Old Faithful Geyser in Yellowstone National Park.

+ Could shale gas wells also make it viable to exploit more geothermal resources?

Why isn’t geothermal energy used more widely? Until now, technological challenges and uncertainty for investors has held back this renewable resource. However, I think this is about to change as public policy worldwide shifts towards renewable heat and as the oil and gas industry drives improvements in drilling technology.

Successfully exploiting geothermal energy relies on finding sufficient heat in the ground, but also on this heat being readily transferable. In places like Iceland, Hawaii and Indonesia, heat at commercially viable temperatures for electricity production can be found relatively close to the surface.

In other countries, lower temperature geothermal resources are often used for heating buildings, greenhouses or entire cities through district heating schemes. Being able to replace a city’s heat demand with a sustainable and renewable resource makes a significant impact in colder parts of the world.  

Drilling a deep geothermal well several kilometres into the ground to exploit these resources is very similar to drilling an oil or gas well. The difference is that an oil or gas well delivers a commodity that guarantees a significant return on investment. The hot water flowing from a geothermal well provides a lower return on investment, making it less attractive to investors.

In countries like the UK, Spain, France, Germany and the East Coast of the US, where geothermal resources remain largely untapped, exploration risk is still high due to a lack of available data from deep wells. This is not an enticing prospect for investors, who remain unwilling to provide the capital investment needed to drill – trapping the industry in a difficult cycle to break out of.

Geothermal energy’s synergies with shale gas production could offer a way out. For a geothermal resource to be viable, you need both heat and permeable rock to pump water through. You often also need to improve the heat transfer from the ground to the power plant by using pressurised water to shear the rock – a broadly similar process to that used in the shale gas industry.

In fact, with some up-front design adaptations, shale gas wells could be converted into geothermal wells relatively simply. This would eliminate two of the major barriers to developing geothermal: the capital investment costs to drill the well and the exploration risk. Arup is working with innovative designers who are looking at ways to enhance single-well systems in this way.

Hydraulic fracturing (or ‘fracking’) remains controversial and many will argue that using shale gas wells for geothermal heat is unproven. I think the key to ensuring return on investment is matching the resource to demand. The most promising projects may be those that could connect to a nearby district heating network or supply heat to agricultural greenhouses, for example.

Such schemes would receive a boost from government programmes that provide incentives to exploit geothermal resources. These include the revised Renewable Heat Incentive in the UK, heat subsidies in Holland and so called heat uplifts in Germany and France.

In Europe, the geothermal market will become more attractive as investors begin to understand that there is a return on their investment in the form of heat, even if electricity production proves unsuccessful.