Geothermal is estimated to be near a “breakthrough” that could accumulate US$1 trillion in investments by 2050, according to a recent article published by Wood Mackenzie.
While conventional geothermal is restricted to niche geologies that have a high thermal gradient at a shallow depth, Next-Generation Geothermal has the capacity to be implemented across the planet. In Eavor’s case, Eavor-Loop™ systems can extract energy from zero permeability rock with an average thermal gradient, which is more common to find in subterranean landscapes.
This is the basis the article uses to argue that Next-Generation Geothermal is the “holy grail” in the race to decarbonize energy grids. Eavor’s first commercial project, which is currently being constructed in Geretsried, was highlighted as one of the projects that could signal this breakthrough. The project is projected to generate 60 MWth of heat and 8.2 MW of power by 2026, and celebrated its inauguration in August 2023.
In addition to technological advancements, innovations in drilling technologies are also driving progress in the geothermal sector. These advancements aim to reduce well costs, which is a significant component of geothermal project capital expenditure. A major aspect that is propelling these projects are global energy industry giants, including BP, Chevron, and Equinor. The article states that these companies continue to recognize the potential for diversification and sustainable energy production to not only provide clean energy, but also leverage existing expertise in subsurface exploration.
Success in these endeavors could lead to widespread deployment on a global scale, offering a competitive alternative to energy sources like nuclear power and hydrogen.
With a projected decrease in the levelized cost of electricity (LCOE) from approximately $200/MWh to $75/MWh by 2050, Next-Generation Geothermal will become a significant player in the transition to sustainable energy. Moreover, the growth of the geothermal industry presents an opportunity to attract new talent to the energy sector, ensuring a smooth transition away from fossil fuels toward cleaner alternatives.
