The issue with most renewable technologies is always “How do you scale it fast?” and geothermal is no different. It is why, until now, Rethink Energy has never pushed hard at reaching a forecast for geo technologies.
Talking this week to Daniel Mölk, Managing Director at Eavor (pronounced Ever) in Germany, we could see how the company’s trajectory had convinced a dyed in the wool traditional geothermal guy from Iceland, with 17 years in the business, that there was another way.
Essentially Eavor has espoused a form of Geothermal that does not rely on finding an underground aquifer (water supply) and does not require massively high heat differences between the surface and underground. Essentially you can put one of the Eavorloop installation virtually anywhere on the planet.
Eavor has even proved this by putting its pilot installation in Alberta Canada in 2019, in difficult to seal sandstone – the down boreholes are lined with steel, but once the holes change direction and fan out like a big underground radiator – then a sealant is applied, just a type of solution, which creates a rock pipe underground, and the entire system is a closed loop, and it is filled with plain old tap water.
You can see from the pictures of the Alberta pilot that the equipment is no more intrusive than drills used to put foundations in for high rise buildings, seen in city centers everywhere. The footprint of the up top Rankine Cycle Engine will eventually define how much space it uses – significantly less than solar, and potentially around the same as single Wind Turbine – which has about half of the generation potential.
The last time we did a piece on Eavor it was in early 2021 when it got $40 million of funding, much of its from BP and Chevron, and it had its pilot based on a lite version of the Eavorloop 1.0 design. Although Mölk doesn’t discuss this transition in detail, he accepts that the first three years of the company’s life were spent getting the technology right and patenting it, but we can see from interrogating the company’s website that the design has changed somewhat.
It has gone from being a 2 kilometer cold down pipe, with two lateral connections and one returning hot pipe, into the diagram below. 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 are a total of 12 of these, which means some 90 km of downhole well and lateral length. This is a big drilling job.
Our take on it at Rethink is that this redesign was what it took to give the design a chance of being bulk standard, offering sufficient energy and at the same time reaching a Levelized Cost of Electricity (LCOE) of between $50 to $70. Of course the key to that, as is the key to all drilling operations, is how cheaply can you drill a meter of rock – and here we note that NREL has completed an extensive assessment of the technology which takes examples of drilling achievements from other large specialists in fracking and traditional geothermal circles.
The innovation that Eavor brings to this is to drill both holes at once and to continually operate two drills in parallel. These drills have radio communication between one another so that they always know where each other is, and where the other drill head has already been, so they cannot inadvertently cross.
NREL’s report says that in order to get the cost of electricity below $70 per MWh it requires a geothermal gradient of 60°C per kilometer and lateral drilling cost below $400 per meter which in turn implies a drill bit life of 50 hours of drilling as a minimum, and while it agrees that this has been achieved elsewhere, it remains unsure and says that “it is unclear if these conditions are still valid for drilling the Eavorloop 2.0 laterals because they go to a vertical depth of 4 km to 7.5 km through rock temperatures up to 460°C. As we said Eavorloop 2.0 is very different from the lite version.
The NREL paper also suggests that a big enough Rankine Engine will set the buyer back $21.5 million, drilling the laterals might cost as much as $50 million, and drilling the two original boreholes another $10 million – for a total of around $81.5 million – all for a single load of 9 MWe or up to 65 MW thermal capacity.
The Eavor test site was a 2.4 km deep U-loop configuration with two horizontal laterals of 1.7 km length each, with a bottom-hole temperature of only 78°C, and the thermal output was just 800 kWth – so the variation from the pilot to the completed Eavorloop 2.0 is considerable.
Mölk is in charge of the latest European site that Eavor is building in Germany which will adhere to this new format and here he reminds us “that the first Tesla was not cheap and cost several hundreds of thousands of dollars, and it was not perhaps until the 7th or 8th Car before the cost came down.” More likely the cost of the first Tesla was several $millions and it was not until the 700th or 800th car that thing swung into profit, but we get his point.
Mölk takes all of this history as a given, and is happy to confess that the site he is working on will have an LCOE of $252 per MWh – but emphasizes “we have multiple paths to get this down to $50 to $70. He also tells us that in funding terms, we have missed a round, which was led by Chubu Electric Power of Japan for a further $30 million just last month, and that the company is already preparing for its Series B funding round which is likely to be much larger. Already the company has soaked up over $100 million in funding.
Chubu Electric is clearly interested in any technology that could potentially lead to Japan not paying through the nose for fuels forever for its energy supply. Today it is the largest importer of natural gas after China, which has just overtaken it, which explains its passion for nuclear in the past. Both Japan and Korea has similar low native supply of fuels and deep water surrounding them making sea bed offshore wind farms virtually impossible, forcing the country into renewables which float – solar on land lakes and wind in the sea, as its only way to get off natural gas imports.
Mölk is animated on the topic – “As soon as people realize that Eavor has a small footprint, provides virtually permanent dispatchable power and can provide energy security, they become very interested.
“It used to be that we would push the dispatchable feature of geothermal, now after Russia’s war with Ukraine, it is energy security that attracts especially European interest.”
Mölk tells us that Eavor has 6 licenses to build systems in Germany, and another each in Italy and in the Netherlands and several conversations in Eastern Europe, which demonstrates that instead of talking about “turning points in the 2030 timeframe, Eavor is accelerating to production levels now.
But what about scaling? “We will build some of these ourselves and then license larger companies with our intellectual property,” says Mölk. This is the first time Rethink Energy has come across a renewables business that completely understands that this is the best way to come to the aid of the climate crisis, but also the best way to scale and “take” the geothermal market. It is clear that its existing investors and partners can take it into the US, Europe and Japan already – and that has happened since we last wrote about the company 18 months ago.
Mölk is at pains to point out that geothermal output is not automatically electricity and that every town with more than 80,000 people in Northern Europe has a district heating program, which for the most part now uses fossil fuels – roughly half of which are coal, and half natural gas, so that many installs for Eavor will be highly efficient, not limited in round trip efficiency by a Rankine Engine. On the other hand fossil fuel plants across Europe have the same heat to electricity round trip penalty as geothermal, so nothing much is being lost there.
The NREL technical paper makes it clear that the initial website message from Eavor, that the Earth is a giant battery, just waiting for energy to be taken from it, is true. The speed of flow of water from the lower thermal drills, up to the surface can also be slowed, and this has the effect of making the water in the lower pipes even hotter, which means more power can be drawn from it later by speeding it up. So the system can act as a battery as well as a dispatchable generator.
One key advantage over other geothermal technologies is that Eavor uses thermosiphoning – the differing temperatures of the water – the cold being poured back down, and the hot rising – creates a natural convection movement so no pump is required. The rock heats the water through conduction, and the width of the drill bores and the rate at which surrounding rock re-heats the rock after it has heated the water, can be calculated for maximum efficiency and the thermosiphon effect.
This means that there is no variation of the power output – making electricity from it dispatchable – unless the plant deliberately slows the movement of the thermosiphon.
The latest press release from the company was at the end of October, which said that work has begun on the first German site in Geretsried. While Mölk is not clear on how long this will take, the impression is that this is under a year, after which Eavor will have a fully functioning reference site for Europe, which can be visited by eager states which want to lower their exposure to natural gas. Large industrials interested in taking a license will have similar easy local access, so we are looking forward to the signing of Eavor’s first deal licensing this approach to large German industrials who are used to drilling for a living. This first site is purely for power generation, though clearly others will be drilled for heat distribution and storage. KCA Deutag is providing the two rigs for this drilling.
Another aspect of this technology is that the vertical drill holes can be repeated 50 meters apart – so for instance four sets of holes could be drilled at 90 degrees from each other, with the laterals each heading away from one another. That could easily lead to 4 such installations tightly knitted close together. Mölk tells us that even more can be placed close together.
“Think of us as a drilling gigafactory,” says Mölk, “That’s how we think of ourselves. Our job is to drive down the costs of completing this type of drilling,” and he goes on to suggest that geothermal can make up between 10% and 20% of global electricity and it is the company’s plan that from 2024 onwards to begin scaling to those kinds of numbers.
“This is not science fiction, we have shown in the past 5 years that this can be done, now we have to get on and do it.”
If Mölk is right, it is the first geothermal company that sees things this way. Most of them believe they will scale doing all the work themselves, one project at a time, but Eavor really has this genuine belief that it will solve the puzzle and by filing strong IPR rights, it can license the process to lots and lot of companies who are currently involved in fracking and other forms of drilling, as that side of their business begins to fade. It is true, there are lots of oil services businesses around the world who have the ability to make this scale.
Rethink energy will probably now have to think about a separate forecast for geothermal in the coming months, if this type of business model begins to take off.