Of all the alternative energy sources being developed today, geothermal may be one of the least well known. As of 2011, it accounted for less than one percent of global electricity production.
Despite the relative obscurity of geothermal, a quiet revolution is occurring in the industry. A report released in April by the Geothermal Energy Association states that the geothermal industry grew 4-5% in 2013 alone. Most of the recent growth by volume has been in the United States, Indonesia, Turkey, and Chile, with fifty to one hundred projects under development in each country. The report predicts that, by 2018, global geothermal production will increase from 12,000 MW to 13,500 MW.
What is driving this trend? In an era where cheap unconventional hydrocarbons are driving down energy prices, how can renewable energy sources compete?
Unlike most alternative energy sources, geothermal has been helped, not hindered, by the fracking boom. There are two reasons for this.
The first has to do with geothermal resource exploration. Almost half the budget of a typical geothermal project goes towards drilling wells deep into the ground for the circulation and heating of water. Since about 30% of the wells don’t intersect a viable geothermal resource, these costs have historically limited geothermal development. If geothermal developers could increase the success rate on their wells, production costs would be decreased, making geothermal more competitive.
The development of unconventional hydrocarbons has opened up new opportunities for geothermal data acquisition. In some locations, the proliferation of wells has allowed geologists to build more accurate models of the subsurface and the fluids circulating within it. These models can be used to increase the success rate of new wells.
A second reason that the fracking boom has advanced the cause of geothermal is that fracking techniques themselves have matured significantly in recent years. The techniques used to hydraulically fracture tight shales are often used to prepare a site for geothermal energy production.
Some proponents of geothermal energy have envisioned repurposing oil and gas wells for geothermal at the end of their producing lives. Since drilling the wells makes up such a large portion of the investment in a new geothermal plant, this could reduce costs significantly, if environmental concerns could be dealt with effectively.
The boom in geothermal electricity production has centered on areas where hot rocks are relatively close to the surface (such as the Pacific Ring of Fire and other tectonically active regions). But a quieter boom is occurring in places traditionally thought of as stable and inactive, including Germany. In these places, cooler geothermal resources are being used to heat and cool buildings. In the future, geothermal may be as widespread as traditional air conditioning and heating systems are today.
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