FRACKING BY ANY OTHER NAME

Government Funding Fuels Geothermal Expansion

By Felicity Bradstock - Nov 23, 2024

Recent technological advancements, coupled with significant government funding, have propelled the geothermal energy industry forward.

The US and Europe are leading the charge, with new legislation and substantial investments paving the way for a geothermal boom.

Asian countries, including China and Indonesia, are also rapidly expanding their geothermal capacities.



Following an influx of funding in the sector in recent years, there have been significant advances in geothermal energy. More countries are backing the clean energy source in a bid to diversify their energy mix and shift away from a reliance on fossil fuels towards green alternatives. In addition to government backing for geothermal projects, many private companies, including several technology giants, are investing in the clean energy source to help meet the growing electricity demand due to the commercial rollout of advanced technologies.

People have been tapping into geothermal energy worldwide from natural heat sources, such as hot springs, for centuries. However, over the last half a century, energy companies have been increasingly looking to source geothermal energy at less conventional locations. This involves the drilling of a borehole up to several kilometres deep, where the rocks are around 200°C, and injecting water and sand at high pressure. This creates fractures in the rocks, which increases their permeability and produces a reservoir of hot water that can be extracted via a second borehole. This water is then used to generate electricity.

In recent years, this process has been modified to incorporate enhanced geothermal systems (EGS). This development was only made possible by applying fracking techniques used in the oil and gas industry. Energy companies have discovered better ways to fracture rock and drill horizontally, even in high-temperature environments. This advancement has been supported by billions in government funding in the U.S. and several other countries around the globe.

This November, in the U.S., two major geothermal bills passed in the House, which is expected to clear the way for a clean energy drilling boom. The CLEAN Act and HEATS Act remove many of the federal permitting regulations that are currently required to drill for geothermal power plants. The bills saw wide support from both Republicans and Democrats and will now go to the Senate for approval.

The Department of Energy (DoE) has pumped billions into research and development in geothermal energy in recent years. It predicts that $25 billion in near-term geothermal investment could spur greater innovation that could lead to millions of homes being powered by the clean energy source. Most U.S. geothermal resources are located on federal land in the west of the country. The CLEAN Act would require the Department of the Interior to hold an annual lease auction for geothermal drilling.

A week before the passing of the two acts, California passed the HEATS Act, which exempts new geothermal wells from the current federal permitting laws, so long as less than half of their footprint is on federal land. Congresswoman Young Kim argued in favour of the bill, stating, “While geothermal uses ”a similar extraction process to that of oil and gas” to exploit a form of clean energy, it faces more stringent permitting requirements than the oil and gas sector does.”

Progress is also being seen in Western Europe, following the backing of a strategy to boost the region’s geothermal energy output by EU lawmakers. This is expected to make way for the development of geothermal projects in geologic basins in the Netherlands, western Germany, and Belgium. In the EU, geothermal energy contributes just 0.2 percent of electricity generation at present, lower than the world average of 0.5 percent.

In 2023, 50 geothermal power plants were under various stages of development across Europe. Regulatory uncertainties at the EU level have been blamed for discouraging greater private investment in the sector in the past.

In November, Germany broke ground on the Laufzorn II geothermal heating plant in Bavaria. The Federal Ministry of Economics is investing almost $65 million in the project and the municipality will invest an additional $158 million. Germany has been a leader in geothermal energy in recent years, alongside Turkey, Italy, France, and Croatia. Europe also has several emerging markets that are beginning to tap into the energy source, including Spain and Greece.

Several countries across Asia are also looking to expand their geothermal resources. The Philippines, Japan, China, Taiwan, and South Korea are some of the countries expanding their geothermal markets. China is the world's fastest-growing geothermal heat market, seeing a CAGR of over 21 percent between 2015 and 2019 and reaching 14.2 GW of capacity in 2019. The China Petroleum & Chemical Corporation (Sinopec) reported an increase in geothermal heating capacity of 15 percent from 2023 to 2024.


Meanwhile, Indonesia is adding 90 MW of installed renewable energy capacity to its grid, with three geothermal power plants expected to commence operations by the end of the year. Eniya Listiani Dewi, the director general of Renewable Energy and Energy Conservation at the Ministry of Energy and Mineral Resources, stated, “We’ve seen increasing geothermal adoption in the last 10 years… We hope it will continue to increase more significantly.”

By Felicity Bradstock for Oilprice.com