What is Geothermal Energy?
Geothermal energy is produced by harnessing the heat of the Earth. Geothermal resources have been harnessed for centuries, beginning in direct use cases such as heating and bathing. Modern geothermal resources began in Boise, Idaho in the 1890s to heat commercial and residential buildings.1,2 Geothermal energy for electricity generation began in the 1960s in the Geysers region of California, the world’s most active geothermal field in electricity generation capacity.3
Geothermal Heat Pump
Enhanced Geothermal Systems (EGS)
Geothermal energy can be incredibly diverse. Historically, there have been two main ways to harness geothermal resources – through geothermal heat pumps or hydrothermal resources. Geothermal heat pumps are an example of direct-use, which captures the heat from geothermal resources and redirects the energy for beneficial uses such as space heating and cooling, which utilizes the temperature difference between the ambient air and the temperature of the geothermal resource. Hydrothermal resources use existing hot water or steam in naturally occurring regions, where the resource is at the Earth’s surface or comes close to the surface. Hydrothermal steam or hot water can also be captured to drive a turbine, similarly to thermal electric power generation or hydropower, generating clean electricity.4
Geothermal energy is a clean, renewable resource available in most regions. A recent DOE study, GeoVision, highlighted the potential to combine other energy sector technologies with geothermal energy to tap into regions once thought impossible. These are called enhanced or engineered geothermal systems (EGS), where existing and safe oil and gas technology is utilized to access larger geothermal resources or to create artificial reservoirs through the injection of water in hot rocks.
EGS is considered an unconventional resource when compared to hydrothermal geothermal energy. EGS can be found at any temperature above “ambient temperature” where an energy conversion can occur.5
According to GeoVision, improved technology development and reduced costs could increase geothermal electricity generation to an estimated 60 GW of always available, flexible, clean, and dispatchable electricity.6 When comparing geothermal energy to other renewable resources such as wind and solar, geothermal energy’s generation capacity can be 2-4 times greater. To ensure equal participation of clean energy resources, and to unlock the 60GW of geothermal potential, geothermal energy policy must be reformed.
A Geothermal plant will generate 2-4 times as much electricity as a wind or solar plant of the same capacity
How to Reform Geothermal Policy
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Regulatory Reform Could Unlock Gigawatts of
Advanced Geothermal: The Only Baseload Renewable Power Source is Heating Up By Rich Powell Learn More
How to Reform Geothermal Policy
Reorient and bolster geothermal research, development, and demonstrations to include EGS while improving technology development for heat pumps and conventional hydrothermal resources.
Dots Indicate Existing Hydrothermal Sites
Shaded Regions Are Potentially Suitable for EGS
- Additional research is needed to understand the potential for geothermal resources across the United States. This includes improved subsurface detection, improved drilling and wellbore integrity, improved energy recovery, and modeling of resources all while reducing costs.
- Ensure geothermal energy receives the value it provides.
- Research hybrid opportunities for geothermal energy as well as new revenue streams to maximize value. This can include critical minerals recovery and using geothermal resources to produce green hydrogen. Assessments should be conducted to review barriers to all types of geothermal energy, with an emphasis on “low-hanging fruit,” such as direct-use applications and heat pumps.
- Thermal renewable energy resources such as geothermal should be included as a traditional renewable resource in a similar manner to solar and wind energy. Geothermal energy can provide a greater service to the grid when compared to other renewable resources and can generate electricity as a base load resource.
2. Streamline permitting and regulatory requirements to reduce costs and increase installed geothermal capacity.
- Accessing federal land should be prioritized while improving the ability to access land as a whole. Federal land should be used to continue research while illustrating successful “proof of concept,” encouraging private landowners and states to install geothermal resources. Currently, the leasing process for federal lands is inconsistent, limiting opportunities for geothermal development.
- Accessing federal land should be prioritized while improving the ability to access land as a whole. Federal land should be used to continue research while illustrating successful “proof of concept,” encouraging private landowners and states to install geothermal resources. Currently, the leasing process for federal lands is inconsistent, limiting opportunities for geothermal development. Research should be conducted to determine a pathway to streamline leasing and permitting in coordination with all relevant agencies to mitigate environmental impact while increasing opportunities for development.
- Similarly, a standardized permitting process should be created for geothermal energy. While having a standard process for all large infrastructure projects would be ideal, geothermal energy should have the same opportunities of development as oil and gas. This includes expanding Categorical Exclusions to geothermal energy, reducing permitting timelines and ensuring equal participation.7
NREL Estimates That a Combination of Expanding Categorical Exclusions (CX) for
Geothermal Exploration Would Ultimately Cut the Total Development Timeline
3. Improve stakeholder collaboration and knowledge sharing between relevant industries.
- Increasing and improving public education of geothermal resources while promoting geothermal energy to increase opportunities for the resource is essential to its future. Simultaneously, a workforce for geothermal energy needs to be addressed and built up for the next generation of EGS power plants, heat pumps, and direct-use.
- Collaboration between industries should increase – knowledge sharing is essential. The information gained from the oil and gas industry could catalyze the geothermal industry as a whole, however, there is little discussion amongst the two at the moment. This should be encouraged as the oil and gas industry has had years of experience in unconventional resources and have gained from years of government funded RD&D. Connecting these two industries would ensure the future of EGS, playing a key role in a clean energy grid.
4. Geothermal energy should be incentivized to encourage further investment and development.
- Federal Energy Tax credits have a robust history, beginning in 1978 with the initial enactment of the Investment Tax Credit (ITC).8 Originally, energy tax credits were meant to reduce consumption of oil and natural gas by encouraging the use of a broader suite of energy technologies. Additionally, the intent was to increase investment in research, development, and commercialization of new energy technologies. Specific technology tax credits began in 1992, with the Production Tax Credit (PTC) for wind energy while the ITC initially had applications for solar energy.9 Today, there are several types of tax credits available for energy technologies, where some have expired or are set to expire. Tax credits have become a pressing issue for industry, NGOs, and other actors. In most cases, there have been extensions of various tax credits, including geothermal energy.
- Congress recently passed a short-term extension for geothermal resources in the “2019 tax extenders” bill.10 This allows projects that begin construction in 2020 to qualify for a PTC or can choose to receive an ITC in lieu of a PTC. Instead of having an additional “tax extension” conversation develop in a few years when the credits approach expiration, a technology neutral tax credit based on the percentage of market penetration should be considered. The Energy Sector Innovation Credit, or ESIC, would encourage new technological innovation and market participation for low-carbon energy technologies. Tax credits should incentivize new technologies that need to break into the market, rather than rewarding technologies that can compete in the existing market without subsidies or credits. ESIC would encourage traditional geothermal resources and EGS development, continuing to reduce power sector emissions.
ESIC by the Numbers
- Mink, L.L. 2017. “The Nation’s Oldest and Largest Geothermal District Heating System.” Geothermal Resources Council Transactions, Volume 41: 205-212. ⬏