Geothermal Weekly - #6
Hot Highlights for the early-mid part of December! Includes a new IEA report, geothermal leasing auction results, ITC rulings, and a share selloff by key stakeholders in a major geothermal developer
Hi folks, happy 2025! This one covers a bit more of the news from mid-December. The next one will cover the last two-ish weeks of December and then back to your normally scheduled weekly updates.
🌡️ Hot Highlights
New Project Announcements:
Gradient Geothermal is studying the feasibility of converting 9,000-foot-deep, abandoned oil wells near Pierce, Colorado, into a geothermal heating system for local homes, businesses, and even sidewalks. By reusing existing wells, the project could cut costs, reduce emissions, and help stimulate the local economy.
Underground Resource renewable energy company Arverne Group, along with its subsidiary DrillHeat, is installing 11 geothermal probes at a depth of approximately 200 meters for its new headquarters in Pau. The probes will be connected to a geothermal heat pump, providing heating and cooling for a 2,700m² office building set to open in early 2025. The system will be powered by a rooftop solar array, ensuring 100% renewable energy for the facility.
The Velika Gorica geothermal site (the VGGT-1 well) in Croatia is set to begin drilling mid-December and continue until July 2025. Funded by Croatia’s National Recovery and Resilience Plan, the 2900-meter-deep well aims to tap geothermal reservoirs at 2020 and 2770 meters, with expected water temperatures of 90°C, to support renewable heating needs. The Croatian Hydrocarbon Agency (AZU) awarded the contract for geothermal well drilling at the Velika Gorica, Zaprešic, Osijek, and Vinkovci to the drilling company Crosco.
Funded by the European Regional Development Fund (ERDF) via the state of North Rhine-Westphalia, the “MissElly” project will be deployed by the Fraunhofer Institute for Energy Infrastructures and Geothermal Energy (Fraunhofer IEG) and Voltavision at Voltavision’s new battery testing facility. To cool off process heat, the system will use cold stored in the ground during the winter and nights as opposed to power-intensive compression cooling.
Drilling of a geothermal doublet in Neuruppin, Brandenburg, has been completed, with over 65% of the town's district heating expected to be supplied with geothermal energy by 2027. Led by Stadtwerke Neuruppin GmbH, with drilling by Daldrup & Söhne AG and planning by Geothermie Neubrandenburg GmbH, the project has already received €10M in federal funding and plans to seek an additional €20M to subsidize plant operations. The next phase will focus on acquiring and installing heat pumps, with the potential to reduce heating costs by up to 2 cents per kWh.
New Research:
The International Energy Agency Director Faith Birol states that geothermal has the opportunity to provide massive amounts of stable energy for datacenters from innovations from Shale Revolution as the agency publishes its first geothermal energy report. The report highlights the lack of policy support for geothermal development and, if policies are implemented to derisk projects, investor appetites are likely to grow for the energy and heating resource. Development of the resource by oil and gas companies could further expedite growth. Current challenges namely relate to permitting red tape. Read the report here and the video below for more context.
Magma Power has secured its 14th and 15th US Patents. The patents cover a proprietary system designed to safely and efficiently drill to and extract geothermal energy from magma reservoirs. The team secured another patent earlier this year.
The Alberta Geological Survey has published the Geothermal Atlas of Alberta, providing geoscience data and information relevant to the assessment of Alberta’s deep geothermal energy potential. The web-based GIS application can be accessed here.
Global energy technology company SLB (NYSE: SLB) introduces Neuro™ autonomous geosteering, which dynamically responds to subsurface complexities to drill more efficient, higher-performing wells. Using artificial intelligence (AI), Neuro geosteering integrates and interprets complex real-time subsurface information to autonomously guide the drill bit through the most productive layer or “sweet spot” of the reservoir. During conventional geosteering operations, geologists must manually interpret this data to identify a well target, update the well plan and trajectory, and communicate this to the directional driller. Neuro geosteering does all of these steps end to end — without any human intervention.
New Partnership Announcements:
From the initial 11, the Geothermal Technologies Office (GTO) is supporting five communities in the second phase of its Community Geothermal Heating and Cooling initiative, providing $37.7 million to install geothermal systems. Selected locations include —Ann Arbor, MI; Chicago, IL; Framingham, MA; Hinesburg, VT; and Shawnee, OK. The projects are mainly focused on geothermal heating and cooling.
Fervo Energy’s most recent geothermal project is bringing economic growth and fresh opportunities to the small Utah town of Milford. The project is expected to create 200 construction jobs at its peak, with 15-30 expected to remain long-term, and has already boosted local businesses. However, challenges persist, including housing for incoming workers and concerns about ensuring the growth benefits the town sustainably. The broader Beaver County aims to diversify its economy while welcoming workers transitioning from the fossil fuel industry. Residents hope to leverage this opportunity to create a lasting renewable energy hub and strengthen the community.
Indonesian geothermal energy general developer Star Energy Geothermal (subsidiary of Barito Renewables Energy) has partnered with American IT company Kyndryl to integrate generative AI and cloud technologies in its operations to improve efficiency (specifically in IT operations related to failure prediction/reliability improvement, automation of routine tasks, and to migrate to Microsoft’s Azure Cloud).
The Presidio Municipal Development District has partnered with Exceed Geo Energy on a deep-well geothermal pilot project using supercritical carbon dioxide as a heat transfer medium, offering carbon sequestration and baseload power with minimal land use. In addition to geothermal electricity, the effluent heat is expected to be used for a variety of commercial and industrial applications. The pilot, expected online by 2025, follows Austin Energy's power purchase agreement with Exceed Geo Energy.
Multiple American universities have begun developing geothermal heating systems:
Smith College has completed the first phase of its $210 million geothermal heating project, replacing its outdated fossil-fuel heating system with a sustainable alternative that now provides geothermal heat to 19% of the square footage of the campus. Launched in May 2022, the project is being rolled out in phases, involving trenching, borehole drilling, and pipe installation to transfer heated or cooled water to three energy hubs. The first hub is operational with the completion of phase 1, with the second expected by summer 2025 and the final phase slated for completion in summer 2028.
Towson University has drilled two geothermal test wells to see if there is geothermal heating and cooling potential for the campus.
New Policy Announcements:
The U.S. Department of the Treasury released final rules on the Investment Tax Credit for clean energy that was extended as part of the Inflation Reduction Act (IRA). Most relevant to geothermal, for geothermal heat pumps, the final rules clarify that the owner of underground coils can claim the ITC if they own at least one heat pump used in conjunction with the coils. You can read more about recent political rumblings related to the IRA here.
The United States raised tariffs on Chinese-made solar wafers and polysilicon to 50% from 25% and duties on certain tungsten products from zero to 25%, effective on Jan. 1. In the last month, Washington also tightened restrictions on Chinese access to advanced semiconductor technology with Beijing banning exports to the U.S. of certain critical minerals needed to make computer chips, such as gallium, germanium and antimony in response. China also stepped up its controls on graphite exports to the U.S. Given China’s large role in supplying these materials to the U.S., the United States has been working to secure alternative sources in Africa and other parts of the world. In the meantime, however, this will likely have a larger impact on solar energy costs and broader renewable energy resources (including geothermal).
Initially mentioned in a draft document seen by Reuters, the EU has officially asked for member states to develop broader strategy on developing geothermal resources. The goal is to have these plans cover core issues to geothermal. Namely removing legal hurdles and streamlinging permitting processes, financing and derisking the development of shallow and deep geothermal resources, improving data resources for geothermal projects, in addition to developing a stronger geothermal workforce to meet climate goals and decrease fossil fuel reliance on foreign actors (i.e. Russia). Read more in depth here.
The US BLM completed a geothermal lease sale on December 28th, 2024 offering 3 parcels totaling 6,601 acres in Fishlake National Forest in Beaver and Millard counties in Utah. In total, only one parcel covering 1,677.73 acres sold for $6,912. Ormat Technologies secured the winning bid for just $2 per acre. Analysts for Project InnerSpace, a geothermal research and advocacy group, told Semafor the tepid auction was likely the result of the plots’ isolated, mountainous location and relatively low geothermal temperatures. The Notice of Competitive Lease Sale and proposed lease stipulations are available online at the BLM National NEPA Register. Broader leasing information for public lands at a state by state level can be found here.
Ormat is expecting to use the new acquisition to develop two new power plants near the existing Cove Fort facility in Utah. Exploration work on the first plant (Cove Fort 2) is expected to begin in 2025 and, pending resource availability. The project is expected to achieve a Commercial Operation Date in 2027. The second plant (Cove Fort North) will be developed at a later stage.
Source: https://eplanning.blm.gov/eplanning-ui/project/2033497/510 Republican U.S. Rep. Brett Guthrie of Kentucky has secured the chairmanship of the House Energy and Commerce Committee, which wields broad jurisdiction over issues affecting the daily lives of Americans. Having been on the committee throughout his stints in Congress since 2011, in recent year, he has shown favor towards increasing fossil fuel production, lowering environmental regulation, in addition to rolling back clean energy subsidies.
Utah Governor Spencer Cox has unveiled a budget proposal of $20 million to prepare the state for integrating nuclear reactors, along with an additional $4.2 million for geothermal energy. Of Utah’s electricity production in 2023, about 19% of Utah's total electricity generation came from renewable energy (the rest from fossil fuels). Of this, 8% came from geothermal energy. This investment will hopefully increase geothermal’s share of renewable energy production for Utah.
New Financial Announcements:
Ormat Technologies, Inc. (NYSE: ORA) (“Ormat” or the “Company”), a leading geothermal and renewable energy technology company, announced December 11th, 2024 the commencement of an underwritten secondary offering of an aggregate of 3,700,000 shares of its common stock on behalf of ORIX Corporation. Multiple insiders had sold off their shares in the days ahead as well including director Stanley Stern and director David Granot. This article may provide some insights into the broader situation.
OSSO, a leader in fluid temperature control and separation solutions, has achieved a milestone year, increasing its revenue by 50% and doubling its global workforce. These results are the outcome of targeted investments (£5M into fleet expansion with a focus on mud cooling capabilities to address the operational challenges of geothermal projects) and a strategic pivot into new markets, such as geothermal energy and construction, alongside an expanded presence in the Middle East.