BP and Chevron made a historic expansion in geothermal energy on Tuesday, betting on a new technology that could prove to be the world’s first scalable clean energy derived from a constant source: the earth’s natural heat,
The two largest oil companies led a $ 40 million financing round with a Canadian geothermal energy company called Eavor. Based in Calgary, Eavor pioneered a new form of technology that could be deployed in many places around the world.
The investment marks a major shift to an area that would otherwise be ignored by energy companies, which have largely turned to wind and solar projects in their efforts to diversify fossil fields.
It is BP BP’s first investment in geothermal energy,
and a re-entry into the Chevron CVX field,
that sold its geothermal assets in 2016.
Previously, Eavor only accepted angel investment and venture capital. The $ 40 million injection will be used in research and development to help scale the power system to be price competitive.
Read too: Even with $ 1.1 trillion firepower, this fund is struggling against rivals to get its hands on green energy opportunities
“We see Eavor’s potential to complement our growing wind and solar portfolios,” said Felipe Arbelaez, senior vice president, zero carbon energy at BP. “Technology like Eavor’s has the potential to provide geothermal energy and heat and help unlock a low-carbon future.”
Eavor has developed a new type of geothermal technology that, in very simple terms, creates an underground “radiator”.
The Eavor Loop consists of a closed circuit network of tubes normally installed 3 to 4 kilometers below the earth’s surface, originating and ending in the same installation above the ground. The tubes are installed using advanced drilling techniques perfected in the oil patch.
The liquid travels in the pipes of the installation above the ground through the warm underground environment, before circulating naturally back to the top of the circuit. The hot liquid is then converted to electricity or transferred to a district heating network.
A major advantage of this type of energy is that it is constant, providing a basic charge of electricity to a grid system without requiring challenging intermittent solar and wind battery solutions.
Photos of a virtual tour of Eavor’s full-scale prototype.
Photo courtesy of Eavor.
Unlike hydroelectricity, which depends on large sources of constant water flow, it is designed to be scaled, and Eavor envisages probes installed under fields of solar panels and in regions with limited space like Singapore.
Geothermal energy has existed for decades, enjoying a period of expansion in the 1970s and 1980s, before it largely fell into the spotlight in the 1990s. Based on the heat below the earth’s surface, it has long been an attractive proposition for oil and gas companies, which have central experience in underground exploration and drilling.
The problem is that conventional geothermal technology depends on the discovery of hot water sources in the subsoil, making them expensive, risky and rare bets. More recent advances are rooted in the shale oil boom and use fracturing techniques to actually create the underground reservoirs needed to generate energy. But this can pose a problem from an environmental and sustainability point of view.
Eavor’s solution does not require the exploratory risk of traditional geothermal energy or disorganize the Earth in the same way as fracking geothermal.
Most: Tesla and other automakers will be impacted by Boris Johnson’s new electric vehicle plan. see how
John Redfern, president and chief executive of Eavor, told MarketWatch that the predictability of the system, established in field tests in partnership with Royal Dutch Shell RDSA,
it is repeatable and scalable, making it much like wind and solar installations.
“We are not an exploration game like traditional oil and gas or traditional geothermal. We are a repeatable manufacturing process and, as such, we don’t need the same rate of return, ”said Redfern.
“Even before we build the system, unlike a traditional oil or geothermal well, we already know what the results can be. Once installed and working, it’s super predictable, ”said Redfern. “So you can finance these things just like wind and solar energy, with a lot of debt and very low interest rates.”