Power(ful) Business Opportunities from
‘The Heat Beneath Our Feet’
By Thomas S. Drolet
CEO, WalAm Energy Inc.
Pardon in advance for the play on words above, but you and I are here to review a real business opportunity in the persona
of clean, renewable and profitable geothermal energy. Indeed we are standing on various parts of our solar systems most
available and prolific natural heat energy source – the earth.
This review is being presented in two parts: Part 1 herein, will focus on defining the origins and place of Geothermal Power
as a current and growing source of renewable electricity. It will also put into context the relative place of Geothermal
beside our other siblings in the family -- hydroelectric, solar and wind power. Part 2 will cover the actual makeup of a
geothermal plant and its profitable business proposition including its short construction to operation cycle after drilling is
complete.
The bottom line of both articles is to underscore the rebirth of geothermal energy as a ‘Phoenix from the Ashes’ (so to
speak). It is now taking its place as an equal partner to hydroelectric power as a growing profitable base load electrical
supply system.
Part 1 – Defining Geothermal and Its Successes
The earth’s surface has, on average; a solid rock “crust” which extends about 50 km (30 miles) beneath the continents but
only 5–10 km (3-6 miles) beneath the ocean floors. Our journey onwards to the center of the earth (Figure 1) would take us
through the mantel and then on into the ultimately liquid core of molten very hot magma containing virtually limitless heat
energy for the purposes of this discussion.
Now, if we could only siphon off and use some of that massive amount of heat at the core of the earth for our needs in
sustaining and growing our economies in an age when some of our current energy systems are under a cloud of concern for
their potential effects on pollution and global warming. Fortunately, we can and are doing so in a small but significant and
growing way. Several countries are currently using some of the heat in the form of hot springs, district heating systems and
as steam to produce electricity—aka, geothermal power.
The Earth’s Heat Source - Basic Facts
Geothermal energy is defined as the available and useful thermal energy
that is stored in the Earth’s crust in the first five kilometers or so of depth.
The energy is actually distributed between the constituent host rock and in
the natural fluid that is contained in fractures and pores of that rock. These
fluids are mostly in liquid water form rather than a steam given the high
pressures as we approach drilling levels of interest.
The Earth’s temperature increases with depth, with the temperature at the
center reaching more than 4200 °C. A portion of this heat is a relic of the
planet’s formation about 4.5 billion years ago, and a portion is generated
by the continuing decay of radioactive isotopes. The temperature of the
e
Earth increases by about 3°C for every 100 m in depth.
Figure 1—Temperatures in the Earth
This means that at a depth of 2 km, the temperature of the earth is about 70 °Celsius, increasing to 100 °Celsius at a depth
of 3km. However, in some places, tectonic activity allows hot or molten rock to approach the earth’s surface, thus creating
pockets of higher temperature resources at reasonably easily accessible depths to our drill bits of today . Through processes
known as plate tectonics, the Earth’s crust has been broken into 12 huge plates that move apart or push together at a rate
of millimeters to centimeters per year. Where two plates collide, one plate can thrust below the other (Figure 2). At great
depth, just above the downward thrusting plate, temperatures become high enough to melt rock, forming magma. Because
magma is less dense than surrounding rocks, it moves up toward the earth’s crust and carries heat from below. Sometimes
magma rises to the surface through thin or fractured crust as lava (Iceland, Hawaii etc).
Similarly, when two plates are diverging (as the mid Atlantic Ridge —
with its most famous manifestation -- Iceland), magma rises to near and
even onto the surface through fractures.
Electrical Power from the Earth’s Heat
The extraction and practical utilization of earth’s heat requires a carrier
which will transfer the heat towards the heat-extraction system
(geothermal plants generating electricity). This carrier is provided by
geothermal fluids forming hot aquifers inside permeable formations.
These aquifers or reservoirs are the hydrothermal fields which are
distributed widely but unevenly across the earth. High heat geothermal
fields occur within well-defined belts of geologic activity, often
manifested as earthquakes, volcanoes, hot springs, geysers and
fumaroles. The geothermal belts are associated with the margins
of the earth’s major tectonic plates (See Figure 3 below).
Figure 2 - Plate Tectonic Processes
In all cases, certain conditions must be met before we have a viable
geothermal resource. The first requirement is accessibility. This is usually
achieved by drilling to depths of interest (1-5 km), frequently using
conventional methods similar to those used to extract oil and gas from
underground reservoirs. The second requirement is sufficient reservoir
productivity. Productive Geothermal systems normally need to have
large amounts of hot, natural fluids contained in an aquifer with high
natural rock permeability and porosity to ensure long-term production at
economically acceptable levels. Currently these areas include regions in
mid to northern Italy, Iceland, Japan, New Zealand, the Philippines,
Mexico, the Geysers field north of San Francisco, various other sites in
California, Nevada, Utah, Idaho, Hawaii, Alaska and British Columbia.
Figure 3 - Hottest Known Geothermal Regions
China, Chile, Peru, Ecuador, Argentina, large parts of Eastern Africa (the Rift Valley), parts of central Europe and western
Eurasia are in the early stages of development or are being actively looked at for development in the near future.
Base Load vs. Peaked (part time) Electricity Generating Systems
Renewable energies traditionally include hydroelectric, solar, wind and geothermal power. Solar and wind electricity
generating systems are generally known as peaked systems (i.e. when the sun shines and the wind blows). Technology
breakthroughs, increasing economies of scale / application and heightened market investor attention have allowed solar
and wind to attain paybacks that are quickly approaching commercially acceptable time frames.
Similarly to hydroelectric power, Geothermal generation systems are predominantly base loaded systems, i.e. always ‘on’
systems that are commercially competitive today (they have commercially attractive IRR’s). Production tax credits and
accelerated timetables are still employed in some jurisdictions to help speed up development of geothermal energy.
Geothermal energy does not burn fossil fuels to produce carbon dioxide. The natural high temperature heat from the earth
is used to make steam that turns a turbo generator set and thence produce electricity.
Proven Performance
The Lardello steam field in central/northern Italy was the world’s first
major geothermal power project and has produced useable heat and
electricity continuously since the early 1900s. Iceland has an astounding
60 per cent of its electricity being generated by geothermal plants (also
providing direct district heating load). The U.S. is currently the world’s
leader in the generation of electricity from geothermal energy, with
California, Nevada, Utah, Idaho, Hawaii and Alaska having an installed
capacity of 2,850 megawatts, of which 2,492 MWe is in California.
California also hosts the largest producing single geothermal field in the
world at the Geysers Geothermal Field near San Francisco generating over 900 Megawatts of electricity for the California
market. That compares with an installed world capacity of nearly 10,000 megawatts in locations such as Italy New Zealand,
Mexico, the Philippines, Indonesia, Kenya and Iceland.
Geothermal is a profitable electricity and heat production system that is expanding quickly. Furthermore, there is real
potential in the next decade or two that will allow society to start to develop methods that utilize deeper heat ---at 10 km
plus. A 2007 study by the Massachusetts Institute of Technology (MIT) reported on developments in Enhanced Geothermal
Systems (EGS) whereby geothermal power is ‘engineered’ by drilling deep wells, fracturing the rock at depth which then
allows the earth’s heat to permeate the wells. Water can then be injected, heated and extracted as a power source. The
MIT study, referred to above, has suggested that with a reasonable investment in research and development,
EGS could provide the world with 100,000 MWe or more of cost-competitive generating capacity in the next 50 years.
Part 2 - Our Warm Globe ‘Can’ Reduce Global Warming
Geothermal energy is a renewable resource by any rational
measure. Large, magma-heated geothermal systems in the earth
are driven by partially molten or crystallized but still hot igneous
intrusions that yield their heat gradually towards the surface at
fracture points over hundreds of thousands, nay millions of
years.
Not a single geothermal field has been exhausted to date,
although some reservoir pressures and temperatures have
slowly declined in response to continuous production in some
localities.
Figure 5 – Overall Geothermal Plant Schematic
Air
One of the most obvious visual elements of a geothermal plant is the plume of steam rising from cooling towers. The key
word, of course, is “steam” – not “smoke”. Geothermal plants use the natural steam or hot water produced by the earth’s
subsurface magma ‘furnace’ – they do not need to burn fossil fuels such as oil, natural gas or wood. As a result, they
produce virtually no air emissions. The key word is “virtually.” In fact, elements including nitrous oxide, hydrogen sulfide,
sulfur dioxide, carbon dioxide and particulates may be present in the source “fuel” – but in extremely low amounts. A
binary geothermal plant produces nearly zero air emissions. At many site locations across North America, air quality has
actually improved because hydrogen sulphide, normally emitted by natural hot springs and fumaroles, now passes through
an abatement system that reduces emissions by 99.9 per cent.
Land
Land impacts also are minimal. Geothermal power plants typically are constructed at or near the geothermal reservoir –
there is no need to transport ‘fuel’ to the plant - and require only a few acres for the plant buildings. Geothermal plants
generally have a low profile, particularly when compared with wind turbines, solar power towers or coal plants with
chimneys up to 200 meters (~ 650 feet) tall. The system of geothermal wells and pipelines serving the plant may cover a
considerable area but does not prohibit other uses such as farming, livestock or wildlife grazing and recreational activities.
The well pads themselves can be measured in square yards and multiple wells can be drilled from a single pad using
standard directional-drilling techniques. Subsidence, the slow sinking of land, sometimes can be ascribed to the depletion
of a geothermal reservoir. This effect can be mitigated through the reinjection of condensed process water into the
reservoir – a desirable procedure in any case in order to extend the reservoirs and therefore the plant’s lifespan.
Water
The reinjection to the reservoir also explains the lack of impacts in the “water” environment, i.e. potential impacts on
groundwater and surface water sources such as creeks, rivers and lakes. Both production and injection wells are
constructed with casing materials that prevent cross-contamination with groundwater systems. It should be noted, too,
that larger energy projects such as those in northern California and British Columbia have undergone rigorous
environmental assessments by federal, state and provincial government agencies; and subsequently must obtain and
maintain a number of operational permits from regulatory agencies that protect both the natural environment and human
health. In this respect, geothermal energy projects have a decided environmental advantage over most other energy
producers.
A Geothermal Plant
More common are systems dominated by hot water at temperatures in the
range 150 - 300 C (300-700 F). For these systems, flash-steam power plants
are required. In flash steam plants the geothermal fluids are brought to the
surface through production wells as much as 4 km deep. At these depths,
the hot waters are highly pressurized, but as pressure is reduced in transit
to the power plant, 30% to 40% of the water flashes (boils) to steam. The
steam is separated from the remaining hot water and fed to a
turbine/generator unit to produce electricity. The residual water is returned
to the reservoir through injection wells to help maintain pressure and
prolong productivity.
Figure 6 - Geothermal Power Plant Schematic
For lower-temperature geothermal reservoirs (those between approximately 100 C (212F) and 150 C, binary-cycle power
plants are the preferred installations. In a binary plant, geothermal waters are passed through a heat exchanger to heat a
secondary working fluid (for example, iso-pentane) that vaporizes at a lower temperature than water. In a closed-loop
cycle, the working fluid vapor spins the power producing turbine/generator unit, and then is condensed back to liquid
before being re-vapourized at the heat exchanger. As in a flash-steam cycle, the spent (heat-depleted) geothermal water
exiting a binary plant is injected back into the reservoir.
Modern Geothermal electric-power plants are typically available 95% of the time. They are modular, and can be installed
incrementally on an as-needed basis. Moreover, construction of these plants is a relatively rapid procedure – as little as half
a year for 0.5 to 10 megawatt units, and 1- 2.5 years plants with capacities of 25-100Mwe.
About the Author:
Mr. Thomas Drolet resides in Englewood, Florida and is currently working as a consultant to various energy industries
worldwide. He spent 26 years with Ontario Hydro, the largest, fully integrated electrical utility in North America serving
customers with hydroelectric, coal and nuclear power plants acting in various engineering, research and operating
functions.
In 1982 he formed Canada’s research and development program into Fusion engineering and technology (CFFTP) and
then moved into International commercial work with Ontario Hydro International, a spin-off unit of the world's fourth
largest electrical utility, where he was named President and CEO in 1993. His duties included all aspects of marketing,
project management, and operations with electrical utilities in over 40 countries worldwide. He was previously Managing
Director of American Electric Power Canada, and president of Canadian Energy Opportunities, Inc., DTE Energy
Technologies as vice president, International Business, and President and CEO of Western GeoPower Inc (USA) and CEO of
WGP SpA (Chile) wherein he worked to develop large Geothermal Projects in the USA, Peru, Nicaragua and Chile.
He was appointed as CEO of WalAm Energy Inc. on January 1, 2011.
Tom is currently on the Board of Directors of Ember Resources Inc, a Natural Gas production Company active in Alberta
Canada. Mr. Drolet holds a bachelor's degree in Chemical Engineering from Royal Military College in Canada, a Masters of
Science degree in Chemical Engineering and DIC from Imperial College, University of London, England. Tom also obtained
a certificate from the University of Western Ontario (late 80's) in International Business.
For more information, please visit www.walamenergy.com