The decline of North Sea oil slicks could make way for the geothermal boom

Europe’s North Sea oil and gas fields are in terminal decline. Last year, the oil basin produced 34 million tonnes of oil, the lowest level since production in the North Sea was established in the 1970s. Dozens of major oil companies have pulled out of the old oil basin, with production expected to continue to decline, despite the fact that the UK government has recently released a number of licenses since Russia’s invasion of Ukraine.

And now, European scientists are looking for ways to use the entire oil and gas infrastructure. Researchers at Edinburgh Heriot-Watt University’s Global Research Institute for ‘net zero and beyond’, iNetz+, explore how to reuse oil and gas wells for geothermal energy. According to experts, reusing existing infrastructure for geothermal energy offers numerous advantages. First, it is a cost-effective approach that avoids the impact on the environment and substantial expenditures for drilling new geothermal wells. They pointed out that these reservoirs are well understood, significantly reducing the risk of drilling new wells that might fail.

While this may sound new, open-loop systems that directly produce hot formation water for geothermal power have been successfully tested in the US, China and Colombia. The water content of produced fluids typically increases in the late stages of oil and gas production, making it possible to harness the energy from these brines for geothermal energy. Scientists have proposed the use of enhanced geothermal systems (EGS) where natural fluid flow is insufficient.

Geothermal boom

Last year’s COP28 climate summit in Dubai made history after becoming the first UN climate change agreement to require countries to cut fossil fuel consumption. Called the UAE Consensus, the summit also called on all parties to the United Nations Framework Convention on Climate Change (UNFCCC) to triple renewable energy generation capacity and double the rate of energy efficiency improvement by 2030 .Unfortunately, the reduction of fossil fuel-based energy production. is proving to be an onerous task at a time when demand for electricity is on the rise. The world is witnessing an unprecedented increase in the demand for electricity. Last year, the consulting firm Grid Strategies published a report titled “The era of flat energy demand is over,” which pointed out that grid planners in the United States—utilities and regional transmission operators (RTOs)—almost doubled their growth forecasts in their five-year demand forecasts. For the first time in decades, US electricity demand is projected to grow by up to 15% over the next decade, driven by artificial intelligence (AI), clean energy production and the cryptocurrency boom.

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The ongoing energy crisis has sparked a rush to develop more low-carbon power generation. One such source of energy is geothermal energy.

According to the US Department of Energy, the continental US has more than 100 GW of geothermal electricity capacity, or 40 times the current installed geothermal capacity, meaning that geothermal has the potential to supply 10% of the country’s energy needs. In Europe today, geothermal energy is only used to produce 1.5 GW of electricity, mainly in Iceland and Italy. However, it is estimated that up to the equivalent of 80-100 GW of geothermal energy is possible in Europe..

Unfortunately, the high costs of drilling and production compared to other clean energy sources have hindered the growth of the geothermal sector. According to the International Renewable Energy Agency (IRENA), The levelized cost of energy (LCOE) for geothermal energy has increased at a time when generation costs for other renewable sources have decreased. During 2010-2023, geothermal LCOE climbing 31% to $71/MWh, while solar PV fell 90% to $44/MWh, while onshore wind fell 70% to $33/MWh. LCOE calculates the present value of the total cost of building and operating a power plant over an assumed lifetime.

Enter “enhanced geothermal systems” (EGS).

EGS promises not only to increase well energy production in a smaller footprint, but also to increase the areas where geothermal energy can be tapped.

For the most part, geothermal only makes economic sense in countries like Iceland, where heat and water can be found close to the Earth’s surface. However, like shale drilling, EGS creates a system of underground fractures that increases the permeability of the rock and allows the injection of a heat transfer fluid (usually water). The injected fluid is then heated by the rock and returned to the surface to generate electricity. In June, the US Department of Energy announced a Investment of 165 million dollars in geothermal energy research and implementation. DOE’s Enhanced Geothermal Initiative aims to reduce the cost of EGS projects to $45 per MWh by 2035, thereby greatly increasing the competitiveness (and attractiveness) of geothermal energy. In addition, the bipartisan infrastructure law of 2021 included 84 million dollars for the research of EGS projects.

In Europe, financed by the EU The GEORISK project worked to record and mitigate the risks associated with new geothermal projects in an attempt to attract private investment in the industry. GEORISK is a large-scale collaboration between key stakeholders in the geothermal industry across Europe. The team developed a new tool, which ranks the risks of proposed projects, including external hazards from natural or man-made factors, risks due to underground uncertainties and potential technical problems. The project helped European countries develop financial risk mitigation frameworks for geothermal projects, which are required by the new EU Renewable Energy Directive.

“It’s like solar: If you look at solar 20 years ago, no one is interested in solar because it costs too much. But as solar power has grown, the cost has fallen as it has improved in scale. We’re kind of on the verge of moving into the cost-effective range (for geothermal), just like we did with solar, in the next 20 years,Roland Horne, professor of earth sciences at Stanford University, told Yahoo News.

In general, there is currently a large, ongoing transfer of skills and personnel from the oil and gas industry to geothermal, as many of the technologies used are similar. This could help propel this clean energy source into mainstream use for decades to come.

By Alex Kimani for Oilprice.com

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