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Trends in geothermal, 16th February 2021 part 1: investment

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On the 16 February 2021, Baseload Capital (an investing firm) hosted its webinar on upcoming trends in the geothermal sector. Its philosophy is to act as a catalyst for green baseload electricity by funding renewable energy projects throughout the world. Currently, the company has subsidiaries in Iceland, Japan and Taiwan, which work with local communities and power companies to permit, build and commission heat power plants.

The first half of this two-part article will focus on investment in geothermal and what the future is holding for finance in energy. Geothermal represents an interesting case study for financing carbon neutrality. However, with only 2% of the global energy market, geothermal is lacking behind other energies despite its upsides: available 24/7, 365 days a year independently of weather, outside temperature or time of the day. In addition, it can serve as a baseload power (minimum amount of electric power needed to be supplied to the electrical grid at any given time) for any renewable energy mix. Day to day trends of power usage need to be met by power plants, however it is not optimal for power plants to produce the maximum needed power at all times. Geothermal power plants have average availabilities of 90% or higher, compared to about 75% for coal plants. Geothermal power is homegrown, reducing our dependence on foreign oil. So, if geothermal is so convenient why is it lagging behind other energy sources?

Geothermal suffers from several misconceptions that are often afflicting new investment opportunities. First, the Kodak core business model is a good example of neglecting new emerging trends for already established goods and services. We all know what happened to Kodak and printed photos. But the question is: would we really have acted differently if we had been in their shoes? Many examples since then seem to indicate that we tend to misjudge the potential of emerging technologies.

Second, connecting dots. Some technologies are on the shelf because their fullest potential can only be met by combining them with other technologies. When identifying 2 or more trends with inherent potential, they can create a whole new concept sparking new business opportunities in a market. Going back to geothermal, this concept is incredibly relevant. On one hand, it is a fact that energy demand is rising. On the other, the energy industry realizes that power production (heat and electricity) is too centralised and thus could face problems to reach the widespread growing demand. In parallel, it has been apparent that geothermal energy opened new opportunities for building medium and low-grade power plants for heat able to meet local demand that previously did not make sense financially. An example of this is Iceland: local communities have a growing demand for clean energy yet most of electricity production is generated around the capital Reykjavik. These conditions are perfect for local distributed geothermal power to supply local communities with affordable, clean energy based on low temperature heat.

Third, discovering new trends. Trends create momentum in a market when many people are affected by it. A large, invested community increases the likelihood of a successful emerging trend. In essence, it boils that to marketing: capturing the imagination of a targeted community with business opportunities or services that can benefit them or society as a whole. For instance, geothermal tends to be the fields of experts, scientists and selected groups of individuals. Whilst, this group produces a lot of positive ideas, disruptive technologies and discussions, outcomes tend to circulate into the same circle, depriving the overall field of a greater reach. Hence, these trends are de facto on a shelf waiting to be discovered by the wide public. Incidentally, being on the shelf does not allow one trend to find an application that would have a positive snowball effect on society.

Therefore, nowadays it is likely that new trends and investments in geothermal will focus on meeting the energy demands of local communities whilst being integrated to the economical ecosystem. A geothermal power plant could provide district heating for neighbouring homes, heat for local organic greenhouses, hot water for the local swimming pool or spa and countless other solutions benefiting communities. This comprehensive approach does not only benefit investors but has lasting positive impacts on future generations. Said impact could also be the added value needed to increase the social acceptance of geothermal. By integrating communities, businesses and private citizens in their local energy ecosystem a lasting relationship between energy producers and customers can be achieved.

For more information on citizens’ empowerment in geothermal check out the CROWDTHERMAL website: https://www.crowdthermalproject.eu/!

LPRC @ Webinar – Recent installations, implications for the future of geothermal in Turkey

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On Friday 29, Gauthier Quinonez (LPRC) attended the latest IGN online webinar on geothermal energy organized by Enerchange (PR and Event Agency focusing on renewable energy) and Think GeoEnergy (leading newspaper on geothermal). The event focused on the particular case of Turkish geothermal, its characteristics and future.

Top that occasion, the board invited Gad Shoshan (chairman at the board at the Israel-Turkey business council and chamber of commerce and managing director at Ormat Inc.) to discuss the current state of play. Ormat is a global renewable energy provider based in Reno (Nevada). The company has the particularity to be verse in multiple renewable energy sources (geothermal and recovered energy) as well as energy storage. In addition, with regards to geothermal, they managed to vertically integrate all phases of geothermal (Development, exploration, drilling, engineering, manufacturing, construction, operation and stakeholder management).

First of all, even though Turkey has become famous of over the past decade for its rapid and sustained development of geothermal, the country is still highly reliant on fossil fuels for domestic electricity production (Fig. 1). However, 3 caveats shall be made on this current status. First, all but one active Turkish power plants opened after 2006, highlighting the impressive capacity to adapt to new resources. Second, Turkish geothermal potential hasn’t been reached yet, indicating a possible growing share of geothermal electricity in the Turkish market for the future. Third, most fossil fuel consumption is linked to import from the East, highlighting a threat in local energy security and Turkish authorities made no secret about the need for a change in this matter.

Figure 1: Turkey’s electricity generation per resource

As per January 2021, geothermal energy’s output in Turkey is 1.6 GW produced by 77 power plants (with a mix of Organic Rankine Cycle[1] and flash). Although 77 power plants may seem like a high number for the country it does not meet the high demand of 84 million Turkish and does not cover the huge local geothermal potential. Figure 2 shows current knowledge of Turkish geothermal potential (red areas) and locations of operational plants (ref triangles). Based on the map, it can be concluded that Central and Eastern Anatolia are underexploited vis-à-vis their potential. In addition, there is still a lack of exploration and research to determine the true potential of the Mediterranean and Black Sea regions.

Figure 2: Turkish geothermal potential

All and all, the Turkish geothermal case study proves that the technology can be developed quickly and efficiently (76 power plants in under 15 years) despite a somewhat shaken economy (current devaluation of YLT and high unemployment). Lessons can be learned globally from the Turkish case.

[1] Organic Rankine Cycle is a technology that convert low-temperature heat sources into a mechanical energy, and it can be used to produce electrical energy in a closed system.

Recap of the “Focus on Geothermal – Energy for the Weekend” Webinar

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How can deep geothermal be green whilst releasing CO2 emissions into the atmosphere?

The figure below seems to indicate that deep geothermal energy is not as green as it could be assumed, in some instances reaching levels of emissions comparable to fossil fuels energy sources (gas, coal and oil). However, this graph is a simplification of what is really at stakes. First of all, geothermal emissions here are presented as life-long emission meaning resulting from exploration, drilling, building the plant, manufacturing of all the parts, operation and decommission. All but stages but operation are CO2 emissions that currently cannot be avoided because of the reliance on fossil-fuel for manufacturing any part and the value chain in general.

With regards to CO2 emissions during geothermal operation one might wonder why an energy source that does not burn fossil fuel nor carbon content still produces GHG emissions. And this is due to the CO2 content into the water reservoir from which heat is extracted. Think about a bottle of sparkling water when the lid is on, there is no bubble rising to the surface of the water and therefore no gas can expand, in short: CO2 is dissolute in the water, the system is sealed. Once you open the bottle, you witness this characteristic “pop” (due to expanding gases) followed by a rush of CO2 bubbles to the surface that then make their way to the atmosphere: the system is open.

Deep geothermal reservoirs, which are polluting, function in the very same manner as a bottle of sparkling water (albeit at much higher pressure). Drilling to a geothermal reservoir in order to harvest its heat means opening a closed system. The presence of CO2 in deep geothermal reservoirs is a naturally occurring phenomenon linked to Earth magmatic events and decay of any living organism.

Luckily, geothermal CO2 emissions during operation can be mitigated, as Hörmann Grupp presented, there are ways to make a geothermal operation 100% green. Their experiments were based on a pre-existing body of literature on carbon capture. During their tests, they further confirmed that it is possible to capture CO2 released from the brine and reinject it in the geothermal reservoir so that it never pollutes the atmosphere. Furthermore, thanks to the high pressure put on the CO2, it dissolves into the water thus not perturbing the heat exchange critical for any geothermal plant.

Experiments and new technologies are improving geothermal each day making the energy greener and more reliable than ever. It is really a breakthrough that will untroubledly help trigger a massive growth of geothermal in the energy market worldwide.

LPRC participates at “Geo-Energy Operations: Opportunities and Challenges” webinar

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On the 16 December, The Welding Institute hosted its webinar titled “Geo-Energy Operations: Opportunities and Challenges Confirmation”. TWI is a global leader in technology engineering providing research and consultancy to its members.

The session was focused on one research question: “Why is geothermal still the hidden champion of energy?”. Geothermal has a very high potential on Earth. As a matter of fact, 99.6% of the planet is above 500 degrees Celsius, which begs the questions, why relying so much on oil and gas?

In addition, geothermal is a baseload power. Baseload power refers to the minimum amount of electric power needed to be supplied to the electrical grid at any given time. Day to day trends of power usage need to be met by power plants, however it is not optimal for power plants to produce the maximum needed power at all times. Earth’s warmth is not dependent on the time of the day, season or weather, it stays warm and will continue to stay warm for billions of years.

On top of potential and availability, recent developments in technology and general economies of scale have pushed geothermal competitiveness to the forefront of the energy race. Figure 1 showcases the unsubsidized cost of alternative and conventional energy sources. Two conclusions can be drawn from this graph; first, being unsubsidized levelized costs; second, although more competitive, biomass and wind have their drawbacks.

Conventional and alternative energy costs.

The ambitious vision developed for geothermal is challenged by a slow growth and implementation of geothermal worldwide. The International Geothermal Association  highlights that geothermal Growth rate of geothermal is only 3%, which is not enough to meet UNDP (United Nation Program for Development) Objective 7 – focusing on clean and affordable energy for all. To reach this global objective, the annual growth rate of geothermal (electricity, heating and cooling) needs to be 9 to 12%. Market studies suggest that the main hurdles to overcome include initial investment and public perception. Realistically, these two notions boil down to one simple concept: trust.

Investment relates to a trust into geothermal to yield positive return on investment while maximising the cost management of operations. Academic studies suggest that trust in geothermal can be raised via sharing best practices and technical development leading to cost reduction. This combination of actions enabled a noticeable growth in solar and wind power generation over the past decade.

Finally, trust is also capital when discussing public perception of geothermal energy. Best practices across the globe demonstrate that successful geothermal projects are synonymous with open and trustworthy communication with local communities. In the words of Marit Brommer, Executive Director at IGA: “both geothermal experts and non-experts shall discuss with the public about geothermal. The public shall always be engaged openly and with non-technical jargon to ensure clear communication and more importantly: dialogue. These open discussions will not only benefit the geothermal world but society as a whole.”.

Will 2021 bring new opportunities for geothermal energy?

Shallow Geothermal Days 2020: Day 3: Minutes

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On the 11th December 2020 took place the third and final day of the Shallow Geothermal Days 2020. On  opportunity the focus shifted from the perks of shallow geothermal and the European potential to the incorporation of geothermal energy in the future of European Carbon neutrality.

It is no secret that the European Union is massively investing in renewable energy sources and energy storage to decarbonize its economy. The session once again proved the necessity of geothermal energy in the upcoming carbon neutral market. Not only geothermal has a huge green and economically viable potential but it also shows potential in disruptive technologies such as combined renewables sources and thermal storage. Combined renewables sources consist of two or more renewable energy sources used together to provide increased system efficiency as well as greater balance in energy supply. For example, geothermal could provide baseload energy whilst alternating energy sources could provide additional power at pick demand time.

Main themes and subtopics of the overall CHPM concept: exploration, development, operation, market. CHPM 2030 was one of the innovative projects funded under the Horizon 2020 programme where LPRC participated.

It is now important for the European Commission and its institutions to act on climate and to act quickly. To that end, the Innovation Fund has been launched to fund a number of projects to help with changing the energy panaroma. A total of 58 out of 322 proposals submitted (18%) on the 2nd December for Large-Scale projects under the Innovation Fund were geothermal energy-related (mostly heating and cooling and thermal storage). Whilst this high number of geothermal projects does not reflect the final outcome of the bid, it however shows a growing interest in the technology on the European scene.

Will Europe be able to meet its energy-related challenges for the upcoming years?

Shallow Geothermal Days 2020: Day 1: Minutes

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On Friday, 4th December 2020, the European Geothermal Energy Council (EGEC) held the first day of the Shallow Geothermal Energy Days 2020. LPRC participatedin the event in light of the CROWDTHERMAL project.

The event focused solely on geothermal at shallow depth, specifically heat pumps. A geothermal heat pump (GHP) or ground source heat pump (GSHP) is a central heating and/or cooling system that transfers heat to or from the ground. The whole event highlighted the role of shallow geothermal energy within the scope of the climate transition and the EU Carbon neutrality. EGEC acknowledged that geothermal energy is not the silver bullet of the climate transition, but it has an important role to play in the next 4 decades given its inherent capabilities and the EU’s potential for low enthalpy geothermal.

Geothermal has a bright future in Europe for 2 main reasons. First, the technology is green and highly competitive when it comes to space (see the figure). Second, geothermal can follow the fluctuating demand of energy within its grid thus disabling reliance on supplemental electricity further increasing the energy efficiency of buildings whilst decreasing their operating costs. This has the spillover effect to fight energy poverty. Energy poverty is a particularly urgent matter at a time where most people have to remain at home for longer hours per day due to the ongoing COVID-19 crisis. It is important because a Just Energy Transition is an inclusive one.

Webinar: Geothermal lithium and sustainable battery production in the EU

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On 24 November 2020, Luís Lopes and Gauthier Quinonez participated in the “Geothermal lithium and sustainable battery production in the EU” Webinar hosted by EGEC Geothermal. Lithium-ion batteries are vital to accelerating the decarbonisation of transport and better integrating variable renewable energies into electricity grids. However, Europe´s balance regarding lithium´s import is negative. As such, the ambitious EU climate goals may be in jeopardy when faced with the reality of the import market coupled with the rapid increase in global demand for lithium. The next couple years in raw materials policy could prove crucial for the EU long lasting pledge toward climate neutrality.

Whilst, Europe has a yet untapped lithium potential in its sub-soil, the answer to the growing demand may not come from traditional mining but from geothermal power generation. Studies suggest that Europe´s potential for geothermal is high – geothermal power could become a baseload power generation for heat and electricity on the continent.

With the advent of electric vehicles, among other greener options, lithium is becoming ever more important.

Now, recovery of mineral raw materials could be achieved thanks to geothermal too. Geothermal water (or brine) has a high concentration of minerals. Current exploratory techniques enable to target geothermal reservoirs with high flow of water and high concentration of lithium in a geothermal reservoir. Said lithium-rich brine can be taped to produce heat and/or electricity, while, in addition, minerals such as lithium can be extracted from the brine in surface installations before being reinjected into the geothermal reservoir to be-reused, thus providing a virtually infinite flow of heat and lithium. Horst Kreuter (Co-Founder & Executive-Director, Vulcan Energy Resources Limited) and James Frith (Head of Energy Storage, Bloomberg NEF) indicated that a geothermal plant combining heat and mineral extraction would have a negative emission potential during its lifetime thanks to the combination of green carbon-neutral geothermal power and the positive impact on circular that lithium can have. The future of lithium EU strategy and geothermal potential is bounded to public awareness and cohesive action at EU level noted Claudia Gamon (MEP, Renew Europe).

From LPRC´s point of view, this geothermal lithium concept is yet another positive note on the company´s past and ongoing projects focused on geothermal. LPRC was involved in the CHPM2030 project from its creation in 2016 to its closure in 2019. More recently, LPRC has started its role as WP leader for CROWDTHERMAL which aims at empowering EU citizens in geothermal. Both projects have ties with geothermal lithium and EU just transition, proving that LPRC is always at the forefront of innovation and market trends.Cr

CROWDTHERMAL meeting, 15-17 September, online

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From the 15th to the 17th September 2020, the CROWDTHERMAL consortium held three successive meetings to prepare the start of the second year of the project. These meetings were successively a General Assembly (15th September), the Advisory Board meeting (16th September) and finally the 3rd Consortium meeting (17th September). The CROWDTHERMAL project aims to empower the European public to directly participate in the development of geothermal projects with the help of alternative financing schemes (crowdfunding) and social engagement tools.

During the General Assembly, the CROWDTHERMAL consortium discussed the progress made during the first year of the project and each partner presented the summary of the work performed in its respective tasks. In the first year of the project, La Palma Research Centre had a dual role in the project. First and foremost, it was part of the Communication and Dissemination Work Package together with the European Federation of Geologists. LPRC led the communication strategy on social media including two successful campaigns: the first showcasing the presentation video of the project on YouTube, while the second highlighted the best practises regarding alternative funding schemes for energy projects across Europe. Second, LPRC led the preparations for CROWDTHERMAL Work Package 4 “Integrated Deployment schemes“ starting November 2020. This Work Package aims at creating a social-media powered platform that will support the deployment of integrated development schemes for geothermal energy utilising alternative finance and community engagement tools. With regards to this Work Package, LPRC started the work on the CROWDTHERMAL sustainability plans that are aimed to facilitate the efficient market uptake of results and the sustainability of the project after the EC-funded period.

For the Advisory Board meeting, a group of experts discussed the findings and issues encountered around the project. The main topic of discussion was centred around the social acceptance of geothermal energy. Based on empirical data provided by the project on geothermal energy around Europe (WP 1, Addressing the bottlenecks of public engagement for community-based geothermal development) and regarding the place of participative finance to geothermal projects (WP 2, Community-based geothermal energy financing principles and WP3, Auxiliary and alternative pathways to risk mitigation), it became apparent that CROWDTHERMAL has indeed the unique opportunity to raise awareness about the potential of geothermal energy for climate change mitigation and to enhance citizen empowerment in energy at the same time. To that end, the project will focus more on educating the public on the advantages of geothermal energy and on the opportunity given to any investor by diverse participative financing schemes.

During the 3rd Consortium meeting, all the partners deliberated on the upcoming actions to be taken in the second year of the project. For this year, LPRC will continue to lead dissemination on social media and increase the volume of campaigns and will also lead the development of the project deployment schemes. The aim is to connect the new approaches brought forward by CROWDTHERMAL with conventional financing, public engagement and risk mitigation schemes and launch a new European mobilisation campaign with the help of social media as well as with the help of targeted conferences, workshops and by mobilising EFG Third Parties and the Altfinator Network (CFH).

Learn more about CROWDTHERMAL on the project´s website (https://www.crowdthermalproject.eu/) and follow the project´s daily activities on social media (Facebook, Twitter, LinkedIn and Instagram) @CROWDTHERMAL_EU.

CROWDTHERMAL e-meeting

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Last week, on the 17 and 18 March, the CROWDTHERMAL partners held their second consortium meeting online due to the events of COVID-19 – the meeting was previously scheduled to be hosted in the Canary Islands. Due to the circumstances the consortium had to adapt and work around the impossibility of a face-to-face meeting.

This CROWDTHERMAL workshop led to outstanding preliminary results particularly for Work Packages 1, 2 and 3, which are currently running.  Work Package 1 focuses on studying the bottlenecks linked to geothermal energy. For that matter, IZES presented its preliminary results including D1.1 “International Review of Public perception studies”. Among the bottlenecks identified were: 1) trust in the technology and 2) perception of risks and legislative background. These results will later on feed into the Social License to Operate (SLO) which is at the centre of the CROWDTHERMAL project. A Social License to Operate refers to the ongoing acceptance of a company or industry’s standard business practices and operating procedures by its employees, stakeholders, and the general public.

Work Package 2 delivered an overview of the best practices in Europe regarding geothermal which will be a crucial document for any upcoming geothermal project mixing geothermal energy and crowdfunding. Work Package 3 unveiled its report on mitigation risks linked to geothermal energy. As pointed out by Work Package 1, risk mitigation is an important step to build trust in the technology and thus having an effective Social License to operate. The results of the questionnaire help to understand and to deal with risk mitigation for all case studies of CROWDTHERMAL (Spain, Iceland and Hungary). In addition, WP3 created a cluster of geothermal stakeholders in order to discuss an analysis for geothermal risk mitigation in the context of alternative financing schemes. The cluster identified a glaring lack of a pan-European exploration risk mitigation scheme.

As for WP4, which La Palma Research Centre leads, the team kickstarted the organisation of a social media powered platform that will support the deployment of integrated development schemes for geothermal energy utilising alternative finance and community engagement tools. Thanks to the synergic approach of the consortium, this platform will be launched in due time early 2021.

Stay tuned for more news regarding the CROWDTHERMAL project!

Geothermal event, Brussels

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On the 4th and 5th of February, the Geothermal community gathered in Brussels to expose the state of the art of geothermal energy in Europe and discuss best practices. On this occasion, La Palma Research Centre and  the CROWDTHERMAL project were present to participate in these discussions. During these events, 3 main topics were discussed.

Firstly, the preliminary results of the GEOENVI project were unveiled. GEOENVI is an European funded project whose aim is to answer environmental concerns in terms of both impacts and risks, by first setting an adapted methodology for assessing environment impacts to the project developers, and by assessing the environmental impacts and risks of geothermal projects operational or in development in Europe. The presentation unveiled the results of on-going work: state of the art and characteristics of geothermal plants in the EU, First draft of Life Cycle Assessment and legislative background on geothermal of GEOENVI´s selected cases study (e.g. Hungary and Italy).

Secondly, the presentation of GEOENVI paved the way to environmental concerns regarding geothermal plants. For that matter, the project partners published their Life Cycle Assessment (LCA), guidelines for geothermal plants. These guidelines will be made public to help monitor all the eventual risk encountered during all four phases of a geothermal project (e.g. exploration, drilling, operation and decommission) and tools to mitigate these risks to render any geothermal operation context as safe as possible both for the environment and surrounding communities.

Finally, EGEC monitored a group discussion on the influence of the public regarding geothermal plants in the EU.

Based on an Italian case study, public acceptance towards geothermal plants has the potential to save or kill geothermal projects. Thanks to the insight of Croatian and Hungarian experts, the group reached a consensus: in order to be successful, any geothermal project has to communicate in a transparent manner with local population, show the benefits of geothermal over other sources of energy and the direct perks of having district heating thanks to geothermal. The group discussion also concluded that crowdfunding schemes should be explored to incentive local population to have a direct impact on energy production (being either electricity or heating and cooling). This latter remark is particularly relevant for the CROWDTHERMAL project. This Horizon2020 project aims to empower the European public to directly participate in the development of geothermal power projects with the help of alternative financing schemes (e.g. crowdfunding) and social engagement tools.

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