Geothermal energy and the revival of a forgotten renewable

Geothermal energy and the revival of a forgotten renewable

Fervo Energy co-founder and CEO Tim Latimer joined the Texas Power Podcast with Doug Lewin to discuss a hoped-for resurgence in the geothermal energy industry. Subscribe wherever you get your podcasts.

Tim Latimer was working as a drilling engineer in South Texas when he couldn't shake a newfound curiosity.

Latimer was new to the oil and gas industry, and in 2012, the industry was at the height of the shale revolution. He was tasked with navigating the challenges created by high drilling temperatures in the Eagle Ford Shale region.

As he did more research Latimer discovered the world of geothermal energy.

"I had never heard of geothermal at that point in my life," Latimer said on the Texas Power Podcast from Renewable Energy World.

Living in Houston and confronted by extreme weather events that continued to increase in frequency, Latimer became interested in climate change and a potential career in clean energy. Once he realized that the drilling skills he was forging in the oil and gas industry could be used to help the planet, the decision to make a change came quickly.

He became obsessed with geothermal energy.

In the decade since Latimer first landed in Eagle Ford, he earned an MBA from Stanford, met Jack Norbeck and, along with Norbeck, co-founded Fervo Energy, an enhanced geothermal systems developer on the frontline of geothermal's resurgence. 

Geothermal 101

Geothermal energy makes use of heat within the Earth. Those uses are commonly categorized as electricity generation, heating and cooling of homes and buildings, and industrial applications.

Fervo Energy co-founder and CEO Tim Latimer

The shallowest geothermal application is a ground source heat pump, which requires drilling to depths of 50-400 ft. Heat pumps take advantage of steady temperatures at that depth, typically around 60 degrees Fahrenheit year-round.

Direct use heat drill depths range from a few hundred to a few thousand feet in depth and can be used for applications like district heating grids.

The distinction between ground source heat pumps and direct heating is that the former use constant temperature for heat exchange to make more efficient heat pumps, whereas the latter use the heat of the rock at temperatures of 100-200 degrees Fahrenheit.

Geothermal electricity generation taps high-energy-content steam at temperatures of 300-700 degrees Fahrenheit and requires drilling to depths that are as much as tens of thousands of feet below the surface.

The process works by drilling sets of both injection wells and production wells. Cold water is pumped down the injection well and then flows through the geothermal reservoir to the production well. The water returns to the surface at a high enough temperature for the energy to be captured at the surface and enter an electric generation cycle.

Electricity was first generated from geothermal energy in Tuscany, Italy in 1904. At the time, large heat expressions could be seen escaping from the surface through steam vents. Future geothermal projects would capitalize on similar visible manifestations, including geysers.

Today, it's much more challenging, and expensive, to find heat resources suitable for electricity generation. That's why companies like Fervo Energy are incorporating techniques from the oil and gas industry to give the geothermal industry new life.

Founding Fervo

A new wave of geothermal energy development leans on the efficiencies and technology breakthroughs that fueled the shale revolutions in the U.S. in the early 2010s.

Back then, most geothermal drilling projects used outdated drilling rigs, Latimer said. There was no software. No automation. And, maybe most importantly, there was little directional drilling, a mainstay of oil and gas exploration and development.

After Latimer quit his job at BHP Billiton in 2015, he earned an MBA and master's degree in the School of Earth Sciences at Sanford University, where he worked closely with the Stanford Geothermal Research Group. That's where he met Jack Norbeck, who would later helped co-found Fervo Energy and serves as its chief technology officer.

Latimer has pursued the idea that technology designed and innovated for the oil and gas industry could apply to geothermal and unlock the 24/7, 100% clean energy resource.

Fervo Energy launched in 2017 with the mission to use horizontal drilling technology and multi-stage well completion to scale geothermal power generation development. The company would also incorporate modern data sets, like distributed fiber optic sensing, which weren’t being used in the industry prior.

Latimer and Norbeck received a research grant and spent two years embedded inside the Lawrence Berkley National Laboratory's Energy Geosciences Division. When the program ended, Latimer took Fervo Energy back to Houston, an acknowledgment that there is much to learn from the sophisticated drilling techniques used by the oil and gas industry.

Latimer and Fervo Energy's story is at the heart of the energy transition. He hopes others take notice.

"I started my career in oil and gas. I have tremendous respect for the people that I work with in the oil and gas industry," Latimer said. "Once people realize that their skills can apply in a new type of energy generation and the clean energy transition, they get a lot more excited about it."

Barry Smitherman, a former chairman of both the Texas Railroad Commission and the Public Utilities Commission of Texas, and the current chairman of the Texas Geothermal Energy Alliance, joined the Texas Power Podcast to discuss his background and the push to expand geothermal energy development.

Hit or miss no more

While it’s true that some estimates exist about subsurface heat source availability,  drilling remains the only way to figure out what's truly available. And the high cost of operating an exploration rig leaves little room for misses.

Most of the ultra-high-temperature, shallow reserves were discovered and developed in the 1960s and 70s. As a result, the geothermal industry had to drill deeper -- 10,000 ft. vs. 3,000 ft. -- to find heat sources suitable for power generation.

Drilling deeper wells became cost-prohibitive. About one out of three projects aren't commercially viable, from a resource perspective, Latimer said. A well can cost $5 million to drill, and every additional foot deeper is exponentially more expensive.

"You really can't scale that as a resource in very competitive power markets. And so, if you want to scale geothermal, the problem that you have to address is you can't afford to drill a bunch of wells that don't actually produce anything," Latimer said.

Fervo Energy's production and injection wells aren't next to each other vertically— they're stacked on top of each other horizontally. In practice, that means the company drills 10,000 ft. down and then 5,000 ft. horizontally, with the wells in horizontal strata a few hundred feet apart.

With that approach, Fervo Energy isn't trying to find a heat resource using a seven-inch pipe in the subsurface. Instead, they have more than a mile to assess as the subsurface, overcoming a lot of the hit-or-miss drawbacks of geothermal.

These innovations are not new and have been tested and proven by the oil and gas industry, allowing Fervo Energy to move quickly to market.

Geothermal for reliability and resiliency

Sunset over a U.S. Department of Energy geothermal test site (Naval Air Station Fallon in Nevada). Photo credit: Dick Benoit

Like millions of Texans, Latimer lost power when Winter Storm Uri hit the state with extreme cold weather in Feb. 2021. He sees geothermal as both an answer for deep decarbonization and reliability challenges.

Resource availability has become a focus of Texas grid regulators and lawmakers ever since the storm. Renewables like wind or solar have faced heightened criticism for their variability.

Deep decarbonization will require a portion of capacity to come from clean, firm power sources that can be dispatched any time. Wind, solar, and batteries can do most--but not all--of the job.

Fervo Energy's mission is to scale geothermal power production to the point where it can be that missing piece. Twelve states have already passed laws mandating 100% clean energy and are looking for that answer now. 

"Even with low-cost batteries, every study kind of comes up with the same result that getting more than perhaps 60-80% of your grid from clean electricity in a year requires you to get solutions that go beyond wind and solar batteries if you want it to be cost-effective," Latimer said.

Fervo Energy is working with Princeton's ZERO Lab, Lawrence Berkeley National Lab and Rice University on a research project that is looking at geothermal power production’s ramping capability to meet the real-time needs of the grid.

In the West, where daytime power prices are often negative due to the availability of solar power, around-the-clock geothermal power generation doesn't make sense. Instead, researchers are examining how to feasibly trap pressure in geothermal reservoirs as a form of energy storage to be used when the sun sets.

"The project doesn't reply on anything that hasn't been proven out or technically shown in the field," Latimer said. "The question is how do you take those parameters and create a system that's optimized."

Google and the pursuit of carbon-free electricity

Google has been carbon-neutral since 2007 through carbon offsets, and was one of the first companies to purchase renewable energy directly through PPAs in 2017. The company is now in the process of transitioning from 100% annual renewable energy matching to 24/7 matching by 2030.(Courtesy: Pawel Czerwinski/Unsplash)

Latimer and Fervo Energy believe that geothermal energy will follow a learning curve that becomes cheaper and cheaper after thousands of wells have been drilled.

But starting out has been difficult. Early on, customers told Latimer that they would love to get involved after a few of the (very expensive) initial projects had been brought online. The market for geothermal didn't really exist.

That all changed with Google's 24/7 carbon-free electricity movement. Several years ago, the company said it had met and exceeded its 100% renewable energy procurement target. Looking to go a step further, it made a pledge to match every hour of energy consumption with clean energy.

Google's backing paved the way for Fervo Energy's first project, a 5 MW facility near Las Vegas, Nevada, that's expected to come online early in 2023.

Another major step to establishing a market for geothermal power generation has been California's 2021 requirement for load serving entities to procure 1,000 MW of non-weather-dependent, zero-emissions energy.

As a result, Fervo Energy secured a 15-year power purchase agreement from a group of nine California-based community choice aggregators for a 20 MW geothermal project under development in Beaver County, Utah.

The project is expected to begin operation in the first half of 2026.

Latimer wants to go beyond megawatt-hour accounting, though. He wants geothermal to directly power operations with clean electricity.

"That's why we did the deal with Google," he said. "We need some sort of catalytic customer to come through and say, 'Yeah, we understand the value of this long-term.'"

The next step

Listening to Latimer speak, he's as obsessed with geothermal energy today as he was when he first learned about the technology in the oil fields of Texas a decade ago.

The systems are proven. And there's no question that geothermal could serve as a crucial piece of a decarbonized grid. Now, one of the only breakthroughs left is public awareness.

"We need to make sure we're raising awareness about geothermal so that people actually understand this is every bit as important as solar," Latimer said. "And, in fact, even more so because this is going to be that critical piece that allows us to keep the lights on 24/7."

Fervo Energy is a member of the Texas Geothermal Energy Alliance, which formed in 2022 to advance and advocate for the industry. Barry Smitherman, the president and chairman of the TxGEA, appeared on a recent episode of the Texas Power Podcast.

Much of the alliance’s work is focused on geothermal energy receiving the same attention, and policy support, of other renewable energy sources, like wind and solar.

The federal Investment Tax Credit and Production Tax Credit programs that have fueled solar and wind project development in the U.S. have not historically applied to geothermal. This "discrete policy decision," as Latimer puts it, has been one of geothermal’s biggest challenges to overcome.

On the permitting front, the Energy Act of 2005 helped streamline oil and gas drilling. That policy does not extend to geothermal drilling, even though the processes are very similar.

"Being forgotten hurts geothermal in many policy ways," Latimer said. "We have to develop projects oftentimes that don't have the economic support that other renewables get, but then also don't have the permit streamlined support that fossil fuel projects get."

The Inflation Reduction Act has brought significant relief to the geothermal industry. The climate law extends tax credits to all zero-carbon-emitting power-generating technologies starting in 2023.

The law gives Latimer and Fervo Energy certainty for, at least, the next 10 years. When geothermal was included in prior tax credits, it was never longer than 12 months.

"It's really difficult to plan a business around that," Latimer said. "The IRA brings an enormous amount of certainty into the business for us."