New Twist On Geothermal With Roots In Canadian Oilpatch Set To Spread Worldwide
This is part of an ongoing DOB series, titled “New Directions, New Possibilities,” which examines energy innovation, sustainability challenges and opportunities. Previous articles looked at petrolithium development and how Alberta start-ups are in a global race to grab a piece of the booming lithium supply chain.
In searching for the next breakthrough in geothermal energy, Royal Dutch Shell plc came up with a top ten list of what was holding geothermal energy back. As a clean source of baseload power and heat, geothermal has the unique ability to fill the intermittency gap left by those other clean sources of power — wind and solar. But unlike those sources — which have undergone exponential growth — geothermal has failed to launch in a significant way.
But that may be about to change. New technologies and techniques being applied to new geothermal systems — often transferred from the oil and gas industry — combined with the increasing urgency to decarbonize power and heating are leading to a surge in interest in harvesting the Earth’s subsurface heat energy.
A Calgary-based startup is in the forefront of the charge. By honing an entirely new way to harness the heat of the Earth, Eavor Technologies Inc. could provide the type of game changer the industry is looking for. (The company’s technology was named a champion last month in the DOB’s Energy Excellence Awards.)
Leveraging leading-edge oil and gas drilling technology, Eavor (pronounced “Ever”) has created a means to access geothermal power — typically limited to areas containing accessible volcanic-like temperatures — almost anywhere. Its closed-loop system, known as the Eavor-Loop, does not rely on the need to find suitable underground reservoirs. In fact, the conductive process does not interact with underground reservoirs at all.
Initially unaware of Shell’s list, Eavor now believes it has solved all 10 challenges. After its technology was developed, “we looked at the 10 and realized, the thing we just did [to develop Eavor-Loop was to] solve all 10 of those supposedly intractable problems,” said John Redfern, Eavor president and CEO.
“And that’s when we said, what we have here is something more than a solution to what can we do with a bunch of unusable [for geothermal] sites. It’s like the holy grail of power. This is what people are looking for — something that’s scalable, green and not intermittent. As desirable as that niche is, no one’s really been able to fill it.”
Shell seems to largely agree. The oil major became involved early on and continues to work with Eavor to commercialize the technology, primarily in Europe. “We recognized that Eavor-Loop, and its unique conduction-only closed-loop design had the potential to address many of these [top 10] concerns. That is why we’re supporting Eavor and their Eavor-Lite demonstration project,” said Malcolm Ross, the geothermal focus leader in the Shell New Energies Research & Technology team, who goes by the title Black Swan Detector in New Energies.
Eavor-Loop’s creators liken it to a massive subsurface radiator that collects heat from the natural geothermal gradient of the Earth at geologically common and drilling-accessible rock temperatures, using multiple lateral wells through which a benign working fluid is circulated.
Being a closed loop isolated from the subsurface environment, it requires no water presence or use and eliminates any chance of aquifer contamination. It’s not burdened with the exploratory risk of finding highly permeable aquifers nor limited to niche geographies containing tectonically active areas. Unlike engineered geothermal systems, it requires no fracking, thereby presenting no earthquake risk.
The concept began as an exploration into solving the province’s abandoned and orphaned well problem. Its inventors quickly came to a conclusion many others have, that “we couldn’t really consistently and scalably reuse the wellbores, because they’re all different and never really exactly what we’d want. And we’re in a very marginal geothermal province anyway for traditional [geothermal] technologies. We realized there’s no way to convert tens of thousands of oil wells into geothermal wells, and to do it efficiently.”
But co-founder Paul Cairns, chief business development officer, didn’t let it go at that, Redfern said, and other options were investigated. One challenge of low temperature geothermal is that with its low energy production, 50-80 per cent of the energy produced is used just to drive the pumps to keep the fluids circulating. “That’s a really energy intensive operation, and that sort of kills the economics.”
A eureka moment came when they realized the closed loop could create a thermosiphon effect, essentially creating a natural pump to keep the fluid circulating. Thus, “it will essentially pump itself — because as it starts circulating, one side will be hot water coming up and the other will be cold water going down, which is more dense.
“That was the start of the whole idea. And it was just a continuous cycle of innovation to say, okay, we’re not quite there yet, how do we make this concept of a loop better? How do we do it so that we can drill it as quickly as possible and save a lot of money by not having to case the multilaterals? How do we find better working fluids and drilling fluids? And eventually we got something where we said, ‘Actually, this can be economic here — marginally, but it could just make it in a place like Alberta.’ But that meant that already we were super economic in a whole bunch of other markets” more amenable to geothermal.
Eavor arrived at a different solution because it started with a different question, he said. While most developers simply seek to go hotter and deeper to make geothermal better, Eavor didn’t have that option in Alberta. “The sedimentary basin isn’t that deep. So we were limited in temperature and that’s why we had to look for this more efficient solution. It is better because Alberta [is so challenging] for geothermal that we came up with an innovative way of doing it.”
The result is a method that “can be implemented across 80 per cent of the world instead of five per cent of the world like traditional geothermal. You can put it almost anywhere,” Redfern said. “We avoid the whole exploration phase that a lot of times ends in tears, and we turn it into a repeatable manufacturing process.”
Seeing is believing
But Eavor still had to prove the technology at near-commercial scale. For that, it built the $10-million Eavor-Lite demonstration facility (see photos above) near Rocky Mountain House, Alta.
Last summer, two Precision Drilling Corporation rigs launched simultaneous drilling operations at 2.5 kilometres distance, boring two vertical wells connected by two approximately 1,700-metre multilaterals, steered to join in the middle using magnetic ranging technology, to create a U-shaped loop at 2.4 kilometres depth.
The wells, connected on surface via pipeline, were completed in 46 days, something Precision president and CEO Kevin Neveu, whose company has been involved since close to Eavor’s inception, said he was “thrilled” to have accomplished in achieving an important technical milestone for the company.
The target circulating formation is the Rock Creek, a quartz sandstone, in an area with average geothermal gradient and bottom hole temperatures. The circulating fluid picks up heat in the subsurface loop, exits at surface, and the thermal energy is discharged in an aerial cooler. The layout of the multilateral junctions, multilateral wellbore intersections created using Eavor’s RockPipe protectant, and thermodynamic performance are the same as a commercial design.
Federal and provincial grant agencies contributed almost $9 million to the project, and Shell International Exploration and Production, via its New Energies Research & Technology program, provided technical expertise toward the design, as well as follow-on commercial implementation.
The facility was commissioned and switched to thermosiphon mode in December. The flowrate and temperature have remained steady and consistent since then, according to Eavor. Delegations from about a dozen countries have toured the site.
The project has provided many learnings leading to new intellectual properties and will be used as an ongoing test facility for advanced operating fluids being developed under Eavor’s ongoing R&D program. Having proven up the technology in a sedimentary basin, the company is now looking to demonstrate it in igneous rock in Norway.
Such proving grounds are vital to showcase a technology that even Redfern said he initially viewed as “a dumb idea.... We all originally thought conduction-only geothermal doesn’t work [or] is going to be too expensive. When we explained how we do it cheaply, people said, ‘That might work, but I want to see it.’ So now they can. And what’s nice is seeing everyone start as doubters and then become converts — that’s always satisfying.”
As well, TNO, the Netherlands Organization for applied scientific research, provided an independent assessment of the Eavor-Lite project. “They are very well respected, and were themselves originally doubters,” Redfern adds. “They verified all our calculations and all our methodologies and all the results in an audit report.”
The company owes a big debt to the oilpatch from which it borrowed the technology, without which the Eavor-Loop would not have been technologically viable. Redfern, who left the oil and gas industry to pursue startups in China before being lured back to Calgary to co-found Eavor three years ago, has likened Alberta to the “Silicon Valley of energy services.”
(An oilpatch veteran, Redfern has held multiple international oil and service company executive roles including as a director at Hess Corporation in London, president of Accumap in Calgary and president of IHS Energy in Denver.)
Horizontal drilling has come into its own thanks to advancements generated by the shale revolution and oilsands SAGD production, both of which require precise aim through hundreds of metres of hydrocarbon bearing formations. And faster drilling has led to dramatically reduced costs.
“It’s all driven off day rates [and] number of days of drilling; that’s the vast bulk of our costs, and people just didn't drill that fast horizontally historically. There’s a bunch of reasons why they can drill faster now: bigger rigs, better hydraulics, you name it. So that’s one of the reasons why this wasn’t ‘invented’ earlier. We’re really riding on the coattails of the oil industry.
“Another example: our economics depend a lot not just on the speed of drilling, but on the idea of having a lot of multilateral segments off the same vertical well pair. And that’s SAGD drilling where they’re used to having several laterals off a single well. So a lot of our people cut their teeth in the SAGD area. SAGD is also about injecting heat into a reservoir, so there is a lot of thermodynamic knowledge there too. We’re just asking them to reverse the equation.”
As development is scaled up, further cost reductions are expected, said Redfern. “We’re sort of where wind and solar was years ago, at the start of a long learning curve. We are on the ground floor. There’s another whole optimization trail that we will do, given where we are at the moment, that will [bring] down costs.
“And no one knows how to drill these type of wells the way people in North America do. This is the cheapest place in the world to do these things, with the best expertise in the service industry or in the engineering and the geology that these guys are doing — it’s all right here.”
Scalability is essential
One of the major drawbacks for Shell and other big oil companies has always been the lack of scalability of geothermal. Largely limited to geologically active areas like those found in Iceland and California, it has been too niche a market to interest large companies.
Closed-loop technology changes the calculus in that respect since it can go anywhere there’s heat — which is virtually everywhere if drilled deep enough. By removing the need to find shallow high temperatures and permeable aquifers, Eavor provides “a uniquely scalable source of emissions-free baseload power,” notes Redfern. “Traditionally geothermal hasn’t been very scalable because it only works in a few rare places efficiently. That’s why despite being around for 100 years, there’s only [a handful of] geothermal power projects on the entire planet.”
The Eavor-Loop also provides greater flexibility in scale. Theoretically it can go from powering a neighbourhood to powering a city and everything in between. “We can do it in smaller increments. So you could invest $30 million, do the first loop, and for other $30 million do the second, and just grow it so it becomes, after a few loops, self-financing — and much lower risk as well.”
Each Eavor-Loop installation is capable of generating industrial scale electricity or producing enough heat for the equivalent of 16,000 homes. The company has a stated goal to convert the energy equivalent of ten million homes in 10 years to the Eavor-Loop solution.
Low hanging fruit
Though developed and proven in Alberta, Eavor plans to take the technology first to markets where its best attributes are the best fit, such as higher priced markets in Europe, as well as isolated grids and remote communities.
Western Europe is a prime target as it presents a natural fit for a technology that can produce both power and heat. The EU’s goal to be carbon neutral by 2050 necessitates getting off a prime provider of both — coal. While wind and solar can replace much of the electricity, replacing the heat is more challenging.
“The quick wins there are where you already have district heating networks and you’re trying to wean them off coal or natural gas,” said Redfern. “They want to encourage green baseload power because they’re having a hard time getting off coal. We provide that as an opportunity.”
The region is also sprinkled with shovel-ready sites for which Eavor can step in immediately — sites intended for conventional geothermal systems that turned up dry, which are more numerous than one would think, according to Redfern.
A deal with Germany’s Enex Power Germany GmbH announced in May to jointly develop heat and power projects at a brownfield geothermal site in Bavaria is a prime example. The deal involves Enex contributing existing geothermal assets for the development of Eavor-Loops.
The Enex project dates back to 2004, when it was granted a geothermal concession to develop the site. Two exploratory geothermal wells were drilled at a cost in excess of €30 million, neither of which were able to deliver enough hot hydrothermal water to enable the economic development of a traditional geothermal project.
However, both wells confirmed a geothermal gradient or formation temperature well suited for development of Eavor-Loops and the production of electricity and commercial heat suitable for district heating and industrial processes.
Enex’s surface lease and drill pad are located in an industrial development zone with access rights for the interconnection of electricity to the local distribution grid. There is also the opportunity to potentially sell heat to the town of Geretsried, just south of Munich, for district heating.
“Given the long history of the project, the extensive prior community engagement, the existing regulatory approvals, the existing infrastructure, and the excellent reputation and relationships of Enex in the community this project is an ideal candidate for the rapid deployment of Eavor-Loop,” stated Eavor.
Electricity produced will be eligible for payments under a feed-in-tariff in which the German government augments the price received for 20 years. Front-end engineering and design of the project is expected to be completed this summer, with construction planned in early 2021.
“After two failed attempts to find sufficient hydrothermal water at the given location, we are absolutely enthusiastic to be working with this new innovative technology that overcomes this prerequisite for an economically viable exploitation of geothermal heat,” Robert Straubinger, Enex chief executive officer, said in a statement. “In the attempt to lower their CO2 footprint, this is highly appreciated and supported by the neighbouring communities.”
Eavor has about a dozen other prospects in the pipeline in Germany and others in Italy, France, the Netherlands and elsewhere, Redfern said. “There are a lot of places in Europe that have a nice, deep, reasonably hot sedimentary basin that we can use to generate both power and heat, like Germany — or in other places where the power prices are low, in the Netherlands or France, [there are] heat markets for district heating and things like that.”
Conversely, some markets are ripe for the emissions-free power geothermal can produce. Japan is looking for low-emissions electricity as it gets off nuclear, he said. “We’re looking at a bunch of opportunities there [including] one in the very shadow of [the destroyed nuclear power plant] Fukushima itself.”
Other markets have made so much progress with renewables, such as California, “that they’re choking to death on wind and solar.” The Eavor-Loop is designed in such a way that output can be ramped up and down as needed, making it complementary with intermittent renewables.
In California, where the excess of renewable power is already leading to negative midday pricing, new utility scale projects must now include some reliable element of capacity. “We can put an Eavor-Loop right underneath [a solar farm] so there is no more surface footprint and shape our output around that solar peak,” said Redfern.
The other low hanging fruit are island markets represented by literal islands or figuratively isolated areas, like confined military bases and remote Arctic communities. “We’re looking at opportunities in all of those places because they are isolated, and the marginal cost of power [is often] set by diesel. They’re also constrained in space and don’t have a big grid that can absorb a lot of wind and solar power. They need a complete solution, and so they are ideal markets for us.”
Military bases basically want to pretend they are an island, said Redfern, since they don’t want to be reliant on a grid connection, a pipeline or fuel deliveries that extend beyond the base, nor to potentially vulnerable windmills and solar panels. “They prefer something that’s buried right underneath the base, hardened, impervious to hurricanes or terrorist attack. If we can prove that up, we’ve got hundreds of clients right there.”
Northern communities can also resemble islands in their isolation from electric grids. In January, Eavor announced a deal with the Yukon-based Carmacks Development Corporation (CDC), wholly owned by the Little Salmon/Carmacks First Nation, to deliver baseload geothermal power and heat. An Eavor-Loop will generate about three megawatts of electricity and is expected to cost $30 million to install, with construction set to start early next year.
“Of all the places in Canada, it’s the best sweet spot because the alternatives don’t work that far north, but geologically it’s still reasonably hot. And we have good local buy-in because there’s no other solution that’s actually very popular,” said Redfern.
Arctic cold actually increases geothermal efficiency, since the bigger temperature difference means more power. “So our power production actually peaks on the coldest day of the year there. And what’s our waste product? It’s a bunch of heat — I’m sure you can always find a use for some heat in the middle of the Arctic.”
The deal gives the CDC an equity position in Eavor Yukon and a seat on the board, ensuring that the First Nation will have direct involvement in the direction the company takes in the region, noted Chief Russell Blackjack.
“Of particular interest to our Nation, because of Eavor’s small surface footprint, [is] it will preserve the natural landscape of our ancestral lands for generations to come in a manner that wind, solar or hydro cannot. This, and the fact that it’s the only solution available to us that is both reliable and green, made Eavor an easy choice for us to partner with,” Blackjack said in a statement.
Eavor and CDC are in discussions with a half dozen other Yukon-based First Nations that have also expressed an interest in being a part of Eavor Yukon or in specific Eavor projects. Mining is also a possibility, said Redfern. “In a place like Yukon, we’ve got a five to maybe 20 megawatt market there to top up the local grid over time. But the big win there, and what our First Nation partners really want to see happen longer term, is to get mining projects going. If you get a mining project that needs 50 to 100 megawatts of baseload power, that’s just perfect for us.”
Ultimately Eavor wants to use all those markets to drive the cost down with as much scale as possible, so it can get down to what is consider the ultimate goal — sub five cents a kilowatt hour, green, baseload power that’s fully scalable that could be put just about anywhere, Redfern concluded. “That then becomes a real game-changer.”
And with its expansion and growth, the geothermal sector can give back to the oilpatch a viable services sector by providing a diversified customer base for its equipment and skills pending the upturn in commodity prices, as well as a potential bridge to a clean energy future.