Geothermal is having a moment. Here’s how the Foundation for Energy Security and Innovation can make sure it lasts.
Geothermal energy is having a moment. The Department of Energy has made it a cornerstone of their post-BIL/IRA work – announcing an Enhanced Geothermal Earthshot last year and funding for a new consortium this year, along with additional funding for the Frontier Observatory for Research in Geothermal Energy (FORGE), Utah’s field lab.
It’s not just government – companies hit major milestones in commercial applications of geothermal this year. Fervo Energy launched a first-of-its-kind next-generation geothermal plant, using technology it developed this year. Project Innerspace, a geothermal development organization, recently announced a partnership with Google to begin large-scale mapping and subsurface data collection, a project that would increase understanding of and access to geothermal resources. Geothermal Rising recently hosted their annual conference, which saw record numbers of attendees.
But despite the excitement in these circles, the uptake of geothermal energy broadly is still relatively low, with only 0.4% of electricity generated in the U.S. coming from geothermal.
There are multiple reasons for this – that despite its appeal as a clean, firm, baseload energy source, geothermal has not exploded like its supporters believe it can and should. It has high upfront costs, is somewhat location dependent, and with the exception of former oil and gas professionals, lacks a dedicated workforce. But there are a range of actors in the public and private sector who are already trying to overcome these barriers and take geothermal to the next level with new and creative ideas.
One such idea is to use DOE’s newly authorized Foundation for Energy Security and Innovation (FESI) to convene philanthropy, industry, and government on these issues. At a recent FAS-hosted workshop, three major, viable use cases for how FESI can drive expansion of geothermal energy rose to the surface as the result of this cross-sector discussion. The foundation could potentially oversee: the development of an open-source database for data related to geothermal development; agreements for cost sharing geothermal pilot wells; or permitting support in the form of technical resource teams staffed with geothermal experts.
Unlocking Geothermal Energy
DOE’s Foundation for Energy Security and Innovation (FESI) was authorized by the CHIPS and Science Act and is still in the process of being stood up. But once in action, FESI could provide an opportunity for collaboration between philanthropy, industry, and government that could accelerate geothermal.
As part of our efforts to support DOE in standing up its new foundation with the Friends of FESI initiative, FAS is identifying potential use cases for FESI – structured projects that the foundation could take on as it begins work. The projects must forward DOE’s mission in some way, with particular focus on clean energy technology commercialization. We have already received a wide range of ideas for how FESI can act as a central hub for collaboration on specific clean energy technologies; how it can support innovative procurement and talent models for government; or how it can help ensure an equitable clean energy transition.
In early October, FAS had the opportunity to host a workshop as part of the 2023 Geothermal Rising Conference. The workshop invited conference attendees from nonprofits, companies, and government agencies of all levels to come together to brainstorm potential projects that could forward geothermal development. The workshop centered on four major ideas, and then invited attendees to break out into small groups, rotating after a period of time to ensure attendees could discuss each idea.
The workshop was successful, adding depth to existing ideas. The three main ideas that came out of the workshop – an open source geothermal database, cost sharing pilot wells, and permitting support – are explored in more detail below.
Open-source database for subsurface characterization
One of the major barriers to expanded geothermal development is a lack of data for use in exploration. Given the high upfront costs of geothermal wells, developers need to have a detailed understanding of subsurface conditions of a particular area to assess the area’s suitability for development and reduce their risk of investing in a dead end. Useful data can include bottom hole temperatures, thermal gradient, rock type, and porosity, but can also include less obvious data – information on existing water wells or transmission capacity in a particular area.
These data exist, but with caveats: they might be proprietary and available for a high cost, or they might be available at the state level and constrained by the available technical capacity in those offices. Data management standards and availability also vary by state. The Geothermal Data Repository and the US Geological Survey manage databases as well, but utility of and access to these data sources is limited.
With backing from industry and philanthropic sources, and in collaboration with DOE, FESI could support collection, standardization, and management of these data sources. A great place to begin would be making accessible existing public datasets. Having access to this data would lower the barrier to entry for geothermal start-ups, expand the types of geothermal development that exist, and remove some of the pressure that state and federal agencies feel around data management.
Cost sharing pilot wells
After exploration, the next stage in a geothermal energy source’s life is development of a well. This is a difficult stage to reach for companies: there’s high risk, high investment cost, and a lack of early equity financing. In short, it’s tough for companies to scale up, even if they have the expertise and technology. This is also true across different types of geothermal – just as much in traditional hydrothermal as in superhot or enhanced geothermal.
One way FESI could decrease the upfront costs of pilot wells is by fostering and supporting cost-share agreements between DOE, companies, and philanthropy. There is a precedent for this at DOE – from loan programs in the 1970s to the Geothermal Resource Exploration and Definition (GRED) programs in the 2000s. Cost-share agreements are good candidates for any type of flexible financial mechanism, like the Other Transactions Authority, but FESI could provide a neutral arena for funding and operation of such an agreement.
Cost share agreements could take different forms: FESI could oversee insurance schemes for drillers, offtake agreements, or centers of excellence for training workforces. The foundation would allow government and companies to pool resources in order to share the risk of increasing the number of active geothermal projects.
Interagency talent support for permitting
Another barrier to geothermal development (as well as to other clean energy technologies) is the slow process of permitting, filled with pitfalls. While legislative permitting reform is desperately needed, there are barriers that can be addressed in other ways. One of these is by infusing new talent: clean energy permitting applications require staff to assess and adjudicate them. Those staff need encyclopedic knowledge of various state, local, tribal, and federal permitting laws and an understanding of the clean energy technology in question. The federal government doesn’t have enough people to process applications at the speed the clean energy transition needs.
FESI could offer a solution. With philanthropic and private support, the foundation could enable fellowships or training programs to support increased geothermal (or other technological) expertise in government. This could take the form of ‘technical resource teams,’ or experts who can be deployed to agencies handling geothermal project permitting applications and use their subject matter knowledge to move applications more quickly through the pipeline.
The Bottom Line
These ideas represent a sample in just one technology area of what’s possible for FESI. In the weeks to come, the Friends of FESI team will work to develop these ideas further and also start to gauge interest from philanthropies in supporting them in the future. If you’re interested in contributing to or potentially funding these ideas, please reach out to our team at fesifriends@fas.org. If you have other ideas for what FESI could work on or just want to keep up with FESI, sign up for our email newsletter here.
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