Canadian geothermal specialist Eavor (pronounced Ever) has just been awarded a €91.6 million grant to build a next-generation geothermal project in Bavaria south of Munich near the town of Geretsried, in Germany.
The grant is from the European Innovation Fund (EUIF) which in turn is powered by cash from the EU Emissions Trading System (ETS) and aims to create financial incentives for companies and public authorities to invest in next generation technologies.
The keys to the Eavor technology are that it is a closed loop, behaving like a sealed radiator going 7.5 kilometers into the ground, which can be built with existing oil and gas drilling equipment, and it can offer either electricity or hot water on a 100 year basis. It works on the principle of a natural thermosiphon requiring no pump and no aquifer, with clean fresh poured into the system when it has finished drilling. The water is heated by rock underground, which constantly refresh that heat from surrounding rocks.
We have recently been talking to executives at Eavor with a view to making a forecast in modern geothermal projects. This installation at Geretsried has been under way for a while, but the EU grant only just became official.
The Eavor technology is not quite at the stage where it is price competitive with renewable energy generation like solar, but it is getting closer by the day, as it goes through its learning curve. It is however already competitive when delivering heat to a district heating system and this project is expected to demonstrate both forms of energy from the same drilling. Key to its appeal is the baseload (constant output) nature of geothermal power and the idea that it offers energy security. Countries like Japan, which has had a perennial issue with getting off nuclear energy, has to problem of importing natural gas from all over the world, and its rising cost during the Russian war. Naturally Japan is interested in this technology too.
One recent funding round for $30 million was led by Chubu Electric Power of Japan and so far Eavor company has soaked up over $100 million in funding and will go to the market once again soon for more.
The first time we did a piece on Eavor it was in early 2021 when it got $40 million of funding, much of it from BP and Chevron, and it had its pilot based on a lite version of the Eavorloop 1.0 design. That relied on a 2 kilometer cold down pipe, with two lateral connections and one returning hot pipe. The technology is close to getting the levelized cost of electricity to $70 per MWh and for that it requires a geothermal gradient of 60°C per kilometer and a lateral drilling cost below $400 per meter which in turn implies a drill bit life of around 50 hours – all highly achievable.
The two kilometer drop has changed into one of up to 7.5 kilometers, and the lateral bores are now around 6.5 km each and there can be as many as 12 of these, which means some 90 km of downhole well and lateral length, which makes this one hell of a drilling job.
Construction began in October 2022, with drilling scheduled to start in July 2023 and two of Europe’s largest drilling rigs are already under a four-year contract with KCA-Deutag. An Organic Rankine Cycle power plant is being designed and constructed simultaneously with drilling operations in collaboration with Turboden, with the first energy production scheduled for Q4, 2024.
The output should be 8.2 MWe and we estimate that the grant is enough cash to build the entire system, hardly eating into Eavor’s funding. Eavor says this will power 20,000 homes with clean energy.
Eavor is keen to point out to us that every town with more than 100,000 people has a district heating system in Europe and that the hot water can be attached directly into these from an Eavorloop 2.0 design. That gives it around 79 towns to target in Germany, and as many as 460 in Europe. It says that it already has 8 projects in development in Europe.
Eavor’s master plan is to simply prove its technology with one or two projects and then license it to oil and gas companies, who behave rather like banks, and fund operations and would contract with drilling companies they already know, to scale this market not just in Europe, but around the world.