BP and Chevron made a major expansion in geothermal energy on Tuesday, betting on a new technology that could turn out to be the world’s first scalable clean energy from a constant source: the earth’s natural heat,
The two major oil companies have led a $ 40 million round of financing to a Canadian geothermal energy company called Eavor. Based in Calgary, Eavor has pioneered a new form of technology that could be deployed feasibly in many parts of the world.
Investment is a key move in an area ignored by energy companies, which have largely looked at wind and solar projects in their efforts to diversify from fossil fields.
It is the first investment in geothermal energy for BP BP,
and a re-entry to the field for Chevron CVX,
which sold its geothermal assets in 2016.
Eavor previously only accepted angel investments and venture capital. The $ 40 million injection will be used to continue researching and developing to help scale the energy system so that it is competitive in price.
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“We see Eavor’s potential as complementary to our growing wind and solar portfolios,” said Felipe Arbelaez, senior vice president of zero-carbon energy at BP. “A technology like Eavor’s has the potential to supply 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 loop network of pipes normally installed 3 to 4 kilometers below the earth’s surface, which originate and end at the same aerial installation. The pipes are installed using advanced drilling techniques perfected in the oil plot.
The liquid travels to the pipes from the upper installation through the warm underground environment, before circulating naturally to the top of the loop. The hot liquid is converted to electricity or transferred to a district heating network.
An important advantage of this type of energy is that it is constant, providing a base charge of electricity to a grid system without the need for challenging battery solutions of intermittent wind and solar energy.
Captures of a virtual tour of the large-scale prototype of Eavor.
Photo courtesy of Eavor.
Unlike hydroelectricity, which relies on large sources of constant water flow, it is designed to be climbed and Eavor provides platforms installed under fields of solar panels and in space-limited regions such as Singapore.
Geothermal energy has existed for decades, enjoying a boom period in the 1970s and 1980s before falling largely into the spotlight of the 1990s. Relying on the heat below the earth’s surface, it has long been an attractive proposition for oil and gas companies, which have basic experience in underground exploration and drilling.
The problem is that conventional geothermal technology is based on finding superorder underground water sources, making them expensive, risky and rare bets. The latest advances are rooted in the shale oil boom and use fracking techniques to actually create the underground reservoirs needed to generate energy. But this can pose a problem from an environmental and sustainable point of view.
Eavor’s solution does not require the exploratory risk of traditional geothermal energy nor does it disturb the earth in the same way that fracking-style geothermal does.
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John Redfern, President and CEO of Eavor, told MarketWatch that the predictability of the system, established in field trials in collaboration with Royal Dutch Shell RDSA,
it is repeatable and scalable, so it is very similar to wind and solar installations.
“We are not an exploration game like traditional oil and gas or traditional geothermal. We’re a repeatable manufacturing process, so we don’t need the same rate of return, ”Redfern said.
“Before building the system, unlike an oil well or traditional geothermal, we already know what the results may be. Once it’s up and running, it’s super predictable, “Redfern said.” So you can finance these things exactly like wind and solar, with a lot of debt at very low interest rates. “