Advances in oil and gas drilling have cut costs for a form of clean power that could help replace fossil fuels, according to the Department of Energy.
Now the agency is going all in on geothermal energy, which uses heat from deep within the Earth to produce largely pollution-free electricity.
The agency projects that geothermal could supply the energy equivalent of 4 million households by 2030 — and that its investment could help achieve “liftoff” for an industry that could be a core bulwark of the power sector in coming decades.
Geothermal energy excites the power sector because it offers a means of getting on-demand energy without heating the planet — and without major technological advancement.
That gives geothermal a big advantage over other forms of “baseload” clean energy, most of which will rely on significant technological advances — or in the case of nuclear, huge amounts of money — to reach deployment.
By 2050, the Department of Energy hopes to have installed between 90 gigawatts and 300 gigawatts of geothermal power — enough to power between 80 million and 260 million homes.
And even this may be an understatement, as Jigar Shah, director of the department’s Loan Programs Office, told The Hill at CERAWeek by S&P Global, a conference in Houston sometimes described as “the Super Bowl of energy.”
“The numbers could be quite a bit larger,” Shah said. Part of the Department of Energy’s 2030 goal is to get the cost of next-generation geothermal electricity to $70 per megawatt-hour by the end of the decade — down from a current level of about $450 per megawatt-hour.
That’s part of a broader departmental “earthshot” initiative that seeks to cut the price to $45 per megawatt-hour by 2035, or in just more than a decade — an endeavor that a Monday report by the department estimated could ultimately be worth at least $250 billion to investors.
“If you can get 24/7 clean, firm power at anything close to that price — I think the demand will be huge,” Shah told The HIll.
“And that’s the thing about technology: As it gets better and better, the market size gets bigger and bigger.”
Next-generation geothermal energy also marks a rare point of convergence between renewables and the oil and gas industry — a virtually zero-carbon form of power production that relies on the ability to map and accurately drill beneath the earth.
Exxon CEO Darren Woods, for example, told CERAWeek attendees that while the company wasn’t currently invested in geothermal, “we’re keeping a very close eye on it, recognizing there is a very strong alignment and synergies with what we already know how to do.” Chevron’s CEO Mike Wirth, meanwhile, promoted geothermal pilots his company is operating in Japan and California.
It’s also a form of nearly zero-emission energy that has managed to escape the extreme political polarization that now hampers right-wing support for wind and solar. Last week, a bipartisan group of Western senators announced the Geothermal Energy Optimization Act, which would extend Bush-era legislation that makes it easier to drill for oil to reduce the need for permits for geothermal wells.
And in December 2020, a divided Congress under the Trump administration passed the Energy Act, one provision of which allowed oil and gas companies to convert their old fossil fuel wells to geothermal ones without applying for new permits.
Energy Secretary Jennifer Granholm promoted that policy change in Monday remarks at CERAWeek. “Many of you can repurpose your permits and use your existing workforce, literally today, to build new geothermal projects,” Granholm told the conference, which is typically dominated by the fossil fuel industry.
“The oil and gas industry is incredibly well-positioned to lead in geothermal,” she added.
In concept, geothermal energy works much like any other form of on-demand thermal power, whether it be coal, fuel oil, natural gas,…
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