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Geothermal Power, Business and Industry Trends Analysis

Like hydroelectric power, geothermal energy can be extremely reliable and cost-effective, and is one of the cleanest possible sources of renewable power.  It is a well-established technology that uses several different methods to harvest heat from underneath the earth’s surface.  Potential sites for traditional geothermal generation include areas with volcanic activity, tectonic shifting, major hot springs or geysers, where the earth’s heat is very near the surface.  In the United States, most geothermal resources are located in the western portion of the country, along the numerous fault lines on the western seaboard and in the Rocky Mountains.  The U.S. is a world leader in geothermal energy, with roughly 210 trillion Btus of potential capacity.  (Nonetheless, geothermal generation is only 2% of renewable electric power consumption in the U.S.)  In many parts of the U.S., smaller geothermal resources are used to heat buildings or to provide commercial quantities of hot water but are not used to generate electricity.
According to the U.S. Department of Energy, operating and maintenance costs for geothermal plants are extremely low, ranking from one to three cents per kilowatt hour.  Such plants are much more reliable than renewable power based on wind or solar and can operate at about 90% availability.
However, there is a major obstacle facing significant expansion of geothermal drilling.  The possibility of earthquake activity near test wells has led to cancelled projects in the U.S and in Europe.  Observers are concerned that the drilling is causing dangerous reactions underground.  The cancelled projects typically used technology based on fracturing underground rock, enabling water to penetrate the rock.  The water turns to steam, which is then captured to turn a turbine-driven generator.  It is possible that the fracturing process can result in tremors.  This issue may be difficult to impossible to resolve, and much further study will be required. 
New technologies may be required in order to safely drill, particularly if the site is anywhere near a highly populated area.  After technical problems forced AltaRock Energy, Inc. to shut down operations at a location called the Geysers in Northern California, the DOE investigated.  The result was the imposition of new safeguards, including the use of ground-motion sensors, a federally approved plan for shut down in the event of earthquakes and the filing of estimates by the drilling company of expected earthquake activity for review by outside experts.
There are two predominant techniques for traditional geothermal electricity generation, depending on the type of heat resource:  flash steam and binary cycle.  High temperature locations can be tapped directly, using steam coming out of the ground to drive a turbine in a technique known as flash steam generation.  This is the most common plant type in use.  Where lower-temperature geothermal sources are tapped, hot water is used to heat another liquid with a lower boiling point (such as isobutene or isopentane), which then drives the turbine.  This technique is known as binary cycle generation.  The drawback of binary cycle generation is that it is much less efficient than flash generation.  Engineers have also begun combining flash and binary generation, which together increase the efficiency of a plant.  Binary cycle technology enables the construction of a plant at a geothermal water source that is substantially cooler than that used in flash steam generation.
Technology developed at Los Alamos National Labs (LANL) in New Mexico may create new opportunities for the utilization of geothermal plants.  In a 26-year-long project, LANL was able to develop the tools necessary to harvest heat from almost anywhere on earth.  Called Hot Dry Rock Geothermal Energy Technology (HDR), the technique drills holes into the ground until they reach rock that is suitably hot at about 15,000 feet.  (Such a system is also referred to as an Enhanced Geothermal System or EGS.)  Then, pipes are installed in a closed loop.  Water is pumped down one pipe, where it is heated to appropriately high temperatures.  The resulting hot water shoots up to the surface.  This is used to create steam that drives a turbine to power an electric generating plant.  (This may be either a flash steam or binary cycle plant.)  As the water cools, it is pumped back into the ground.  ReNu Energy, formerly Geodynamics, Ltd.,, based in Milton, Queensland, Australia, has high hopes for this technology.  It has built plants in New South Wales, Tasmania and elsewhere. 
In the U.S., AltaRock Energy, Inc. ( is using a next generation version of EGS called SuperHot Rock (SHR) at its dormant Newberry volcano site in Oregon.  Water is circulated to mine heat of 400 degrees Celsius (675 degrees Fahrenheit) in rock deep in the Earth’s crust and bring it to the surface in the form of superheated steam.  The steam drives a turbine to generate electricity.  The company believes its Newberry SHR Project could eventually generate up to 10 gigawatts of electricity, or enough to power 3 million homes.
Binary cycle generation makes it possible to produce power from hot springs that were previously thought too cool to efficiently use for geothermal efforts.  The Chena hot springs in Alaska average about 109 degrees Fahrenheit, but the springs’ owners and engineering conglomerate Raytheon Technologies (formerly United Technologies) have devised a method using a refrigerant called R134a (tetrafluoroethane) to drive turbines.  Water from the hot springs is used to heat R134a, which has a relatively low boiling point.  A gas similar to steam is produced, which drives the turbines.  Cooler temperatures yield smaller amounts of gas, so the designers of the Chena plant compensated by slashing operating costs.  Mass-produced air conditioner parts were substituted for standard geothermal components, a scheme that might be adopted by geothermal plants the world over.
Yet another geothermal technology is that developed by Bob Potter of Potter Drilling and Jefferson Tester of MIT called spallation.  Superheated steam hits rock, causing crystalline grains to expand, thereby causing tiny fractures.  Small particles, called spalls, break off as the grains expand.  The technology effectively uses steam as a kind of drill to melt rock.  It is similar to air spallation drilling previously used for mining ore.
Iceland is a respected leader in geothermal and hydroelectric power.  Even though the country's capacity for both is less than that of some other countries, the low-population island nation of Iceland supplies more than 50% of its energy needs with geothermal energy and another 17% by hydroelectric.  Generating such a massive amount of energy with these sources is made possible by the island nation’s incredible natural resources but was brought to bear by a concentrated effort by the government and the people.
The Iceland Deep Drilling Project (IDDP), funded by a consortium of three Icelandic energy companies, hopes to tap extremely hot steam in an existing geothermal well at depths of up to 2.5 miles, which is close enough to the Earth’s layer of magma to produce steam of over 1,100 degrees Fahrenheit.  The drilling and collecting equipment necessary is more expensive than standard geothermal machinery, due to the higher pressures and temperatures found at great depths.  However, proponents of the project believe that the extra costs (which might double or triple) will be easily regained because the amount of electricity produced is expected to multiply by as much as 10 times.  (For additional information, see
The next big thing in geothermal technology may be to utilize fracking to vastly increase access to heat in the Earth’s crust.  By drilling horizontally once an initial heat-seeking depth is achieved, some researchers believe that electricity generation could be enhanced by a factor of one thousand or more.  Startups Geothermix (, Sage Geosystems ( and Fervo Energy ( are working on the technology.
Yet another new technology is “deep geothermal.”  Quaise Energy (, an MIT university spinoff, recently raised $75 million to develop deep geothermal, which extends drilling as far as 12 miles below the Earth’s surface.  Drillers use standard drill bits to a depth of about three miles, and then switch to a gyrotron, a radio-wave-emitting device, to vaporize rocks and increase drilling speed.  Quaise hopes to drill near abandoned coal power plants and convert them to geothermal power, with steam powered turbines capable of generating 300 megawatts of clean electricity.  The cost to repurpose a coal plant in this manner would run about $500 million, which is cheaper than building a new geothermal plant.  In late 2023, Quaise filed a report with the SEC revealing that it had raised $13 million in funding to advance geothermal drilling toward a goal of a total of $25 million.

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