Today marks the start of the first geothermal energy conference in Canada in about 25 years. The two-day conference in Vancouver is organized by the Canadian Geothermal Energy Association(CanGEA), an industry group formed a couple of years ago, and is in part an attempt to get federal and provincial governments to take notice of this form of energy.
There are around 25 countries currently producing geothermal power, which uses heat from the Earths core to turn water into steam to produce electricity. (Ive written about it before hereand here.) The U.S. is the worlds largest producer, followed by the Philippines.
Where does Canada rank? Well, it doesnt, really. There are no large-scale geothermal power projects in Canada.
I spoke with Alison Thompson, executive director of CanGEA, a couple of days ago, and she recounted the somewhat sorry history of geothermal in Canada. The federal government began funding research in the wake of high oil prices in the 1970s, and actively drilled test wells in British Columbia, Saskatchewan and Cape Breton. But support was abruptly dropped in 1986 after oil prices fell, and since then, there has been nothing for geothermal, even as other countries such as the U.S. and Germany have carried on with research. A test well in Saskatchewan, though proven to have commercial potential, is now a parking lot, and a comprehensive study of the geothermal potential in Canada was never completed.
Even so, Thompson says that from the data produced more than two decades ago, there is at least 5,000 megawatts of proven geothermal resources in Canada. That’s not a lot, equivalent to about 2% of the country’s electricity demand, but much more potential can be discovered with further research.
Geothermal power could even play a role in the oilsands, replacing at least some of the natural gas currently used to supply the massive amounts of energy needed to separate oil from sand. But that looks like a long way off. A consortium called GeoPowering the Oil Sands was formed in 2004 that included both Suncor and Nexen. Thompson, now a project development manager with Nexen, ran the program for two and a half years, but it disbanded at the end of 2008. The conclusion was that while geothermal in the oilsands was technically possible, it was much too expensive.
But thats not to say it cant happen eventually. The best geothermal resources in Canada are located on the west coast, and it makes sense to develop those first before moving on to more expensive and difficult projects, such as in the oilsands, Thompson says. Large companies such as those in the oil patch also need policy clarity on geothermal, which Canada lacks. Many provinces dont even have the legal mechanism to develop this form of power. Currently only one province, British Columbia, has a geothermal act, and CanGEA has been talking with the B.C. government about updating it.
Besides the absence of policy in Canada, the most unattractive quality of geothermal is the staggering upfront cost. It takes a lot of time and money to scout a location, drill test wells, and ultimately develop a commercial-scale facility. Thompson estimates it costs around $4 million per megawatt to build a plant. Unlike solar and wind power, geothermal doesnt necessarily need an ongoing subsidy for each kilowatt-hour of electricity produced, but once a plant starts generating electricity, the cost is actually cheaper than other forms of alternative energy, Thompson says. Thats assuming your project works, she cautions, and that you dont have any bad luck or hiccups in development.
The handful of Canadian geothermal companies that do exist are concentrating in the U.S. and South America where there is more financial support. (Though at least one, Western GeoPower, is investigating opportunities in British Columbia.) Thompson says there are a few ways governments can help kick-start geothermal again, such as sharing the initial development costs with industry. In Germany, geothermal firms can actually get insurance to recoup costs should a site turn out to have no commercial potential, something the U.S. is looking at, too. This certainly helps to take the risk away, she says. So these entrepreneurial companies dont go belly up after the first bit of bad luck.
Canada has clearly fallen behind when it comes to geothermal. The U.S. is currently funding enhanced geothermal, which strives to produce power in areas previously thought of as unsuitable. The conference happening today and tomorrow should help bring more awareness to the potential of this form of power, and now its up to policy-makers to pick up the slack.