Can new drill tech unleash the potential of geothermal energy?

The next generation of geothermal energy technology — called enhanced or engineered geothermal, or EGS for short — has long been just out of reach in a commercial sense. It’s been too expensive, mostly due to the high cost of drilling new enhanced geothermal wells into hard, hot rocks more than 10,000 feet below the earth’s surface.

According to next-gen geothermal startup AltaRock, though, a new type of drilling technology could help solve the problem of expensive drilling. AltaRock CEO Aaron Mandell told me that the company has entered into a partnership and created a joint venture with a company called On Energy, which is the U.S. supplier of Korean drilling company Hanjin D&B. AltaRock and On Energy plan to use a new type of “hammer” drilling tech that could help commercialize enhanced geothermal energy.

The site at Newberry, where AltaRock stimulated cracks in multiple zones. Image courtesy of the Bureau of Land Management.

The site at Newberry where AltaRock stimulated cracks in multiple zones.

The new tech is called a “water hammer” drilling machine, and it pulverizes rock by rapidly hammering down on the rock surface with brute force and creating huge vibrations. This is different than the more commonly used drilling that employs a rotary bit (rotating cones) to grind down rock. When it comes to hard rock surfaces, rotary drilling can be really slow, the bit wears out quickly and needs to be replaced, and it’s been difficult to achieve the depths of more than 10,000 feet that EGS needs. AltaRock has faced iproblems with drilling through hard rocks at its sites in the past.

Hammer drilling, by contrast, can more quickly and more economically achieve these deep drilling depths. The problem with hammer drilling in the past, though, has been that companies have mostly used air to deliver pressure to the bits. That has required extremely large air compressors and pushed up the price of hammer drilling.

Hanjin D&B’s water hammer drill uses water (hence the name) to deliver pressure to the drill bit, and the companies say this innovation means the water hammer drill can deliver wells of more than 12,000 feet, at ten times the speed of conventional drilling, and up to 50 percent of the cost. This video shows the water hammer drill in action.

We’ll have to wait and see if the water hammer can provide enough of a savings breakthrough to help AltaRock’s next-gen geothermal tech take off. In the past, many companies claimed drilling breakthroughs that turned out to be largely incremental. AltaRock’s Mandell told me that the company will be using the water hammer drill at its own site at the Newberry Volcano in Oregon. It could be one of the only new (“greenfield”) commercial EGS sites in the world.

It’s been a long, hard road for AltaRock over the past seven years. Founded in 2007 during the wave of excitement around EGS, the company was funded by Khosla Ventures, Google.org, Advanced Technology Ventures, Kleiner Perkins and Paul Allen’s Vulcan Capital.

AltaRock was able to build a demonstration project at Newberry, funded by $21.4 million from the DOE’s stimulus program, and a year ago the company showed it had created multiple, stimulated geothermal zones from the single drilled well at Newberry. That was a proof of concept that rock permeability can be controlled and “engineered” using stimulations. But the next step at Newberry has been to find more financing to drill another well at the site and get the power plant up and running.

The Newberry Geothermal site, recently stimulated by AltaRock. Image courtesy of the Bureau of Land Management.

The Newberry Geothermal site, recently stimulated by AltaRock

In the meantime, AltaRock has started to concentrate on using its EGS tech to improve, or stimulate, under-performing older geothermal wells. Traditional geothermal power plants tap into the somewhat rare earthly occurrence of hot underground rocks meeting significant water or steam, which can be pushed to the surface and then recirculated to keep a plant running.

These older wells commonly lose energy capacity over the years, and operators have traditionally done things like injecting waste water into sites to boost capacity. AltaRock uses other more technologically advanced techniques to boost capacity of older wells. For example, it injects them with particles of a material that can temporarily plug parts of the well and enable many more tiny cracks to form within the reservoir.

It took a long time for AltaRock to get to where it is today, but the company is nothing if not innovative. In a year that a new type of financing structure for solar, called solar yieldcos, became popular, AltaRock decided to launch its own version of the yieldco for geothermal. And when the company faced issues with communities around earthquakes, and slow drilling at new sites, the team routed around those challenges, too.

The large geothermal companies don’t really take EGS that seriously at this point — it’s a small, nascent market — so AltaRock continues to write the playbook on new technologies, new partnerships and new financing models that could one day make EGS a reality.

Feds approve three big clean power projects in the west

The newly minted Interior Secretary Sally Jewell on Monday announced the first approval of three renewable energy projects on public lands under her watch: two solar farms and one geothermal power plant in western United States.

Jewell, who was the CEO of sports equipment retailer REI before becoming the head of the Interior Department in April, is carrying on a program that started by her predecessor, Ken Salazar, who oversaw some massive planning efforts to figure out appropriate places to locate renewable energy generation projects.

One of the efforts created a solar energy development road map last year that identified 285,000 suitable acres in six western states overseen by the Bureau of Land Management. The road map, called Solar Programmatic Environmental Impact Statement, not only pinpoints suitable land but also sets the framework for carrying out the environmental impact study for each proposed project. With this blue print, the federal government expects to speed up and improve its process for permitting solar power plants. The government divided the 285,000 acres into 17 energy zones in Arizona, California, Colorado, Nevada, New Mexico, and Utah. The energy zones could accommodate 23.7 GW of solar energy projects, or enough to run 7 million American homes, the BLM estimated.

While renewable energy is way more desirable than power from fossil fuel power plants, its development requires thoughtful plans that aim to minimize its impact on water, wildlife and other resources. Over the past five years, as more big solar farms began to rise from remote regions of the western states, we’ve also seen an increase in lawsuits to slow down or stop certain projects from moving forward.

And, as it’s typically the case, it’s hard to gauge the long-term impact of the public policies we’ve just begun to put to work.

The three projects Jewell touted on Monday totaled 520 MW, or good for powering 200,000 homes. Each developer signed a 30-year lease that requires them to pay a fee based on the land value and the energy production potential of each property. Here is a description of each:

  • Quartzsite Solar Project: California-based SolarReserve is developing this 100 MW project located on 1,600 acres in La Paz County, Ariz. The company plans to erect giant flat mirrors that will concentrate and direct the sunlight to heat water in a tank near the top of a tower. The steam produced will then run a turbine generator to create electricity.
  • Midland Solar Project: Boulder Solar Power plans to build this 350MW solar farm in Nevada on 1,554 acres that the nearby City of Boulder has leased to the Korean Midland Power Co. The project, which will use solar panels, underwent federal review because its transmission line goes through 76 acres of BLM land.
  • New York Canyon Geothermal Project: TGP Dixie Development, part of TerraGen Power, will build this 70 MW power plant and a 230-kilovolt transmission line on 15,135 acres,  about 25 miles east of Lovelock, Nevada.

A quiet breakthrough in geothermal power tech

A startup backed by Google, Khosla Ventures, Kleiner Perkins and Paul Allen’s investment firm, called AltaRock Energy has delivered an important breakthrough for the next-generation of geothermal technology at a site in Bend, Oregon.

Is geothermal poised for growth?

Geothermal energy remains a very small part of the global energy equation, contributing about a quarter of a percent to the global energy mix. The global installed capacity for geothermal power is 11 gigawatts, with about a third of that actually installed in the U.S.
The last year, though, has seen some signs that some folks are anticipating demand growth. Kenya laid out ambitious plans to drill a 3 gigawatt steam field located in its Rift Valley. And Siemens decided to enter the market last year with its 60-megawatt steam turbine, its vice president of global marketing and sales Werner Altmeyet pointing out that research indicated that the global installed capacity could triple to 33 gigawatts by 2020.
Finally, in a recent discussion with the Marietta Sander, the Executive Director of the International Geothermal Association (IGA), she said the IGA had met recently with Japanese decision makers who are reconsidering geothermal. Japan sits on good geothermal hotspots and is aggressively seeking renewables in the wake of the Fukushima disaster.
The huge barrier for geothermal development is the initial cost of drilling for wells. Unlike wind and solar surveys, which take place above the surface, geothermal requires drilling kilometers below the earth. And if you do hit a geothermal hotspot, the temperature and pressure of the well must be sufficiently high to support power generation. Add to this the fact that the geochemical properties of the fluids and steam coming out of the hotspot must be assessed for their corrosive qualities so that the fluids don’t destroy the pipes and turbines that generate power.
On the plus side, geothermal proponents often like to talk about the Lardarello geothermal station in Italy, which was tapped in 1911 and is still producing power. A carefully managed geothermal field can have a very long lifetime. Perhaps as important is that you have very little shutdown time because, unlike wind and solar, steam isn’t an intermittent source of energy. Which means you have to spend much less money on grid energy storage because the utility doesn’t have to manage volatility on the supply side.
Geothermal power costs for the end customer can get as low as 3 cents per kilowatt hour, running up to about 8 cents, which is a pretty large range that depends on the quality of the geothermal field. But at the lower end of the range, geothermal gets cost-competitive with the cheapest form of renewable energy, which is hydroelectric. Hydroelectric costs  3-4 cents per kilowatt hour, which is as cheap and often cheaper than coal and nuclear. But interestingly in Kenya, after a full analysis that took into consideration problems with drought, the government concluded that geothermal was more cost effective than continuing to tap less reliable hydroelectric power.
A recent area of interest in geothermal has been so called co-generation, pairing geothermal with another energy source. In El Salvador, solar has been paired with geothermal to reduce intermittency and smooth out the flow of energy from the plant. And in Northeast California, the Honey Lake power plant pairs geothermal with biomass. In this case geothermal power is tapped to process and dehydrate wood waste prior to combustion.
Due to the fact that geothermal power generation is highly dependent on locating promising wells and that geothermal drilling is often more difficult than fossil fuel drilling, GigaOM contributor Tom Murphy has written that he doesn’t believe that geothermal offers a significant solution to the globe’s energy crunch. That’s true, and geothermal should remain fairly niche even if it does see some growth as individual countries like Kenya and Japan reconsider their energy policies. But as countries move toward “all of the above” energy policies and show greater willingness to explore new energy sourcing, geothermal just might get a slightly bigger seat at the table.

Question of the week

Is geothermal poised to see accelerated growth?

Today in Cleantech

We don’t hear that much about geothermal power in the renewable energy world (it’s just half a percent of electricity generation in the U.S.), mostly because its development far trails renewable energy market leaders hydroelectric, wind and solar. But Kenya of all places is stepping into the geothermal game big time with plans to develop 3000 megawatts of geothermal power, three times the largest solar project in the world, in the country’s Rift Valley. The government is seeking $750 million from the Group of 8 nations, and has already secured $124.5 million from the Africa Development Bank for the first 400 megawatts of the installation. Fans of geothermal love the almost zero greenhouse gas emissions, the relative abundance of the energy, and the fact that once drilled, the plants can last an extremely long time (one geothermal plant in Italy has been active since 1913). On the downside, drilling geothermal wells impacts the local ecology and sometimes requires hydraulic fracturing, which has raised concerns over groundwater contamination.  Though, hey, if we’re going to start fracking in a major way as we’re doing with natural gas, we might as well get an energy source that doesn’t emit CO2.

Cleantech Open announces winners

Twenty-one cleantech startups from across the U.S. competed for a grand prize of $250,000 in investment and services at this year’s Cleantech Open Business Competition. And the winners are . . .