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BP and Chevron made a historic expansion in geothermal energy on Tuesday, betting on a new technology that could prove to be the world’s first scalable clean energy from a constant source: the earth’s natural heat,
The two major oil companies presented a $ 40 million round of funding for a Canadian geothermal energy company called Eavor. Based in Calgary, Eavor has developed a new form of technology that could be deployed in many places around the world.
This investment marks a key milestone in an area otherwise overlooked by energy companies, which have turned largely to wind and solar projects in their efforts to diversify away from fossil fields.
This is the first investment in geothermal energy for BP BP,
and a return to the field for Chevron CVX,
which sold its geothermal assets in 2016.
Eavor previously only accepted angel investments and venture capital. The $ 40 million injection will be used to continue research and development to help evolve the power system to be price competitive.
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“We see the potential of Eavor to complement our growing wind and solar portfolios,” said Felipe Arbelaez, BP’s senior vice president for zero carbon energy. “Technology like Eavor’s has the potential to provide geothermal energy and heat and help unlock a low-carbon future.”
Eavor has developed a new type of geothermal technology which, in very simple terms, creates an underground “radiator”.
The Eavor “loop” consists of a closed-loop network of pipelines typically installed 3 to 4 kilometers below the earth’s surface, starting and ending in the same above-ground installation. The pipes are installed using advanced drilling techniques perfected in the oilfield.
The liquid circulates in the pipes of the aboveground installation through the warm ambient underground environment, before returning naturally to the top of the loop. The hot liquid is then converted into electricity or transferred to a district heating network.
A major advantage of this type of power is that it is constant, providing a base load of electricity to a grid system without requiring difficult battery solutions for intermittent wind and solar power.
Shots of virtual tour of full-size prototype of Eavor.
Photo courtesy of Eavor.
Unlike hydropower, which relies on large sources of constant water flow, it is designed to be scaled up, and Eavor envisions platforms installed under solar panel fields and in regions with space. restricted like Singapore.
Geothermal energy has been around for decades, enjoying a period of expansion in the 1970s and 1980s before falling largely into the limelight in the 1990s. Relying on the heat beneath the earth’s surface, it has Long been an attractive proposition for oil and gas companies, which have core expertise in underground exploration and drilling.
The problem is, conventional geothermal technology relies on finding super hot water sources underground, making it expensive, risky and rare bets. More recent advances have their roots in the shale oil boom and use fracking techniques to actually create the underground reservoirs needed for power generation. But this can pose a problem from an environmental and sustainable point of view.
Eavor’s solution does not require the exploratory risk of traditional geothermal energy or disturb the earth like fracking type geothermal energy does.
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John Redfern, President and CEO of Eavor, told MarketWatch that the predictability of the system, established in field trials in partnership with Royal Dutch Shell RDSA,
is reproducible and scalable, making it a bit like wind and solar installations.
“We are not an exploration game like traditional oil and gas or traditional geothermal energy. We are a repeatable manufacturing process and as such we don’t need the same rate of return, ”said Redfern.
“Even before we build the system, unlike an oil well or traditional geothermal energy, we already know what the outputs can be. Once it’s up and running it’s super predictable, ”Redfern said. “Therefore, you can finance these things just like wind and solar power, with a lot of debt at very low interest rates.”
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