(Oil Price) – Fracking techniques perfected in the U.S. shale patch could help drill for deeper and hotter geothermal energy resources and slash geothermal costs to make this low-carbon energy source competitive to other clean energy solutions, the International Energy Agency (IEA) said on Friday.
Recent advances in horizontal drilling and hydraulic fracturing, “honed through oil and gas developments in North America,” are now opening a new potential for global geothermal energy, the agency said in its report ‘The Future of Geothermal Energy’.
Currently, geothermal energy meets a tiny share of global energy demand, at less than 1%. The use of geothermal energy is concentrated in a handful of countries with easily accessible and high-quality resources, including the United States, Iceland, Indonesia, Turkey, Kenya, and Italy.
But if advances in drilling and higher engagement from the oil and gas industry and policymakers proceed, geothermal could end up meeting up to 15% of global electricity demand growth to 2050, the IEA said.
The oil and gas industry could play a key role in unlocking geothermal resources—by both providing fracking expertise and boosting investments in the sector, according to the Paris-based agency.
“Up to 80% of the investment required in a geothermal project involves capacity and skills that are common in the oil and gas industry,” the IEA said in the report.
Higher engagement from policymakers and help from the oil and gas industry can lead to a significant fall in geothermal costs.
The IEA estimates that, with the right support, costs for next-generation geothermal could fall by 80% by 2035.
“At that point, new projects could deliver electricity for around USD 50 per megawatt-hour, which would make geothermal one of the cheapest dispatchable sources of low-emissions electricity, on a par or below hydro, nuclear and bioenergy,” said the agency.
“At this cost level, next-generation geothermal would also be highly competitive with solar PV and wind paired with battery storage.”
By Tsvetana Paraskova for Oilprice.com
