• Gislihauksson-heimasida

CITY A.M: Time for the business world to get serious about geothermal power

This article was published by CITY A.M on the 1st of February 2018

2.2.2018 Media Coverage

London daily newspaper CITY A.M. has published an article by Gísli Hauksson, Chairman and Co-founder of GAMMA Capital Management, on the transformative potential of geothermal energy.

CityAMgeothermal

This century has seen the most temperature records broken in recorded history: sea levels are rising at their fastest rate in 2,000 years, the ocean is a quarter more acidic than before the Industrial Revolution, and Arctic Sea ice coverage has been shrinking since the 1970s.

Despite these warnings, modern society remains dependent on exhaustible resources to power economic growth. A shift to renewable sources of energy is more than just a matter of environmentalist indulgence: it's a matter of economic subsistence

Wind and solar have dominated new investment in renewables in recent years, receiving handsome government subsidies and benefiting from technological advances, but while they are a welcome addition to the energy mix, they have one critical drawback: resource volatility.

Unless the sun is shining, or the wind is blowing, these renewables have a hard time producing power. Indeed, intermittency is one of the most common arguments against the global shift to renewables.

Without costly batteries, wind and solar alone are unable to meet the minimum continuous level of demand on any electrical grid.

This is where geothermal energy can play a critical role. It is available at any time and at any place in the world, and it can deliver constant base load power with a minimal environmental footprint and negligible visual impact.

Although we don't feel it at surface level, 99 per cent of the Earth actually has a temperature above 1,000°C, which translates to an internal heat content multiple times annual worldwide energy consumption.

Geothermal plants drill down into the Earth's crust and use this natural thermal energy to heat houses or generate steam to turn a generator's turbines. Tapping into just a tiny fraction of that energy could put a significant dent in our fossil fuel dependency.

Although it currently constitutes a small fraction of the global energy mix, geothermal power is no mere pipedream. Over 13 gigawatts of geothermal power are currently installed globally, across 24 countries – generating slightly less than Denmark's entire capacity.

Iceland, a global leader in renewable energy production, has been using geothermal energy in one shape or another since the ninth century, and it currently meets almost a third of the country's power consumption and 90 per cent of its heating needs.

Existing drilling technology remains the biggest challenge to tapping the enormous potential of geothermal. In order to reach the necessary temperatures to generate electricity, geothermal wells need to be drilled into the Earth's crust. Outside volcanic areas, drilling would be required to depths well in excess of 5km, which has historically posed technical challenges.

The last decade has witnessed great strides in drilling technology. So-called deep drilling will allow power plants to harness geothermal energy in cold regions, while also improving energy extraction in volcanic regions.

The oil industry has been able to drill wells up to 12km deep using new technology and similar advances are being deployed in geothermal exploration. In 2017, the Icelandic Deep Drilling Project at Reykjanes successfully drilled a well at a depth of 4.65km, reaching supercritical fluids at 427°C.

Now is the time for the business world's attention to divert to the potential transformative impact that geothermal could hold. Momentum is growing with prominent climate change thinkers, such as Bill Gates, throwing their weight behind increased geothermal investment.

Geothermal energy already forms the backbone of power production and heating in many volcanic areas around the world. If drilling technology continues to advance at its current momentum, geothermal will become an increasingly competitive alternative to traditional power plants globally.

It's time for investors and businesses to embrace geothermal, and power the world's long-term economic future.

This article was published by CITY A.M. on the 1st of February 2018: www.cityam.com/time-business-world-get-serious-geothermal-power