Despite Growth South of The Border, Canada is Tepid on Geothermal Energy


By Arman Kazemi

August 28, 2014

New breakthroughs in geothermal technology could help boost the U.S.’s already 3,187 MW geothermal power capacity, the largest in the world.

Earlier this week, Oregon Public Broadcasting reported on a project currently receiving federal grants that could expand the sector’s output. The success of geothermal in the U.S. raises questions about the potential of the dormant geothermal industry in Canada.

Geothermal power in its simplest form is technology that exploits naturally occurring heat in the earth’s interior. Using water under the earth’s surface, geothermal plants extract steam to power turbines, creating electricity.

Generally, the hotter the water—and the more of it there is—the more electricity gets produced.

Despite being the world leader in installed geothermal energy capacity, the industry in the U.S. has been struggling to keep up, mostly due to the fact that, at the moment, “natural gas is very, very cheap,” says Pete McGrail, a geothermal research scientist at Pacific Northwest National Laboratory.

McGrail is part of a research team looking at ways to increase the profitability of large-scale geothermal projects, which often take on the same capital risks, but with slower rates of return, as traditional oil and gas.

One of the ways McGrail and others have discovered to boost geothermal’s profitability is to isolate the mineral by-products of the extraction process, which often include rare metals found deep inside the earth’s crust.

These minerals can be extracted and sold off to companies that use them to manufacture a range of products like wind turbines, LED lights, computers and cell phones.

Yet, despite the fact that geothermal plants function better in colder climates like northern Canada, which has some of the greatest potential for geothermal extraction, industry in Canada as a whole stands at zero.

According to the Canadian Geothermal Energy Association, or CanGEA, the potential for geothermal energy in Canada “is estimated at over 5,000 MW . . . with currently available technology,” and the potential of another 5,000 MW of baseload power available to displace the equivalent amount of coal-burning energy.

This would result in over “25 mega tonnes of offset CO2 emissions per year,” the CanGEA website states.

According to a blog post from the advocacy website Desmog Canada, the same forces that have hampered the industry down south could be responsible for its lacklustre showing at home. These include competition from incumbent power producers such as oil, gas and, in one important case, hydro.

Thanks to hydro energy’s domination of the energy markets in B.C., which also has the country’s greatest potential for producing high-temperature geothermal resources, alternative renewable energy industries have had a hard time getting their foot in the province.

As John Carson, chief executive officer at Alterra Power, says, “if there is no viable new place to sell power in the province, then no one is going to go out and locate those commercially viable wells because they cost millions of dollars.”

Other places in Canada have been identified by CanGEA as ideal for geothermal operations, including Yukon and the Northwest Territories, which share the mineral rich Canadian Cordillera with northern B.C.

But, as Craig Dunn chief geologist for Borealis GeoPower told Desmog Canada, with no government intervention, either through funding for geothermal exploration or by taxing incumbent dirty oil and gas, the Canadian sector is likely to remain a theoretical proposition.

Perhaps, like the researchers over at Pacific Northwest, it’s time for Canadian geothermal proponents to start looking for gold at the bottom of the well.