When we talk about “geothermal power” we most often refer to harnessing temperature the earth far below the surface in order to heat water (or another liquid), create steam and turn turbines. The core of the earth burns at a balmy 9,000 degrees Fahrenheit about 4,000 miles from the surface. Wells for geothermal power plants drill down between 1 and 2 miles in search of rock that exceeds water’s boiling temperature. A 2008 report from the U.S. Geological Survey estimated that 40,000 MW of geothermal capacity in the United States could be developed today while a 2006 report from the National Renewable Energy Laboratory estimates as much as 100,000 MW by 2025. (For reference, a regular coal power plant could be anywhere from 500 to 1,000 MW.)
By contrast, “geothermal heating and cooling” uses similar principals, but rather than providing energy to the grid it offsets energy used for tempering single buildings. Geothermal systems use the ground as either a heat sink or heat source depending on the climate and the season, capitalizing on the fact that the ground remains a stead 50-55 degrees once one digs more than six feet below the surface. Instead of miles of drilling, wells are bored down anywhere from 100 to 500 feet searching not for high temperatures, but merely enough surface area of stable temperature around the well casing. Combined with a heat pump, heat is absorbed from the ground in the winter and forced back into it in the summer. The result is less energy needed in the form of electricity or fossil fuels to temper interior space. (For a more in depth description of geothermal heating and cooling see Digging Into Geothermal).
Both of these technologies offer the opportunity to remove fossil fuel consumption, and their resulting emissions, from our energy usage portfolio. Given that coal is still our most abundant source of power production, the reliability of geothermal power can help replace coal plants as a source of baseload power for the grid. Geothermal heating and cooling can displace heating oil, natural gas or electricity depending on the location and time of year. Right now, heating and cooling of our homes account for a combined 54% of our annual household energy usage according to the U.S. Department of Energy.
Production and Costs
When comparing the cost efficiency of these two technologies that are drastically different in scale, the common metric can be broken down to British Thermal Units, or BTUs, which is a measure of heat.
On the power producing side, the Geothermal Energy Association claims that power plant costs for a new geothermal facility are around $3,400/kw installed. With the commonly accepted conversion of 3,412 BTUs/kwh, the math works out to around 1 BTU per dollar. When sizing systems for home heating and cooling, the metric in question is often tonnage–which technically refers to the how much heat a unit can create or remove relative to the amount of heat escaping 1 short ton of ice at 32 degrees for 24 hours. This equates to roughly 288,000 BTUs per day, or 12,000 BTUs per hour. Including well drilling, equipment and installation, the cost of a geothermal system can be around $8,250 per ton before tax credits. The capacity installation cost actually trumps geothermal power considerably at 1.45 BTU per dollar (and that is without any tax credits). The end result is that, as of right now, we can get more heating capacity out of the earth at the local level than the utility scale.
A bit counter-intuitive? Usually the law of Economies of Scale tells us that it is more advantageous to build in bigger quantities and on a larger scale. While data seems to be indicating that the cost to produce electricity at a functioning geothermal power plant is comparable with other forms of generation (including fossil fuels) the achilles heel of the technology reportedly lies in the process before the power plant is even built. The success of any geothermal power installation hinges on the location of wells that will provide enough ground heat, hot water or steam to drive turbines of a given capacity. Finding out exactly where to drill has proven to be the difficult part. Though exploratory drilling for oil has made a series of strides over the last half century geothermal still struggles, resulting in what one article in Scientific American implies as guess-and-check.
“The United States Geological Survey estimates that 70 to 80 percent of U.S. geothermal resources are hidden. You can’t see it on the surface, and we don’t have the technology to find it without blind drilling. … Geothermal hasn’t had the breakthroughs in geophysical science that the oil industry had in 1920s. We are still looking for where it’s leaking out of the ground.”
As an industry worth tens of billions of dollars, big oil has the capital to spend on exploration given that the payback on a successful well comes relatively quickly. Still in the building stages in the U.S., geothermal has to try to minimize excess cost in drilling a well that has a more gradual rate of return than striking it rich with black gold. Even then, the same article points out that only 13-15 states have meaningful access to estimated geothermal power reserves. Conversely, since geothermal heating and cooling is not searching for 120+ degree earth, suitable wells can be drilled just about anywhere (some soil compositions can prove challenging for open loop systems).
The GEA states that the U.S. had just under 3,000 MW of install geothermal power capacity as of 2007. Today there is just over 3,100 MW. If it sounds small, it’s because it is. We have over 43,000 MW of American wind capacity currently installed. According to the Energy Information Administration, geothermal was responsible for only 3.6% of renewable electricity production in 2009 (which in turn is only 11-12% of our country’s entire electricity production). However, it is important to note that at that time, it still out-shined solar by almost 2 to 1 in electricity production, admittedly before solar’s sizable gains in the past two years.
Keep the Scale Small
Given the various caveats and restrictions, geothermal heating and cooling could make more sense as a national pursuit at this point in time. Its application and installation make it an option for virtually anywhere in the United States. Given that all the energy harvested from a system never goes outside the individual home, new installations can dodge the steps of grid coordination or power purchase agreements that utility scale power projects need to negotiate.
So far, it appears like the market agrees. Around 2006, the country was installing 50-60,000 new geothermal heating and cooling systems a year. According to a report from Pike Research, that number has risen up to nearly 110,000 in 2011 with a forecasted rise to 326,000 units per year by 2017! Though the report does concede that even with the rise geothermal still only accounts for around 1% of the heating and cooling market, the rising cost of electricity and oil, combined with environmental incentives and regulations, all point to a stronger industry demand in the foreseeable future.