facilitating government framework that is supportive of investments on geothermal would be fantastic, especially in light of ESG (environment, social and government) principles. Geothermal is pretty good in all these three. It has one of the lowest carbon emissions and environmental footprint, and since we are public, our governance structure is sound and we are always audited.
All that should make investing in geothermal more attractive or favourable to the investors. And I believe we are going that direction as we have seen a tremendous increase in committed funds going to geothermal worldwide—in terms of technology startups receiving seed funding as well as new projects in Latin America, South Africa and Indonesia.
Another factor is the risks involved. From an investment perspective, how do we assess risks when it comes to resource assessment and why is it not standardised across the route. So, if you go to a bank that wants to loan you or give you some guarantees to insure the first well, they will do their own internal assessment. And this might be different from the assessor you hired for your independent review.
If all these elements are captured ad hoc, it does not give any trust to the investment community. Part of our work at IGA is tackling this.
And lastly, investment in geothermal energy takes a long time to see a return on investment and it takes even a longer time to see it as your cash cow. Only the patient capitalists are interested in geothermal, and so far they are not associated with private equity. Hence, generally speaking we are still under the wings of public entities.
In terms of technological developments in the geothermal energy sphere, were there recent breakthroughs that you believe would be key in the acceleration of geothermal energy rollouts?
There are a couple of fantastic new developments in geothermal, both in the drilling side and the way we design the subsurface completion. And a lot of these is a result of synergy between the oil and gas industry and geothermal and the fact that both sectors have had decades of learning on how to execute subsurface projects really well.
One of the crossovers between the oil and gas and geothermal is this so-called closed loop systems, where we are not dependent on whether the rocks are water-bearing or fluid-bearing. They can be dry as we are only harvesting heat, with subsurface depths of wherever you want them to be for whatever temperature you need it to be. And that is a fantastic mindset to think about geothermal: being not tied to specific geographic locations.
Second, if we look at the trends in countries (i.e. Iceland, New Zealand and the United States) that are leading geothermal, the trend is to go deeper and hotter. And this is very exciting as we are not just dealing with a couple of hundred degrees celsius, but we are talking about 600 or 900 and even 1200 degrees celsius. Currently, there are not a lot of technologies that could deal with really high temperatures, but we are doing a lot of assessments of new technologies needed to monitor and measure down these holes. And why is it just a few of these countries working on this is because it only needs to drill a couple of wells to harvest massive amounts of electricity.
Third is what we call hot dry rock or enhanced geothermal system engineering, and that is producing hot water without the closed loop system. That is being done in France, Cornwall and Utah. So far, the results are showing interesting results however more work needs to be done in order to capitalise on the huge potential of these technologies.
Source: Statistics Time Series. (2022). International Renewable Energy Agency. Retrieved 05 September 2022, from https://www.irena.org/Statistics/View-Data-by-Topic/Capacity-and-Generation/Statistics-Time-Series
About the International Geothermal Association (IGA)
The IGA stands for the International Geothermal Association, a global platform representing the geothermal sector serving 5500 members through 35 affiliated country members. The IGA mission is to facilitate and promote the uptake of geothermal resources both for baseload electricity and direct heating and cooling utilisation. The IGA flagship, the World Geothermal Congress, takes place every three years, where it convenes the global geothermal sector and sets the future agenda. The IGA and its members pledges to goal zero and is committed to deliver on the Sustainable Development Goal #7 – clean and affordable energy for all.