Big news - closed loop geothermal delivers first power!
Five years ago, I became an advisor to Alberta's Eavor Technologies, world leader in closed-loop geothermal technology. Last week their flagship project started delivering power to the German grid.
A bit of background
The Eavor story started for me in May 2018, when the company’s then CEO, John Redfern, reached out for a chat on the sidelines of the Energy Disruptors conference in Calgary. He described the technology - which pumps fluid through a closed underground loop created using techniques developed in the Alberta oil sands industry - claiming that it could generate power at a cost below solar or wind power.
I was sceptical. Solar and wind power were starting to get really cheap - below 5c/kWh - and I couldn’t see closed loop geothermal getting close to that.
However, I was also intrigued. Closed loop geothermal offers a very different value proposition to wind and solar. It isn’t weather-dependent. It uses a tiny fraction of the land area. It can flex up and down to follow demand. In fact, it can act as a type of storage (when you stop the generators, heat continues to flow into the fluid loops below ground, for use later). The heat it produces can be used directly in industry or district heating. And it is built by people whose jobs are at risk from the clean energy transition. So I suggested to John that he might focus his pitch more on value and less on cost, and thought not much more about Eavor.
Fast forward to April 2020, the second month of the Covid lockdown. Once again, John reached out, this time to invite me onto video call (using this whizzy new thing called Zoom) in order to give me an update and ask me to help create an Advisory Board. We spoke for two hours, until I couldn’t think of any more reasons to say no to him.
Closed loop geothermal is one of the very few innovations that could bend the curve meaningfully towards a clean energy future. And Eavor is the out-and-out world leader.
In the following months I helped John pull together a group of advisors - and I want to take this opportunity to offer my thanks to all its former members, from whom I learned a huge amount. This is a long-awaited moment for all of us!
A walk-on part in Eavor’s success
The advisory board’s main job was to listen to John and his incredibly able team, and occasionally help them structure their thoughts. Should Eavor consider a TopCo/ProjectCo structure to lower its average cost of capital (yes). Should Eavor devote business development resources to serving the headline-grabbing hydrogen sector (no). How should Eavor prioritise the hundreds of potential projects around the world that could use its technology (rigorously). How might Eavor best approach with European and multilateral investors (proactively); that sort of thing.
Eavor needed to be on the radar screens of the main energy modelling groups. I knew that once they saw what closed loop geothermal could do for energy systems - even in theory - they would start tracking the technology, which would be the first step in persuading policy-makers in places like Europe and Singapore that geothermal was not just a niche technology for countries on the volcanic “Ring of Fire”.
I introduced the company to Professor Jesse Jenkins, one of the leading energy system researchers in the US, and he coauthored a paper in October 2021 demonstrating that for the United States Western Interconnection power transmission grid “Flexible Eavor-LoopTM operation… reduces annual total system cost by up to $20B (21%) in a base case and up to $403B (81%) in an extreme case. Inclusion of Eavor-LoopTM also reduces land use required by up to 49%, saving 25 acres in a base case and 48 acres in an extreme case for each megawatt of Eavor-LoopTM installed.”
Jesse later joined the Advisory Board and has remained a strong supporter of the company and technology ever since:
On the media front, I tried to get the word out about closed loop geothermal in general and Eavor in particular. I participated in Think Geoenergy’s Pivot2020 event and aired an episode of Cleaning Up with John Redfern. I authored a piece for the New York Times - sponsored by Eavor - called The Energy Transition and the Quest for the Mythical Beast of Perfection, from which the image of the Eierlegende Wollmilchsau at the top of this post was taken.
I also engaged in a bit of light skirmishing on social media - for instance calling out an advisor to geothermal fracking company Fervo, who was persistently spreading FUD about closed loop geothermal. It turned out he was the CEO of a software company selling software to frackers. Surprise!
EGS vs AGS
Back in 2020, there was some awareness of the potential of next-generation geothermal, mainly focusing on Enhanced Geothermal Systems (EGS) - in other words fracking. Closed loop geothermal (also called Advanced Geothermal Systems or AGS) was flying below the radar, despite offering some very substantial advantages over EGS: no produced liquids or gases; no parasitic pumping load (because of the differential density of hot and cold liquids, the water pumps itself around the closed loop forever in what is called the thermosiphon effect once you get it moving, as has been proven by Eavor’s Eavor-Lite project, which ran from 2019 to 2024 with no pumping load); and above all much lower risk of seismic events - earthquakes, to you and me.
Closed loop’s disadvantage lies in its much slower heat transfer - rocks make great insulators - which means that to extract a significant amount of heat you need to do an awful lot of drilling. Each Eavor loop involves drilling four to five km down, which then spawn up to 12 pairs of laterals of three to four km, for a total of 90km. The Geretsried project required four loops, or a total of up to 360km of drilling.
At its heart, Eavor is a bet on improvements in drilling technology - deeper, faster, more precise, more automated and with fewer mistakes. If Elon’s tunnelling company is the Boring Company; Eavor needs to be the Very Boring Company.
Eavor is already competitive when it comes to the cost of heat - a very important fact given the need for Europe to get off the coal and gas (especially from Russia) that has historically powered a lot of its CHP plants. However, in order to generate affordable electricity, innovation is going to be key. Geretsried saw the deployment of a number of pioneering technologies like Insulated Drill Pipe, Active Magnetic Ranging, and Rock-Pipe™ sealant in order to reduce cost, improve precision, and extend reach in high-temperature environments. These and other innovations have already enabled Eavor to demonstrate very substantial learning effects as it racks up experience in creating its long underground closed loops.
Geretsried
When the Geretried project began, I was invited to moderate panel discussions at the official launch event in August 2023 - a day which turned into a bit of a protocol nightmare when Germany’s SDP Chancellor Olaf Scholz, Bavarian CSU state premier Markus Söder and populist Bavarian FW economics minister Hubert Aiwanger all turned up to share the spotlight.
Given this history, you can imagine my delight at the news that Eavor’s Geretsried project has finally gone live, and is feeding power into the German grid. The plan is to generate 8.2MW of power and 64MW of heat, enough for up to 20,000 homes.
As so often when when scaling up pioneering technology, things did not go 100% smoothly. The Geretsried breakthrough is a testament to John Redfern and his successor as CEO Mark Fitzgerald, who took over when John stepped down for personal reasons in October this year, and the whole Eavor team (Neil Ethier, Robert Winsloe, Janine Vany, Bailey Schwarz, Matthew Toews, Paul Cairns, Malcolm Ross, Eric van Oort, and too many others to name).
It has been a pleasure working with all of them, and an honour to have played a tiny part in their success so far. There is a long way to go, but last week was an important validation of their vision, skills and persistence.
Last week’s milestone is also a testament to the foresight of Eavor’s financial backers: Vickers Venture Partners, BDC Capital, bp Ventures, Chevron Technology Ventures, BHP Ventures, Eversource, Temasek, Canada Growth Fund, European Investment Bank, Japan Energy Fund, Chubu Electric Power, Kajima Corporation, Microsoft Climate Innovation Fund, OMV and others. Eavor is going to need to raise a lot more finance before it becomes the global, cash-generating, emissions-cushing machine the world needs to see. I trust all of you are ready for that journey!
Everyone involved, and everyone who wants to see a clean energy future, should savour last week’s win, and then it’s onwards and upwards! Or, given Eavor’s plans for some very deep geothermal wells, I should probably say “onwards and downwards!”
Selah
Disclosure: I have been an advisor to Eavor Technologies and own a few share options. I remain a friend of the company, although I no longer chair a formal advisory board on their behalf.
You write 8.2 MW heat and 64 MW heat. I assume it’s 8.2MW electricity, so this is a plant that’s mostly focused on heat output? Is it economical to scale back production in the summer when solar peaks and less heat is required? Also, what’s the temperature the plant runs on?
This could be geothermal’s moment, although I’m still curious about the economics.