Enhanced geothermal power is finally a reality

Geothermal developer Fervo Energy has successfully brought online the first ever full-scale commercial power plant sourcing from enhanced geothermal systems (EGS) — a groundbreaking development both literally and figuratively. In this episode, Fervo CEO Tim Latimer discusses the company’s accomplishment and where flexible geothermal is headed.

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David Roberts

Traditional geothermal power, which has been around for over a century, exploits naturally occurring fissures underground, pushing water through them to gather heat and run a turbine. Unfortunately, those fissures only occur naturally in particular geographies, limiting geothermal’s reach.

For decades, engineers and entrepreneurs have dreamed of creating their own fissures in the underground rock, which would allow them to drill geothermal wells almost anywhere.

These kind of enhanced geothermal systems (EGS) have been attempted again and again since the 1970s, with no luck getting costs down low enough to be competitive. Despite dozens of attempts, there has never been a working commercial enhanced geothermal power plant.

Until now.

Last week, the geothermal developer Fervo Energy announced that its first full-scale power plant passed its production test phase with flying colors. With that, Fervo has, at long last, made it through all the various tests and certifications needed to prove out its technology. It now has a working, fully licensed power plant, selling electricity on the wholesale market, and enough power purchase agreements (PPAs) with eager customers to build many more.

EGS is now a real thing — the first new entrant into the power production game in many decades.

Here at Volts we are unabashed geothermal nerds, so naturally I was excited to discuss this news with Fervo co-founder and CEO Tim Latimer, an ex-oil-and-gas engineer who moved into geothermal a decade ago with a vision of how to make it work: he would borrow the latest technologies from the oil and gas sector. Ten years later, he’s pulled it off.

I talked with Latimer about how EGS works, the current geographical and size limitations, how he plans to get his technology on a rapid learning curve to bring down costs, the value of clean firm power, the future of flexible geothermal, and much more. This is a juicy one.

All right then, with no further ado, Tim Latimer. Welcome to Volts. Thank you so much for coming.

Tim Latimer

Thank you for having me.

David Roberts

Tim, this has been a long time coming. I've been tracking your adventures from afar for a few years now, and now you've reached a real milestone here, a real milestone for you, a real milestone for your company, a real milestone for geothermal power, which Volts listeners are like me, big fans of. So to help us appreciate the significance of the milestone in question, I want to back up a little bit and do some background first for listeners who have not, for whatever bizarre reason, heard my previous geothermal pods. So a couple of times we've talked and you've told me kind of this short, potted history of geothermal, the last couple of decades of geothermal, the sort of struggle to align the money and the attention and the technology and everything.

So maybe by way of starting just share that with our listeners, sort of like geothermal's struggles to take off in, say, like a post-2000 context.

Tim Latimer

Absolutely. Well, to do that, I probably have to explain a little bit about how geothermal works, which is straightforward in the idea, difficult in the implementation, but geothermal has been around for forever. The first geothermal power plant was built in Italy over 100 years ago. Major places like New Zealand, Iceland, and northern California built massive utility-scale power plants going back to the 70s and 80s. But essentially what happened is — as the choicest areas for drilling geothermal, the places that steam was literally coming out of the ground got tapped — we ran out of really good resources and technology couldn't keep up with the challenges needed to go deeper, go into less permeable areas, and still produce economic electricity.

So geothermal has been kind of a boom and bust industry. The big technology push for a long time was the idea of something called enhanced geothermal systems, which was a DOE-led effort going all the way back to the 1970s to try to incorporate things like hydraulic fracturing, advanced drilling techniques, better subsurface characterization, to try to solve that problem and let geothermal be a more widespread resource. But many of the early technical attempts came far short of expectations, and so the industry had fits and spurts a lot of unrealized promise that never came about. And kind of the two big waves recently, in the late 2000s, there was a big push to do more geothermal energy development. And you always think about what does it take for a new tech to actually get to market? Well, you got to have the technology there, you've got to have supportive policy, and you have to have market conditions that are ready to go. And so in the late 2000s, the market conditions were there. People started caring about carbon-free electricity for the first time in a really meaningful way. We saw state RPS targets come out. We also were in a world where people thought natural gas prices were going to be exceptionally high for a long time.

So people were concerned about how we were going to source electricity. And so there was huge demand for geothermal. And then between different initiatives like the loan program office and the R initiatives, putting funding into alternative energy resources in the late 2000s, geothermal really had a great moment. But what happened there is it was missing that third pillar, it was missing the technology area. So there were a lot of contracts signed, a lot of investment came into the space. There was supportive policy, but a lot of the visions of geothermal in the late 2000s sort of petered out as drilling results were underwhelming.

And as a result, it put us in this decade plus of time where there was not supportive policy in the US for geothermal, where there was not investment dollars coming in. And the irony of this whole thing is all of these drilling and subsurface methods that people had tried to make work for geothermal for 50 years, all of a sudden became viable and cheap and cost-effective because of the shale oil and gas revolution. So all of a sudden it wasn't expensive to drill horizontal wells and we could image the subsurface with high degrees of clarity, but for most of 2010s the new tech showed up and in an inverse of the tech was there, but there was no policy and there was no financing.

And so it's taken quite some time for this mix of better technology, supportive policy and market demand to coalesce. And it's really just been in the last couple of years where geothermal has finally had all the forces pulling together here.

David Roberts

Yeah, that's what we sort of tried to convey with my last pod with Jamie Beard on geothermal, just how everything's finally coming together. Right now, all the pieces of the puzzle are coming to place. It's a super exciting time. So I think most people get traditional geothermal power, right? You find an area where there's some sort of volcanic activity, which just means sort of tectonic plates rubbing on each other. So you have fractures underneath the ground and then you have water. When you push water through those fractures, it heats up. So you have one well where you push the water down, the water heats up in the fractured field and then comes back up the other well and you use it to generate electricity.

That is standard geothermal power. And as you say, that kind of geothermal power, which has been around for a long time, is confined to geographical areas where you find these fractures, where you find this sort of geological activity. So let's talk briefly about how to distinguish that traditional geothermal from the various other kinds we're hearing about now. There's a lot of terms flying around. So there's enhanced geothermal, there's super deep geothermal, there's closed loop geothermal. Maybe walk us a little bit through what is the technological landscape of beyond normal geothermal.

Tim Latimer

Yeah, so the nomenclature here, what the industry has kind of settled on, and the DOE uses this nomenclature, is that first type that you described, which is very descriptive, you know, Iceland, Kenya, northern California geothermal prospects. We call that hydrothermal. And hydrothermal is those areas that have natural high temperatures, natural high flow capacity, because there's these natural fractures and permeability in the reservoir and there's water to circulate. And those areas can be tapped with relatively traditional old school technology. That's why they were drilled out in the 1970s, even though we didn't have all these technology advancements, because the geology is just better suited for it.

Now, broadly, the umbrella of next generation geothermal is sort of any advanced technology method to go beyond those really shallow, high temperature, naturally high flowing resources and make them economic.

David Roberts

Is it the case that those natur