Can geothermal play a role in Ireland's transition to clean and cheap energy?
Frontispiece: The Spa House in Mallow, Co Cork, Ireland, built in 1828 in an area of warm springs and holy wells. The Mallow Springs, a 20 °C water spring, is one of many that straddle a zone running southwest, from Co Kerry to the northeast, Co Dublin. The town of Mallow became a spring waters town to visit for medicinal and spiritual reasons in the early 19th Century. The springs are typically hosted in Carboniferous limestone, but the trend overlies the more ancient Iapetus Suture Zone, a crustal boundary formed by the closure of a 500 million-year-old proto-Atlantic ocean. (Picture: Holy Wells of Cork and Kerry).
This 19th-century use of geothermal energy could be a forebearer of a geo-energy revolution in Ireland and other low-enthalpy countries around the world. Shallow geothermal energy can be amplified by ground- and water-sourced heat pumps to warm and cool buildings and represents a huge opportunity to substitute for more expensive and/or more carbon-intensive fuels. ORC-Binary generators and closed-loop geothermal well technologies appear to be ready to catalyze the development of deeper geothermal resources, previously regarded as not hot enough and not permeable (productive) enough to be used for electricity generation. A coalition of academic research, government policy business, funded by government and private equity, can make this revolution happen.
Back in February 2020, in the days of the “old normal”, I wrote a blog containing some of my perspectives on how the energy transition might evolve in the island of Ireland, and the potential for Ireland to assume a leadership position in the world. I wrote the article in Portstewart, Co Derry on the north coast of Northern Ireland (NI) and had just made a trip to Dublin in the Republic of Ireland (ROI) to meet with some friends and colleagues to discuss how I might help Irish geoscience research in my role as Adjunct Professor in the School of Earth Sciences in University College Dublin. Those conversations precipitated me to commit to putting some research and thinking into how to accelerate the appraisal and deployment of geothermal energy in Ireland. Here’s what I’ve found.
Figure 1: Electricity generation by fuel type, ROI, 2005 to 2018 (Data source: SEAI).
Figure 2: Detail of electricity generation of electricity (ROI) in 2018 (Source: SEAI).
Problems to solve
There are least two substantial energy transition problems that geothermal may be able to help solve. In all energy problems there are two costs that need to be managed to their lowest possible level, one is financial cost and the other GHG and other emissions cost.
Figure 3: Sources and uses of energy in Irish homes, 2017 (Source SEAI).
The first energy transition problem I’d like to consider involves the generation of electricity for the grid. Although there has been a substantial reduction of fossil fuel consumption, Ireland remains dependent on fossil fuels in the form of peat, coal, and particularly natural gas (Figures 1 and 2). While there has been significant penetration of renewables into the grid, Irish electricity generation still heavily depends on baseload from coal and natural gas. All of the coal and much of the natural gas are imported, so from an emissions and energy security perspective, an indigenous source dispatchable baseload is required. Although Ireland has started building battery capacity, with a new 60 mW facility in Co Monaghan just recently approved, adding to an 11 mW one that was commissioned in Co Limerick earlier this year, there is a long way to go and wind/solar plus battery storage is an expensive option. Could geothermal be part of the mix in building a baseload capacity of clean electricity?
Figure 4: Costs ranges (orange bars) and emissions (blue dots) for fuels in residential space heating. Note for Air and Ground Source Heat Pumps I have assumed a Coefficient of Performance (CoP) of 3.5 and 5, respectively, and for Solar Thermal I have assumed 60% of the heat for an average dwelling and a lifetime cost of €10,000 amortized over 20 years. (Source: Data: SEAI; Graphic: Capriole Energy).
The second energy transition problem to be highlighted here for a geothermal solution is the provision of heat (and cooling) and warm water to buildings. Although this challenge applies to buildings of all types, I will focus on dwellings because about 400,000 homes in Ireland spend more than 10% of their income on energy and hence are classified as energy poor. In addition, the residential sector accounted for 24% of energy-related CO2 emissions in 2018, including upstream electricity emissions, and was the second-largest source of CO2 emissions after transport (which accounted for 40%), and was ahead of industry. Figure 3 illustrates (for 2017) house the ROI residential sector sourced and used energy and shows how oil still dominates the mix. This is largely because many Irish homes are not connected to natural gas infrastructure and therefore have to choose between transportable fuels such as oil, LPG, coal, or even peat. Oil is currently the cheapest of those fuels in terms of delivered heat (Figure 4). Heating of room spaces and water dominates the uses of the energy in homes. Oil is one of the lowest cost alternatives and ironically has lower emissions than some of the alternatives including electrical storage heating as Irish grid electricity is still fairly “dirty” compared to some countries. The challenge for geothermal, and other clean energy sources such as solar thermal and solar photovoltaic (PV), is how to displace the fossil fuels out of the residential energy mix at costs of less ¢6/kWh. As discussed further below, there are issues at play other than overall cost of supply that are impeding renewable energy’s growth in residential energy.
Shallower Geothermal
Figure 5: Shallow geothermal energy and heat pumps (Source: Geological Survey of Ireland)
Shallow geothermal, within a few tens of meters of the surface, is a low-temperature energy source that can be gathered and amplified using heat pumps. Heat pumps work on the same principle as refrigerators and air conditioners to transfer heat from the air or from the ground. Because more energy is delivered to the target space or water than is used in the form of electricity driving the pump’s compressor, heat pumps have a Coefficient of Performance (CoP) greater than 1 and 3.5 or more is typically achieved.
Ireland’s shallow subsurface is well suited to shallow geothermal because of the wet, maritime climate keeping soils and surficial cover over bedrock moist and highly conductive. There are also frequently gravel and sand deposits that form excellent shallow reservoirs for open-loop systems. Despite the high suitability, ground- and air-sourced heat pumps only provide a little over 1% of Ireland’s heat and the contribution has been growing slowly. Although ground-sourced heat pumps are more efficient, with CoPs closer to 5, air-sourced heat pumps may be more popular than ground-sourced as the latter needs some installation of pipework in the ground and therefore there may be space constraints and most probably higher capital costs. However, both may suffer from consumer reluctance to bear the capital costs of retrofitting existing buildings; that may change with new government incentives. For new buildings, such as housing developments and larger building complexes like large stores and hospitals, shallow geothermal represents a great opportunity to improve the energy efficiency of the heating and cooling. Combined with other renewable technologies such as solar thermal, it is possible to improve the cost and emissions further still. Senergy Innovations, the developer of a breakthrough solar thermal panel, is investigating a systems design that includes both the rooftop panels and heat pumps, air, and or ground source. Moreover, shallow geothermal can be used as heat storage for diurnal or seasonal storage of heat. I suspect that part of the reason for the lack of uptake of shallow geothermal is the relative dearth of companies marketing clean energy as a service in the face of stiff competition from natural gas installers, and the comparatively cheap oil-fired solutions. Again, clarity on government subsidies will help. I believe there remains a market opportunity in Ireland and the UK for energy as a service where the offer includes building efficiency and smart digital solutions but includes “behind-the-grid” energy solutions such as geothermal, solar thermal, and PV, and efficient delivery solutions such as heat pumps. One trendsetter European company, Engie, is developing a business model that involves geothermal - including deep geothermal to be discussed next, as a suite of energy offers. For me, they represent a model that can be easily replicated without companies bumping up against one another because of the growing size of the market.
Deeper geothermal
Figure 7: Modeled temperature at 2,500 m depth (from Goodman et al., 2004). Target areas refer to the prospects analyzed during the IRETHERM project. The map also locates some of the larger electricity generation power stations in Ireland.
Conventional geothermal energy is typically recovered in wells in areas where the geothermal gradient is very high and there are high-temperature resources close to the surface and therefore relatively easy to access. Such conventional geothermal resources occur in high enthalpy parts of the world, often on or adjacent to tectonic plate boundaries. For example, in Iceland, 66% of the country’s primary energy use comes from geothermal, present because of the island’s location on the active mid-Atlantic oceanic ridge, and lineament of active volcanism and plate spreading. Geothermal wells in Iceland at only 2 km depth can access temperatures of 175 °C to supercritical fluids at 380 °C!
Ireland in contrast, and similar to the majority of the rest of the world, is low enthalpy and geothermal gradients that range from less than 10°C per kilometer depth in the south of the island to more than 35°C/km in the north and northeast (Figure 6). This means that in order to get to temperatures such as Iceland enjoys quite close to the surface, wells of 5 or 6 km or more would need to be drilled. That is likely to be too expensive, and so accessible Irish geothermal resources in the 70 to 150°C range have been historically considered too cool for electricity generation as in conventional geothermal sites. Geoscientific research such as in the IRETHERM project has also concluded that the natural permeability of the rocks in much of the Irish subsurface may be too low to support the production rates of hot water, even if it could be delivered at sufficiently high temperatures, required for conventional steam turbine electricity generation. Hence these resources are currently considered likely to be more suitable for district heating where many buildings are directly fed heat from a common source well or wells. Technology is available in Enhanced Geothermal Systems (EGS) to use techniques such as fracking to artificially enhance the permeability and hence deliverability of the rock. Fracking of courses raises concerns about contamination of shallow aquifers and induced seismicity and hence EGS would need a lot of public education if to stand a chance of acceptance.
CLOSED loop and binary generation systems
Figure 8: Simplified outline of how ORC-Binary power plants work.
Two principal technologies especially combined together may be creating a breakthrough for low-enthalpy geothermal resources to be used for electricity generation. The first of these technologies is an electricity-generating technology known as Organic Rankine Cycle binary generation. ORC-binary power plants use an organic fluid, with a lower flashpoint than water, to drive the turbine and the plant is known as binary because the organic fluid is heated in an exchanger where the incoming fluid is derived from sources such as lower enthalpy geothermal or waste heat recovery systems in other industrial processes. ORC-binary power plants are used for resource temperatures between 100°C and 200°C and as of 2017 have been deployed as plants in the range of 1 megaWatt to 50 megaWatts capacity. Note for comparison that wind turbines in Irish onshore wind farms typically have individual capacities of 1 to 3 megaWatts. As can be seen in Figure 7, Ireland has much more accessible geothermal resources above 100°C at modeled depths of 2500 m (or ~8200 feet). These depths are much easier and less expensive than double or triple that depth and may therefore begin to make economic sense. Several ORC-binary power plant companies are manufacturing modular facilities so perhaps a geothermal site can be upscaled and capacity increased as early pilot plants are proven and performance is improved.
Figure 9: Greenfire’s ECO2G™ system compared to a conventional hydrothermal system. The ECO2G™ uses production well(s) to circulate supercritical CO2 down the to gather heat. Thermosiphon effects case the fluid to circulate back up and the turbine is run with the hot, pressurized sCO2. (Source: Think GeoEnergy).
The second technology, used in combination with ORC-Binary power plants, is closed loop systems in the subsurface used to harvest the low enthalphy heat from the geothermal resource (Figure 9). Instead of injecting cold water into the subsurface and producing hot water in return within an open loop, the closed loop keeps the heating fluid contained from the geothermal reservoir within the pipe. This means that the harvesting of heat depends more on the thermal conductivity of the rock, not so much on the permeability. Surface discharge of reservoir fluids does not occur and hence there is no exposure to GHG emissions that can be contained in the fluids. Furthermore, the thermosiphon driving the movement of the fluids prevents costly energy losses associated with pumping or compression.
Figure 10: The Eavor Loop systems of co-joined laterals. (Source: Eavor).
The last few years have seen the entrepreneurial appearance of several different types of closed-loop system aimed at harvesting geothermal heat in this efficient and emissionless way. For example, Eavor Technologies, Inc have already successfully drilled a pilot production system in Alberta, Canada, where two horizontal wells have been drilled so that their ends coincide and can be joined with steel casing. Heat production from the pilot system is currently being tested and monitored against performance predictions and a commercial pilot project has already been approved for deployment in Germany. Similarly, Sage Geosystems (Sage CEO Lev Ring, personal communication) have a single well design where a fluid is injected down the inside of tubing suspended in the well and that fluid is heated and returned to surface, again through thermosiphon pressure, in the annulus between the tubing and the outer casing of the well. The exposed surface area of the collecting part of the closed-loop system is very important to thermal transfer efficiency, as is the conductivity and/or convectivity of the rock contacted by the system. Eavor plans to build a network of co-joined laterals to multiple the contact surface area, whereas Sage envisages a pre-completion fracture stimulation of the well with a thermally conductive material.
There appears to be a huge potential for these two technologies to provide a breakthrough for the two challenges outlined above. Particularly important, in my view, is the new capability of low-enthalpy to power electrical turbines providing a clean, reliable base-load for the Irish grid. Very competitive Levelized Cost of Energy (LCOE) values around 6¢/kWh are predicted. How do we get moving on this potential? I offer an outline plan in the next section.
FROM RESEARCH THROUGH Pilot projects to full-scale deployment
Earlier this year, the Sustainable Energy Authority of Ireland (SEAI) and the Geological Survey Ireland (GSI) announced €1m in Government funding towards innovative research projects targeting geothermal energy. Three projects were awarded funding under the 2019 SEAI National Energy Research, Development and Demonstration Funding Programme, with strategic co-funding support from GSI. These projects will make progress in advancing our understanding of geothermal’s potential in Ireland and are founded on several decades of previous data gathering and analysis.
The Dublin Institute for Advanced Studies was awarded funding for the DIG project (De-risking Ireland’s Geothermal energy potential). It aims to reduce risk in harnessing Ireland’s geothermal energy potential using a multi-scale and multi-disciplinary approach. It will improve the estimation of deep geothermal resources in Ireland, building on existing datasets and geothermal modeling knowledge. Gavin and Doherty Geosolutions Ltd has been awarded funding for a project titled ThermoWell. It will apply novel drilling and exploration techniques for deep geothermal resources and aims to demonstrate the economically advantageous use of Deep Standing Column Wells as a renewable heat resource. Terra GeoServ Ltd has been awarded funding for their research project ShallowTHERM. This project will test a methodology to estimate the underground heat-exchange potential for shallow geothermal installations, in particular, vertical closed-loop collectors.
I propose that the impact of these projects can be deepened and accelerated by broadening the group of stakeholders involved into a consortium that includes electricity providers SONI and ESB, the owners of key sites such as existing large power generation facilities, the government department in charge of regulation and permitting of geothermal resources and perhaps a private commercial enterprise with a business model based on, or including geothermal energy. If the technologies of closed-loop and ORC-binary power plants are quickly assessed for applicability in Ireland, then the underpinning risk reduction work can be focused on selecting a shortlist of sites for pilot plant development in locations where 100°C and 200°C together with the required conductivity properties can be predicted with more certainty. That will make the business case for drilling more acceptable in terms of risk, cost, and reward.
“Kilroot Energy Park will aim to deliver new highly flexible gas generation to complement the widespread use of renewable energy on the electricity system in Northern Ireland. This aligns with the strategic needs of the Northern Ireland system, which can utilise on any given day up to almost 70% of its electricity from renewable sources.
In addition to this, we are looking at a range of other forms of renewable energy on the 230-acre site, including solar, battery storage, hydrogen and a Multi Fuel Combined Heat and Power (CHP) facility as well as a data centre.”
I think involving electricity providers and the current owners and permit holders of the larger power generation sites enables the opportunity for collaboration and integration of geothermal into the future plans of the sites. For example, the owners of the Kilroot power station in Co Antrim, EPUKI, intend to invest £600m to convert the plant from coal to natural gas, and at the same time develop an energy park to deliver other lower-carbon technologies (see sidebar). A geothermal pilot facility could be incorporated in the plans for the Energy Park and a focused risk reduction appraisal would aim to understand the temperature and conductivity for targets up to say 3,500 m depth.
Another possible and similar candidate is the Moneypoint coal-fired power station in Co Clare which is scheduled for decommissioning in the near future but commands a coastal location on the Shannon estuary that might be a candidate for Energy Park development like Kilroot, for example, to be the landfall for an offshore wind farm development. Furthermore, Moneypoint is developed on rocks of the Clare Basin that sits over the Iapetus Suture Zone and the subsurface may contain geothermal resources. Again the purpose of geological risk reduction work would be to ascertain whether or not rocks at economically drillable depths are likely to be hot enough and sufficiently conductive to support the low-enthalpy geothermal technologies outlined earlier.
It will be critical to involve the regulators involved in setting ownership rights, establishing efficient processes to issue drilling permits, and undertake site assessments for geothermal projects. The ability to commercialize opportunities will be hugely dependent on the speed of project execution and hence the ability for investors to receive their payback in a timely manner.
I believe it is also important to have commerce involved in the consortium, with one or more companies with a business model built around geothermal energy as a heat/cooling service and as a baseload electricity generation source. Such companies will be entrepreneurial ventures as the enabling technology is still not mature and ought to benefit from government backing in their early stages. This geo-energy company will play a pivotal role in working with the other stakeholders to drive the project to completion and pull in other academic and commercial technologies and capabilities from around the world. In the next section, I conduct a thought experiment to illustrate a path to commerciality for such a geo-energy firm.
Clean, affordable, and profitable baseload electricity
Figure 11: An outline business plan for the first geothermal power plant in Ireland (Source: Capriole Energy).
A five-year business plan for to establish the first Irish electricity power station from geothermal energy starts with continuing the gathering and analysis of subsurface data to further the understanding of the Irish low-enthalpy resources (Figure 11). I emphasize again that this is less about identifying the hottest rock, but more about identifying “hot enough” resources close to, or under, target market opportunities such as existing power generation complexes or new residential districts or industrial parks. A play fairway approach, borrowed from oil & gas exploration, would map out predicted subsurface isotherms and overlay expected drilling costs or similar measure of accessibility. A further overlay of existing or expected infrastructure and developments on the former segments would allow identification and ranking of prospective locations.
Once a shortlist of potential sites is agreed upon, then the detailed site assessment, well design, and facilities design process begin. I imagine that several sites for the first geothermal power station will be worked forward in parallel, with the final site selection to the best 1 or 2 options from technical and commercial perspectives. The costs for the drilling, power station and other infrastructure have been obtained through conversations with industry experts. I have doubled the drilling costs compared to what it would take to drill a similar well(s) in North America because I assume there will be a high rig mobilization cost for the first well and Irish rocks are typically more indurate and harder to drill (Figure 11 - Project Financials). As well as capital costs, there are certain key assumptions that control or at least influence the economics of the project. For example, I have assumed that 50% of the capex is government-funded with no return expected and similarly I have assumed - as part of the thought experiment - that there is a very modest carbon tax credit for the displacement of carbon-intensive baseload from the grid (Figure 11 - Key Assumptions). With this set of assumptions, the project delivers €23 million of Net Present Value (NPV) at a discount rate of 10% and an Internal Rate of Return (IRR) of 32%, a profitable venture for the investors involved. Note that in pure project finance terms, with no government participation with “zero-cost” capital, my thought experiment model delivers 18% IRR, which is pretty good for a pilot project. Of course, it is possible to play with the model to test sensitivities and to make it more complex to allow, for example, for different costs of capital from different sources, but the objective of this thought experiment is to test the benefit of the potential technological breakthroughs. In reality, the project would have stage gates, where risk is reduced to residual, and the economic benefits and constraints of each technology would be fully understood before the project proceeds. For example, it may be wise to run the well(s) on test to ensure that heat productivity is sufficient to justify the construction of the power plant, as well as using the test data to fine-tune the plant’s design.
All that said, I am very excited by these numbers, suggesting to me that the venture has a good probability of success with the ability to manage capital exposure. The next section outlines the upside made possible by a successful pilot plant.
Needs and possibilities
Figure 12: Renewable installed capacities projection for ROI and Dispatcheable baseload capacity for the island of Ireland. (Source: All-Island Generation Capacity Statement 2019-2028, SONI & EIRGRID).
The Irish electricity grid, connected by an Integrated Single Electricity Market (ISEM) designed to make trading more competitive and improve power distribution across the island, is becoming greener with greater penetration of renewables. Both NI (under UK ambitions) and ROI (under EU ambitions) have goals to attain renewable energy share (RES) of about 70% on installed capacity by 2030. It is currently assumed that this will likely be achieved mainly by additional wind generation, largely offshore (Figure 12).
For ROI, the European Clean Energy Package dictates that Moneypoint power station is to close by the middle of 2025. Similarly, Kilroot was destined to shut down, but has been reprieved with the proposed conversation to natural gas. These changes nevertheless reinforce a declining trend in the amount of dispatchable baseload to combat the intermittency of wind and solar. Thus there are some very interesting market opportunities for a proven geothermal plant model including grid baseload share, renewable share that is dispatchable, and providing microgrid power to industrial complexes, especially as those that act as Demand Side Units (DSUs) to provide electricity into the main grid as requested (Figure 12). If clean geothermal electricity can be proven to be able to supply at competitive costs of ¢20/kWh or less, then an unconstrained market is a distinct possibility, with constraints being more likely placed on the supply side such as subsurface spacing of wells, plant size and footprint, and the ability to authorize, permit, and execute larger and larger projects.
To put some value numbers on this opportunity, a big hairy audacious goal of 1 gW of capacity by 2030, matching hydro and DSU combined, represents an annual €1.6 billion revenue opportunity in 2030 (with no carbon credit included). This would take increasing the capacity of geothermal by 2.6 times each year in the second half of the decade!
Clean, affordable heat
Figure 13: A geo-solar city. Not shown is supplemental heat from deeper sources. (Source: National Geographic).
There are clearly some challenges to economic geothermal electricity generation in Ireland, even if the twin breakthrough technologies of closed loop systems and ORC-binary do work well together. For example, most of Ireland is covered by fairly indurate rocks which may make drilling difficult and slow, and hence uneconomic. If the appraisal of geothermal electrical power generation in Ireland does not work out, there remains a huge role for geothermal in the provision of clean, affordable heat. The total energy demand for heat in Ireland (55 terraWatthours in the ROI, 27 terraWatthours in NI) is more than twice that of electricity. The potential market for heat pumps, including in combination with other energy sources like solar thermal, to heat (and cool) residential heating of spaces and water has already been described. In the UK that growth will be accelerated by the banning of new gas network connections from 2025 onwards. New developments of housing in estates and neighborhoods can be heated with a district network of in-ground pipework, boosted if necessary by one or more deeper geothermal wells. Similarly industrial complexes, business parks, and public buildings such as hospitals could benefit from geothermal heat, shallow, and again can be boosted by deeper geothermal wells. This market appears readily accessible and so the knowledge, experience and technological progress developed by work to test geothermal as an electricity provider will not be wasted. The capabilities and products developed will also be exportable to Europe and other locations. For example, I would expect any business venture involved in geothermal in the next few years in Ireland would develop business, growing revenue, in the shallow geothermal sector while progressing the deep geothermal opportunities. The scale of the opportunity in Ireland alone is large. Using a rule of thumb that ground-source heat pump energy costs the consumer about £1200/kW (€1325/kW) capacity to install, then converting one quarter of the Irish annual heat demand to heat pumps represents a revenue opportunity of about €3 billion.
Next steps - think big, act small
I hope I have enrolled the reader in a very big possibility for low-enthalpy geothermal in Ireland. Aside from proven and vast shallow geothermal resources that present a huge clean heat opportunity, geoscience and engineering breakthroughs make electricity generation from deep geothermal possible. For a venture capital opportunity, proof of concept can be delivered relatively easily and capital exposure can be managed. The next small action step I think is to put together the consortium I outlined above and I suggest that some commercial entity needs to take the lead. I stand ready to help.
I researched and wrote this paper in response to a discussion with Koen Verbruggen and Murray Hitzman in January 2020. Paddy Orr and Stephen Daly caused that discussion (and others) to happen by, after a 30-year gap, reconnecting me to the School of Earth Sciences, University College Dublin through my appointment there as Adjunct Professor. My geothermal learning was significantly enhanced through help from Philip Ball and my enthusiasm for the possibility kindled by Jamie Beard, particularly her invitation to participate in the PIVOT2020 event and learn so much about the new technologies. My deepest thanks to all.
Endpiece: A few possible locations (of many) for future geothermal power plants in Ireland. Clockwise from the top left: Edenderry power station marked E on map), Kilroot power station (K), Moneypoint power station (M), and Raheen Business Park (R, a microgrid/DSU option).