Going back to geothermal school with Iceland

Can you grow bananas with geothermal energy?

Earlier this spring the Canadian Geothermal Energy Association (CanGEA) went to Iceland to find out. Along with a delegation from the Geological Survey of Canada and a number of Canadian geothermal entrepreneurs, CanGEA attended the Iceland Geothermal Conference, an annual celebration of geothermal energy in all its forms. Iceland has abundant resources and is a world leader in geothermal technology. This means power generation in perpetuity that is so cheap, reliable, and clean that the country is the envy of everyone now trying to transition their economies to carbon neutral energy systems.

Iceland is a postage stamp, a tiny Nordic island with just over 300,000 citizens. The country’s route to geothermal superpower status was incremental, starting with district heating and cooling systems for towns and cities. These systems most often use shallow boreholes, just tens of meters deep. Geothermal power generation is another story, sharing more in common with oil and gas engineering, with high-temperature water piped from much deeper holes to the surface to spin turbines that generate electricity at an industrial utility scale. From humble beginnings, Iceland is now a global exporter of geothermal heat and power know-how. International projects include providing the technical expertise behind large district heating and cooling systems in China and Abu Dhabi. Could Canada be doing the same?

According to CanGEA Chair and co-founder Alison Thompson “the experience of Iceland should cement in the minds of investors and policy makers that geothermal heat is a renewable energy resource that addresses many of Canada’s challenges with respect to clean electricity and heat, sustainable food production, and economic diversification.” Both Alberta and Ontario recently announced coal phase out plans, and the federal government has committed to aggressive emissions reductions targets in Paris last year. Geothermal energy should be getting more attention from policy makers and investors as a market ready solution to decarbonising the power sector.

An opportunity for employment and clean base load power

With respect to the employment challenge of transitioning away from the oil sands, Thompson notes that “the use of oil and gas sector workers in the geothermal industry can begin to fix the oil patch employment crisis in Western Canada. CanGEA are excited to be able bring to the world some of the most skilled geoscience, drilling and equipment providers the geothermal industry has even seen. This is all thanks to Canada’s history of natural resource development.” As Alberta moves ahead with an ambitious Climate Action Plan, the stars could be aligning for geothermal to become a serious source of base load power in the province.

Alongside power generation, Iceland uses its geothermal resources to support a greenhouse industry that produces fresh fruits (including bananas) and vegetables, as well as cut flowers for the domestic market. For anyone one who has lived in northern Canada and shed a tear when having to pay a small fortune for a Mexican bell pepper or California strawberries, the prospect of local produce grown by a local geothermal-powered greenhouse industry is exciting. Hot water from geothermal wells can be cycled through local buildings for district heating before being channeled through greenhouses at lower temperatures. According to Amanda Wu from DeltaTou Energy “small scale geothermal power would offer a triple play for northern communities: cheap, reliable energy at almost zero marginal cost - no more bringing in diesel for generators; high quality employment; and the possibility of greenhouse fresh produce throughout the year.” In order for this to happen, policymakers must first level the regulatory playing field for investors and developers of geothermal projects. This does not require any special treatment, simply extending the tax frameworks that already support the work of oil and gas exploration and production companies to geothermal operators. Stronger government support to build out geothermal energy as a base load power source in Alberta and British Columbia would provide investors with the certainty required to pile in. Until this happens, geothermal’s role will remain limited.

Although Canada had a national Geothermal Energy Program for a decade from 1976, the technology has since been avoided by governments in a rush to develop hydrocarbons. But with bold climate commitments and growing investor appetite for renewable energy projects, Canada could still follow the examples set by tiny Iceland and the United States. The US leads the world in total geothermal electricity production, and the largest group of geothermal power plants in the world is located at ‘The Geysers’, a geothermal field in California. The US Geothermal Technologies Office has worked with oil and gas companies to successfully generate geothermal power from the hot water that flows naturally from drilled petroleum wells in North Dakota.

Orphaned oil wells and the opportunity for community energy systems

Some CanGEA members are optimistic about turning the challenge of Alberta’s orphaned oil wells into an opportunity. With sustained low oil prices, bankruptcies in the oil sector are racking up, leaving the province and taxpayers on the hook for orphaned wells. Water is a major byproduct of oil extraction and many abandoned oil wells continue to produce hot water, but it is not currently being put to productive use. Ben Lee at StromTech Power, another CanGEA member on the Iceland mission suggests that “drilling a well can be half the cost of starting up a geothermal project, so if an orphaned well is suitable for geothermal energy exploitation, this is a win-win option.” Existing drilled wells sized for oil or gas operations that produce hot water are ideal for micro-electricity generation for smaller communities or industrial applications. As long as the old oil wells are located close enough to a community or industrial power users, there is the possibility of harvesting the energy via a gathering system that transports steam or hot water from the wellheads to a district heating system or generating turbine. “Geothermal energy projects are like real estate, it’s all about location, location, location” says Lee.

If the location of an existing drilled well is right, geothermal developers could be helping the province grapple with an out of control number of orphaned and abandoned well sites. With easy access to US industry expertise, now should be the time for government and investors to show the world that Canada can be a renewable energy leader (and grow bananas in Mackenzie County).