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The First-Ever Enhanced Geothermal Plant in the United States

U.S. tech giant Google and geothermal startup Fervo Energy have launched the U.S.' first-ever enhanced geothermal plant that will produce 100% carbon-free electricity round the clock. Dubbed Project Red, the 3.5-megawatt plant is now supplying power directly to the Las Vegas-based utility NV Energy with enough electricity to power roughly 2,600 U.S. homes.

Whereas that amount of power might seem minuscule compared to the Gigawatt range typical of nuclear plants, Project Red is the most powerful among the world's fleet of 40-plus enhanced geothermal plants currently in operation.

Google started backing Fervo's project in 2021 as it aims to run its massive data centers on 100% carbon-free energy by 2030.

"When we began our partnership with Fervo, we knew that a first-of-a-kind project like this would require a wide range of technical and operational innovations. The result is a geothermal plant that can produce round-the-clock [carbon-free energy] using less land than other clean energy sources," Michael Terrell, Google's senior director of energy and climate, wrote in a blog post.

Fervo, which has raised more than $180 million since 2017, is among dozens of companies across the globe striving to develop cheaper geothermal power.

Enhanced Geothermal Systems

Geothermal energy, used in electricity generation and heating/cooling, is available almost anywhere in the earth's crust. Although more people are familiar with geothermal energy from seismically active hotspots that create hot springs and geysers, the earth's crust provides a steady supply of milder heat at depths of anywhere from 10 to a few hundred feet below the surface that can be harnessed and put into good use. This heat originates from the time the planet formed and accreted; the decay of radioactive elements and frictional heating caused by denser core material sinking to the earth's core.

Besides its wide availability, geothermal energy is quite reliable. It boasts a high capacity factor of 74.3% vs. 24.9% for solar and 35.4% for wind. Another key benefit is that geothermal is much cleaner than any fossil fuel. 

According to the U.S. Energy Information Administration (EIA), geothermal power plants emit ~99% less cCO2 and 97% less sulfur compounds than fossil fuel power plants of similar size. Geothermal power plants can be fitted with scrubbers to remove the hydrogen sulfide that naturally occurs in geothermal reservoirs.

Despite its manifold benefits, geothermal energy is underutilized in the United States and globally. In 2019, the U.S. generated ~18,300 GWh from geothermal sources, good for just 0.4% of U.S. power generation. Europe is hardly better off, with just 1.5GW of the continent's 209 GW electricity capacity being geothermal. 

Whereas oil and gas companies drill more than 100K oil wells in a typical year, only 800 geothermal wells are drilled globally. The U.S. Department of Energy(DoE) has provided estimates that the continental U.S. has over 100 GW of geothermal electric capacity, 40x the current installed geothermal capacity, meaning geothermal can supply up to 10% of the country's power needs. 

High drilling and production costs are mainly to blame for the low adoption rates of geothermal energy. A 2021 study revealed that the Levelized Cost of Energy (LCOE) for geothermal energy in the U.S. clocked in at $84.80/MWh, more than double the $36.60/MWh for utility-scale solar and $40.90/MWh for onshore wind. 

Enter enhanced geothermal systems or EGS…

Similar to the technology used in shale drilling, EGS creates a subsurface fracture system that increases the permeability of rock. A heat transfer fluid (typically water) is then injected into this fractured rock, which heats it up. The heated fluid is then pumped back to the surface to generate electricity. The main kicker: enhanced geothermal plants (such as Google's) can generate much cheaper electricity compared to conventional geothermal plants.

Last year, the U.S. Department of Energy unveiled a $165 million investment in the Enhanced Geothermal Research initiative. The project aims to lower the cost of EGS projects to $45 per MWh by 2035, comparable to the current generation costs of onshore wind systems. Google did not reveal generation costs for its geothermal plant but said it hopes to reach the DoE target in a matter of years.

The private sector is also beginning to explore geothermal energy, with many geothermal energy startups coming up. Last year, Chevron New Energies, a Chevron (NYSE:CVX) clean energy subsidiary, partnered with Sweden's Baseload Capital to develop geothermal projects in the United States. Four years ago, Chevron and BP Inc. (NYSE: BP) invested $40 million in Canadian geothermal energy company Eavor Technologies. 

"It's like solar: If you look at solar 20 years ago, nobody's interested in solar because it costs too much. But as solar has grown, the cost has come down as it's improved in scale. We're kind of on the cusp of moving into the cost-effective range [for geothermal], just like we did with solar, over the next 20 years," Roland Horne, a professor of earth sciences at Stanford University, told Yahoo News.

By Alex Kimani for Oilprice.com

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Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.  More