Decarbonisation Technology - August 2023 Issue

Geothermal power plant

( Source: SPE Aberdeen )

increasing their funding for the sector, this power source is currently going from strength to strength. The International Energy Agency (IEA) expects geothermal power generation to increase to 857 terawatts per hour (TWh) by 2050 (IEA, 2020), an 800% increase compared to the 94 TWh generated in 2020 and, according to Rystad Energy, geothermal investment is expected to reach USD 85 billion between 2020 and 2030 (Rystad Energy, 2023). But what are the main drivers for adopting geothermal energy as a cleaner energy source, and how can it support the wider industrial decarbonisation? Geothermal energy is one of the most reliable, sustainable, and potentially efficient energy sources available and is theoretically accessible everywhere in the world. As businesses transition away from fossil fuels, it is imperative for stakeholders that whatever clean energy alternative they turn to is secure and reliable. Unlike many other low- carbon solutions, geothermal production is not affected by the weather, which gives consumers confidence that they will have access to green energy at all times. Beyond this, it is one of the few renewable power sources that can be switched on and off, meaning it can manage peak demand. Another key aspect of geothermal which What benefits are associated with geothermal for decarbonisation?

makes it attractive for decarbonising business is its low lifecycle cost curve. With many geothermal power generation facilities being located close to their source, producers and consumers do not have to worry about the costs typically associated with alternative energy sources such as transportation and storage. Also, a geothermal plant has a very small footprint. Moreover, geothermal is one of the few clean energy sources cost-competitive with fossil fuel. A recent study by Lazard revealed that contrary to popular opinion, geothermal energy is cost competitive with both solar and wind (Lazard, 2023). While at face value, these more popular forms of energy appear more cost- effective, there are significant supplementary costs associated with batteries required for both storing energy when it is needed and their lack of consistency. Battery, solar, and wind have had decades of reducing costs due to economies of scale and technological advances. However, all are currently experiencing cost increases due to shortages in critical raw mineral supply. As traditional resources are being depleted, the effects of historic under-investment in mineral exploration are becoming more apparent. Geothermal energy has avoided the price volatility other sources of energy have faced in previous years, making it, for the first time, the cost-competitive option for businesses looking to decarbonise.