Catalyst with Shayle Kann - Could geothermal become a major zero-emissions player?

Episode Date: September 9, 2022

Drill down far enough anywhere in the world and you reach temperatures hot enough to generate firm, reliable zero-emission electricity. That’s the hope for new geothermal technologies that could scale the industry beyond well-known geothermal hot spots like Iceland. But first the industry needs to overcome major challenges in financing and technology. It has also to deal with the public opinion around the oil and gas industry, which may be an essential partner in scaling geothermal because of its overlapping expertise in drilling and underground exploration. In this episode, guest host Lara Pierpoint talks with Jamie Beard, executive director of Project Innerspace, a non-profit focused on expanding the use of geothermal energy globally.  Current geothermal technology relies on naturally occurring underground hot spots, common in places like Iceland and the western U.S.. But an approach called enhanced geothermal systems or “hot, dry rock,” would make geothermal available around the world, potentially adding hundreds of gigawatts to current geothermal capacity. Lara and Jamie discuss major questions facing the geothermal industry, like: How and where to drill for consistent hot temperatures?  How long before a well is depleted of heat-carrying capacity?  What sort of surveying and information do funders need to deal with exploration risks?  How can the industry take advantage of the co-benefits of geothermal drilling, such as lithium extraction, carbon sequestration and waste heat? What working fluids, like water or critical CO2, are appropriate for a given project? How viable are geothermal-source heat pumps and how do they compare to air-source heat pumps? What are the potential environmental impacts of geothermal? What role should the oil and gas industry play in scaling this zero-emission technology? Resources: Canary Media: Advanced geothermal heats up with $138M round for startup Fervo Energy Department of Energy: DOE Launches New Energy Earthshot to Slash the Cost of Geothermal Power Catalyst is a co-production of Post Script Media and Canary Media. Catalyst is supported by Antenna Group. For 25 years, Antenna has partnered with leading clean-economy innovators to build their brands and accelerate business growth. If you're a startup, investor, enterprise, or innovation ecosystem that's creating positive change, Antenna is ready to power your impact. Visit antennagroup.com to learn more. Solar Power International and Energy Storage International are returning in-person this year as part of RE+. Come join everyone in Anaheim for the largest, B2B clean energy event in North America. Catalyst listeners can receive 15% off a full conference, non-member pass using promo code CANARY15. Register here.

from the studios of PostScript Media and Canary Media. I'm Larry Pierpoint, and this is Catalyst. So geothermal is this awesome energy silver bullet, right? And Silver Bullet, I want you to understand how much I hate that term. However, in the geothermal context, it actually could be true, right? Where you have an energy source that is ubiquitous, and if we can get to it, we can use it for just about anything. Does the technology enabling geothermal everywhere mean the rest of the world is going to start looking a lot like Iceland?

Today, we're digging into geothermal. When utilities need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 gigawatts of flexibility, built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually actually. stake their grid planning on, coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale. Predictive, verifiable, and designed to perform when it counts. Learn more at energy hub.com. Trillions of dollars are flowing into clean and critical infrastructure,

but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy and building the clean economy. Tune in as we unpack how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts.

I'm Laura Pierpoint, filling in for Shale Khan while he's out this week. I'm the director of Climate at Actuate. It's a nonprofit focused on systems innovation to scale greenhouse gas emissions reductions. geothermal energy definitely ranks as one of the coolest energy sources out there. How do you not love that someone saw hot water shooting out of the ground in the form of a geyser and then harnessed it for a range of energy purposes? So geothermal has been around a long time, but as a technology, it's getting hotter, pun absolutely intended.

There's almost 16 gigawatts of geothermal capacity installed globally. So depending on what technology you're working on in the climate space, that's either nothing or it's a solid base from which we can all build. The U.S. is the leader with nearly four gigawatts of capacity, followed by Indonesia and the Philippines is catching up fast. Iceland has the highest percentage of its electricity from geothermal, clocking in it over a quarter of the electricity it uses. So is the future here that the world looks more like Iceland?

Today I posed versions of this question to Jamie Beard, a longtime baller in the clean tech space, who founded an organization called InnerSpace. Interspace is a nonprofit focused on expanding the use of geothermal, energy globally. For me, as a self-avowed evangelist of focusing on system solutions for climate scale and speed, I couldn't love the mission of interspace more. Their goal is to take geothermal exponential by 2030. As Jamie and I discussed, the world is on fire, so most of the world will look in many respects a lot less like Iceland, but actually there's huge potential to replicate

Iceland's reliance on geothermal energy everywhere on the planet. This is the promise of new Geothermal Anywhere Technologies. In today's episode, Jamie and I cover what those technologies look like and what it's going to take to get them deployed at global climate altering scale. Here's my conversation with Jamie. Jamie, it is so wonderful to be with you today to talk about all things geothermal. Hey, Laura, nice to see you again. Yeah, this is going to be good. So let's dive right in here. Geothermal is one of my favorite technologies. I feel like it's one of those what is old as new kind of things. Like we've had it around forever, but there are some really interesting development, some really cool ways we're getting at it. It like every clean technology

has had its fits and starts over the years from my grad school days to, you know, how things are working now. So let's dive in on the history of geothermal power and talk a little bit about where we've been and where that's gotten us today. Yeah, so geothermal has existed in the world for for a really long time. You know, there are places in the world where geothermal has been around for more than 100 years. And so it's not a new source of energy. It's been around for heating and cooling and also for electricity production

in places in the world. But places in the world where you find it currently and where it's most ubiquitous are actually places that have very specific, very specific and unique geographical conditions under the subsurface. So they are, you know, rock conditions, permeability and presence.

of water and enough heat close to the surface to create conditions that make geothermal really easy to harvest. And so you see places like Iceland and, you know, some places in Italy, for instance, and places in California in the United States where, you know, geothermal for power production and geothermal for heat has been around forever. And, you know, in these places, it's a really, it's just part of daily life. But for most of us, geothermal, You know, it's kind of in the back of mind, right? Like, oh, yeah, that's a hot spring that I go sit in on vacation. You know, so the geothermal, you know, I call, you know, and love to the hydrothermal folks,

which are the, you know, the places in the world where geothermal is already developed. You know, I kind of call that your grandma's geothermal, right? It's the geothermal of the past. There's not a whole lot of it in the world. It's certainly not enough to scale exponentially, for instance, rights in very specific locations. And so looking forward for geothermal and where the past actually becomes the future is grabbing what we've learned from harvesting hydrothermal resources and figuring out how to do

that anywhere in the world. And that's what gets me really excited about geothermal. That's really cool. I love, by the way, that you use the word not your grandmother as geothermal because I think I actually used the same phrase when Shale interviewed me one time for this podcast and talked about how we have not your grandmother's nuclear anymore. So this is really the era of, like, not our grandparents' technologies, which is so exciting. I mean, not that hydrothermal likes to be called, you know, grandma, but hopefully folks understand

what we mean. Right, right. Well, so I think one of the things that, you know, that you've mentioned already that makes geothermal so interesting is that it's really not just, you know, a power production technology. You actually get, like, really warm liquid that you can use for heating purposes. There's really actually a variety of ways that you can use. geothermal can be kind of a multifunctional energy source, which is super cool. So we should definitely

get into kind of all those uses. But I think before we dive into the fun technology discussion here, let's talk a little bit about the state of the market. So we're building some more geothermal plants in the U.S. and elsewhere. But how is that going? Who's building, you know, how is the market really treating geothermal technologies currently? Are we in a good spot that we're supporting the technologies we need? Or is there more that's needed? Yeah, so, you know, I'll just come right out and state my opinion here, which is, you know, geothermal is being vastly underdeveloped in every way. It has been that way throughout history. It's been underappreciated. It's been underresourced and it's been underdeveloped, even with hydrothermal, right? So there is much more, you know, volcanic-based geothermal that we could be doing in the world over what we're doing now. And, you know, those, you know, roadblocks to increase development are, you know, it's a variety of things that kind of compound into obstacles, right? So it's, you know, folks not being really familiar with the resource, even in places in the world where it's ubiquitous.

You know, volcanic geothermal or hydrothermal geothermal is ubiquitous in places where it's just not developed. Some places in South America, for instance. So there is interest in these places that's growing, but we don't yet. see a lot of development, right? So it's slow. And, you know, that, a lot of this has to do with with increased risk of geothermal development and finding a funding mechanism that's proper to get a whole lot of projects launched really quickly, right? So, so even in the hydrothermal space, really underserved. But when you talk about next-gen geothermal, which is what I'm really excited about the geothermal anywhere type of revolution or renaissance, you know, we have a very big problem

there in terms of deploying teams into the field and doing this quickly. It's just not happening right now. Okay. Great. Well, I definitely want to get into the next gen story, but one more beat before we get there on kind of hydrothermal and, you know, back to our grandmother's geothermal, let's characterize for folks really what the risks are because I think one of the things that maybe a little bit underappreciated is that it's still non-trivial to poke a hole in the ground and to know exactly what you're going to get coming back up. And so is that really, you think, the fundamental problem, you know, when it comes to financing and building out traditional geothermal resources, is this concern about not quite understanding the subsurface,

or is there more to it? No, I think it's all about the subsurface, right? That's what makes geothermal unique. So geothermal has exploration risks, so understanding the resource before you start developing a project, and you have to understand those well enough to get a project financed. And that is a deal breaker for a lot of projects, particularly for startup companies who don't have access to a lot of cash to fund subsurface characterization of a site, for instance. But there's risk even after you develop a hydrothermal project in terms of output, temperature, if you're getting the temperatures

that you would hope to achieve, and depletion. So hydrothermal projects actually use water in the subsurface. And they have a depleture. completion curve and they decline over time, right? And so the, you know, predicting exactly when that will happen in hydrothermal resources is a risk in itself, right? So there are multiple risks in terms of developing geothermal projects. And, you know, we're trying to get at those in different ways, right? So reduce those risks from pre-project risk to, you know, after the project is operating. But these are not super easy nuts to crack, right? That's why.

the obstacles still exist. It's why this hasn't quite been solved yet. Yeah, got that. So lots of work to do on that. But in the meantime, we're also working on next generation, you know, geothermal resources and technologies, which I'm really excited to discuss with you. I think, you know, I remember about 15 years ago the catchphrase that I heard all the time was hot, dry rock. And so the goal was to figure out how are we going to get geothermal resources in places where you basically don't already have subsurface liquids, but theoretically you've got a heat source. So I know. So I know. There are a lot of folks working on that, so I can't wait to hear from you. What is the status of all of that research and what really is the structure kind of the next generation technologies we've got coming down the pike?

Yeah, so this is what gets me really excited. It's why I work in geothermal. So hot dry rock, which has essentially been rebranded these days as geothermal anywhere, because the lay person can understand what we're saying when we say geothermal anywhere, right? it's essentially look we know you drill below the subsurface if you drill far enough you're going to get really hot temperatures you're going to get temperatures hot enough to produce electricity and we'll talk about it later i imagine but the energy cascade from geothermal is awesome so if you go for the gold if you go for power production which is higher temperatures you have waste heat that you can use for all sorts of things including you know heating buildings and for agricultural uses and other things so

geothermal is this awesome energy silver bullet, right? And silver bullet, I hate, absolutely hate the term. I hate that term. I want you to understand how much I hate that term. Noted. However, in the geothermal context, it actually could be true, right? Where you have an energy source that is ubiquitous, and if we can get to it, we can use it for just about anything, right? From industrial heat to electricity to, you know, lower temperature heat. needs. And so, you know, really, really exciting. So, you know, geothermal anywhere is this concept that you drill deep enough, you get heat, but you don't necessarily get all of the characteristics that we need to produce energy, the characteristics that exist naturally in places like Iceland, right? So you have

porosity in the rock, you have the presence of a fluid, and you have heat, right? And so, you know, the question is, how do we engineer these systems in the subsurface? anywhere in the world where we want to produce power. So we need to create those pores in the rock where they don't exist. We need to make sure that the system operates over a long period of time reliably. We need to figure out how to drill cheaply to get to temperatures that we need and operate these plants safely. And the idea that we could do that, and we're on the cusp of being able to do that, is a really amazing thought.

Because literally then you're talking about being able to place. place, you know, regional geothermal power plants as a firm, reliable, weather-secure, baseload-capable, clean energy anywhere in the world, right? And that's a game changer for the future of renewables and the future of the grid, a decarbonized grid. That's great. I love how you kind of described the different characteristics that kind of may or may not exist in the particular location you want to put this. So can you say a bit more about like how we might address areas where some of those things aren't there? So for example, if there's, you know, rock with low perosity, can you engineer it to be higher porosity? If there's no fluid, you know, what does that

look like? Does that mean you've got some sort of fluid source at the surface that you're pumping down and back up again or say a bit more about what the options are? Yes, and that's where all the innovation is, right? So yes, on both of those. And, you know, that's what you've got startup companies, you know, and quite frankly, and industry incumbents working on now and government entities around the world, right? Which is, how do we make porosity where we don't have it? How do we drill cheaply when we want to get really deep and super hot? And what do we circulate in the wells to harvest the heat? And, you know, the answers to these questions are really cool and exciting. So you start launching into, you know, industry terminologies like enhanced or engineered geothermal systems, where you

drill and you use, you know, hydraulic fracturing to create porosity and rock. There's also closed-loop systems or advanced geothermal systems where you just directionally drill. So in those types of systems, you know, you're essentially drilling a radiator into rock. And then there's the hybrids that use both. So they use fractures to enhance the amount of heat that is delivered to a closed loop system. And all of these different concepts have different pros and cons. They have different costs associated with them.

They have different challenges associated with them. But they are all really excited. and they're all relevant in different parts of the world, right? So if you have a buffet of technology solutions, you'll be able to choose the one that fits best globally, depending on where you want to produce a project. And just on the working fluid side, right, that is something that I'm really excited about

because you have concepts developing. There's a project in Texas, for instance, that's using supercritical CO2 as the working fluid. So imagine you have drilled a well, you've engineered the subsurface, so you've got your pot and you're ready to put your fluid down there to boil it, right? And you want to produce that fluid to the surface. Well, what do you put down there? It doesn't have to be water, right?

And it may not always be that water is the best solution for a working fluid because it turns out there are other fluids that boil a lot faster than water and a lot lower temperatures than water. Supercritical CO2 being one of those fluids. And so the whole discipline of engineered working fluids, finding the perfectly optimized working fluid that heats up the fastest, that delivers as much heat as it can to the subsurface quickly, I love that. I think that is one of the real frontiers right now in the geothermal, you know, the geothermal anywhere movement. Okay, my next question for you is given all these new technologies and approaches, how anywhere do you mean by geothermal anywhere? And I asked because back in the day when I was working for Exxon, I got really excited and, you know, was talking to a geothermal startup and said, so how about it? Let's build some geothermal plants in Illinois where Exelon is located. And he sighed and said, you've just picked for me about the worst geology in the entire United States for geothermal. So do you really mean like geothermal in Illinois? And do you have a sense for what the potential capacity is? I know we were talking a bit about how, you know, we're a little bit north somewhere of a gigawatt in the U.S., which is not nothing. You know, how many, how many gigawatts might we get globally? I know it's not just all electricity, but do you have a sense for like, really how anywhere is anywhere and what scale are we talking here?

Well, so I would call a gigawatt nothing. Just, I mean, just, I mean, it's pretty much nothing, right? So we got to do way, way, way better than that, because that is a drop in the bucket. And so when we talk about, you know, wow, we can do 50 times what we've done now, 50 gigawatts is pretty much still nothing. I mean, so we need to set our site way, way higher than 50, 50x zero or 50X almost zero, right? And so in terms of capacity, global capacity, geothermal, if we start cranking geothermal projects out at the rate that we currently crank out oil and gas projects, and I mean just current oil and gas well drilling capacity in the world, which is roughly, you know, 70,000 wells a year. We do that every year between now and 2050. That meets global energy

demand. That's the capacity, right? So we're not talking about gigawatts. We're talking about. We're talking about terawatts, it's huge, and it's solved global energy demand. It's everything, right? So that's what we're talking about. That's the vision. Huge and fast and by 2050 and driven by an existing industry, right? So exciting, really big and exciting. So how do we get there? Do we mean anywhere? Not yet. No. Like, could we go and do an economically feasible geothermal anywhere, hot, dry rock system in Illinois right now? No, probably not. I mean, I don't think. I don't think. you could find a startup that would tell you with a straight face that they could, you know, that they had a clear path to do that in the next couple of years and be in roughly in price parity

with solar and wind plus storage, which, by the way, is the goal, right? I mean, we, there's no, there's no sense in developing this incredibly awesome, you know, ubiquitous anywhere in the world energy resource that nobody can afford to develop, right? And that, or that's 10 times more expensive than solar and wind because, I mean, it will always be that solar and one plus storage wins in that situation, right? So we have to take a, you know, account of project economics. And the reality of the situation is if you go try to do this in places where the heat is quite deep, where you have to drill pretty far. So you're talking in some places, especially in the eastern United States, you know, unless you're in one of the few anomalies, like there's a great

anomaly, an interesting anomaly in West Virginia, for instance. But if you're in a place where the heat is quite deep, you're talking eight kilometers or something, that's really deep. That's a deep well. And wells that are that deep are very, very expensive to drill. And they're very risky to drill. And that messes up your project economics, right? The more expensive your well, the least attractive your project is. So, you know, the way I like to look at this and the way I like to see this rolling out is the way that unconventional's did an oil and gas, which is, look, you've got to start somewhere, get in the field, get in the field somewhere where it's easy. Try it, perfect it, iterate, and get on a learning curve, and then start towing your way into the harder plays, the deeper plays, the hotter plays, the harder

rock, right? And that's, you know, that, that I think is how geothermal or geothermal anywhere will roll out in the next decade, is you've got teams that are in sedimentary basins right now, like in South Texas, right? They're trying geothermal anywhere projects in places where they can get to heat in pretty shallow depths that are typical in oil and gas, and it's in soft rock.

So they have lower risk, lower drilling risk and a higher, you know, a higher chance of success for their well. And then they'll learn and move on for there, right? So, you know, let's try Illinois in five years. You know, ask me again in five years, Laura, and we'll see.

But we're not really, we're not talking about moonshots here. We're talking about just needing to get on a learning curve, right? No, I mean, in five years is like, that's a reasonable time to be talking about doing some of the hard stuff. I mean, I think when I was thinking about, you know, not nothing, I think about some of the things with like 0% installed capacity, like very little experience. But like, I want to say one thing, which is I love your definition of something that you're talking about scale that the planet will actually notice, which is my whole day job is to try to figure out how do we get there faster. and the scale and the speed that you're talking about really, really excite me in terms of an ability to make a huge difference on what the planet actually cares about. And speaking of the planet, let's talk for just one second about kind of some of the

environmental impact piece, because I know that we've talked about how there are some really great resources and knowledge and technologies that can be brought to bear from the oil and gas community in developing geothermal. And so I'm wondering if you can say a little bit about, you know, the environmental impacts of the subservice. When people hear that you're doing things similar to fracking, they, you know, may start to think earthquakes. And so there's a lot of, a lot of fraud, you know, I guess technologies and language and things like that. But in terms of the actual fluids you're using,

the impacts on things like, you know, the surface structure, that sort of stuff, how do you see geothermal sort of ranking in terms of environmental impacts beyond just, you know, what it's able to do for greenhouse gas emissions reduction? Yeah. I mean, look, I think that we're all going to have to get a little bit real in terms of our impacts and meeting energy needs, right? Every energy resource, even renewables have very significant environmental impacts. And, you know, that includes solar, wind, and storage. And those things are finally being, you know, being discussed in the media, right? But just now, over the last couple of years, have people started to say, oh, wait, if we mine this amount of lithium globally, holy crap, right? I mean, this is a big thing. What is the

environmental impact there, right? So I think in terms, if you look at geothermal and compare it with fossil fuels, certainly, but also other renewables, it comes out pretty awesome. I mean, geothermal has a tiny footprint compared to other renewables. It doesn't rely on a massive amount of rare earth mining, like, you know, like for instance, wind and solar production and storage, production. And when it comes to drilling impacts, anytime you do something at an industrial scale, which by the way, geothermal is not really at an industrial scale globally right now. It's this little cottage industry that's driven by some small companies and regional companies, right? But let's just imagine a future. When I said 70,000 projects a year, that's the scale

of the oil and gas industry. And if we ramped geothermal quickly up to that scale, a lot of people in the world are going to notice it all of a sudden, right? You're going to have geothermal power plants in your region, in your city, and maybe in your backyard, right? And so, you know, the question is how do we navigate that going forward and really get ahead in terms of convening people, community engagement, these sorts of things that I think, you know, frankly,

the oil and gas industry did not pay a lot of attention to at the beginning of the shale boom, the unconventionals, right? And it really left a, it really left a bad taste in the mouths of a lot of environmental and climate groups, you know, which I'm a member of, right? So I think that, you know, geothermal in terms of scale, awesome, but we need to do a very, very good job of community the engagement of communicating the benefits and how awesome geothermal is. And also making sure that entities that are driving the scale, right, these 70,000 plants a year type of scale are convening folks that need to be at the table to talk about how to do that responsibly and with the lowest environmental impact we can have.

And if we do that, I think we win, right? But it's hard. That's hard. It's hard. That is hard. That's the hard stuff, I think, in geothermal. I agree. And honestly, this is one of these things that really every technology should be thinking about, and it is the hard part. So anyway, other folks should take a lesson here that more focus needed on this particular topic. But I want to switch gears a little bit because you mentioned that we might have geothermal resources in our backyard or in our community. So let's talk a little bit about the distributed scale, maybe starting with geothermal heat pumps.

And I know that, like, you know, heat pumps are very popular right now. But we're talking about a slightly different kind of heat pumps. So maybe we can talk about what's different about a geothermal heat pump versus the kind of heat pumps most people think of these days and talk about what it looks like to put geothermal in the distributed world. Yeah. So geothermal for heat and heating and cooling really vastly under-recognized way to decarbonize heating. And every time I read an article, for instance, that's talking about, you know,

how we're sure we're going to heat homes with hydrogen. I literally, I mean, it's a face palm moment, right? Because geothermal is just so much easier to do than that, right? And so we are literally overlooking the most obvious and easy path to decarbonizing heating for homes, but also commercial properties and industrial processes in geothermal. So, you know, most folks that have, you know, a heat pump in their house or are, actually likely to have an air-sourced heat pump. And essentially what heat pumps do is they grab heat or cold from the air and they put it in your house. I mean, just to be as simplified as

possible, they, you know, take what you need from outside and put it inside for you. And when you, you know, when you have a ground-sourced heat pump, which is a, you know, essentially a geothermal heat pump, You're doing the same thing, but you're just taking what you need, be it via heat or cold, from the ground. And, you know, the ground is really interesting. You can look at it this way. You know, there's a really consistent temperature in the subsurface, really not that far down. So you go a couple of feet down, and you're at a consistent about 55 degrees Fahrenheit, which, you know, you think about that about that and you think, oh, well, that's not going to heat my house. But look at it this way.

if it's 20 degrees outside and you're starting with 55 in your house, you only have to heat your house 15 degrees to be pretty comfortable as opposed to from 20 to 70, which is a huge amount, right? So you're saving energy by using a heat pump, right? That's the takeaway. And geothermal is a really awesome way to do that. There are some good startups out there that are running the race on, you know, geothermal as a residential and commercial heating, heating and cooling play. You've got bedrock, which I recently won a startup competition that I run at Pivot

at the Pivot Conference. And then there's, you know, there's Dandelion who's really been rocking it in terms of their scale, expanding to, you know, states all over the United States installing for residential. So lovely. I look at geothermal for heating and cooling as an energy efficiency play. So really what you're doing is you're trying to reduce our heating and cooling load that we need to provide from another source, right? So you're essentially, we don't have to electrify heat. We don't have to put, use hydrogen for heat, whatever, right? We're reducing that load to the smallest amount possible. So then we can use another source to provide just that little amount of heat that we need to heat our homes so what's comfortable, which can also be geothermal, right? But it could also. be other things like solar and wind electrified. So, you know, I love, love the concept in terms of, you know, heating and cooling in geothermal. Really the places in the world that are leading the

charge there are EU countries. Geothermal for district heating has been around forever. I mean, it's very, very old technology there. So you're talking about having a whole town or city networked underground to be heated and cooled by geothermal. And these are well-understood, technologically-enabled systems that are just no-brainers. We're slowly starting to see district heating systems take toe here in the United States. I love that. So you're seeing utilities, typically natural gas utilities,

that are starting to get interested in installing these systems and building pilot projects. That's very cool. Yeah, really exciting. Virtual power plants are becoming a reliable way for utilities to manage capacity, but enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched, and being able to prove it, from the control room to the living room.

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data centers, but the future of energy isn't shaped by technology alone. It's shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my brand new show, Critical Capital, as I talk with people deploying capital, shaping policy and building projects. Together, we unpack how risk is priced, how incentives are structured, and how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts.

As a randomest side, I was in a town in northern Japan one time where they have a hot spring and they run hot springs water underneath all the streets throughout the town, which is just the coolest thing. So we were there during this gigantic snowstorm.

Yeah, it melts. And all the streets just stayed clear the entire time. It was very cool. Yeah, that's awesome. A natural take on like Bill Gates electrified driveway in Seattle or whatever. Really, it was very,

Very awesome. That's pretty cool. So just one more thing on this point about the sort of distributed world, maybe we can put a little bit more of a fine point on some of the differences between air source heat pumps and geothermal heat pumps because it seems like the focus is really heavily on air source heat pumps right now. And so I'm wondering if that's really a cost thing. But I'm also wondering, you know, there are some folks who have a pretty negative opinion of air source heat pumps because of some of the performance issues that happen particularly in colder climate. So does geothermal help solve that? Yeah, it does. What are some of the tradeoffs here? think about that, right? So when you're taking, when you're wanting to take heat from very, very cold air, when you're sourcing from air, you have to deal with the temperature of the air, right? And in more extreme clients, like climates, like very, very hot or very, very cold climates, air source heat pumps just aren't very efficient because you don't have a lot of work, you don't

have a lot to work with, essentially, from temperature extremes and air. Geothermal is entirely different, because you know what you're dealing with. You go a few feet underground and you are at a steady, consistent temperature year-round with very few fluctuations. So you can see, like the efficiency of a geothermal heat pump system is going to be consistent and predictable

because the ground temperature is consistent and predictable. Cost, though, is an issue. And, you know, it's an issue with air-sourced heat pumps, but it's also, in particular, for geothermal heat pumps because you actually have to drill. And you have to drill very far, but you have to dig a hole this deep enough to put to lay your pipes

and you have to, you know, you can lay a horizontal pipe field or you can lay a vertical one if you have a small footprint. But either way, anytime you have a drilling operation where you need to lay pipe underground, you're increasing cost, right?

So, you know, there are, you know, incentives. Some states have incentives. the IRA has some incentives for heat pumps. There is a lot of focus on air source heat pumps. I hope that changes because you're absolutely right. And unfortunately, the worst thing for geothermal would be to get an association with air source because they're both called heat pumps

that's not fair, right, in the geothermal context when geothermal actually performs much better. So fingers crossed that the dandy, you know, the dandy lions and the bedrocks of the world can run the sprint and, you know, and really get a, you know, build a market for geothermal heat pumps. Right. Yeah, it seems important that it's at least part of the conversation, particularly in these areas where it's, yeah, where it's a little difficult to do air source heat pumps. So that's great. Okay, so then kind of rounding out the technology discussion here, because we talked a bit about the need for, you know, drilling improvements and, you know,

basically getting into the subsurface and doing better characterization. But geothermal can also do some other interesting things. Like there are some sort of co-benefits, I guess, that we might put in the geothermal plus category. So getting at lithium extraction, for example, and also the geothermal and storage nexus, can you say a little bit about what's coming down the pike in those categories? Yeah, there's like, there's even more than that. So you can do geothermal in CCUS. You can do, you can do geothermal plus a waste heat play, right? You can do geothermal as energy storage, although you may have just listed that and I forgot. But, but anyway, And geothermal as a baseload, clean electricity source for production of green hydrogen as another.

So, you know, there's ways to sweeten geothermal projects in certain contexts. And there are funding entities that are looking at that as a way to make the project economics more interesting for some geothermal projects that are on the margin. The thing, you know, the thing that I hope doesn't happen is that we focus on. on geothermal for its waste products and not because it's just freaking awesome. Because geothermal by itself is freaking awesome, right? And so when I see geothermal in the media as a lithium play, really, I mean, if you look at it, if you back up and look at that, what you're thinking is, oh, okay, good, we'll use this clean, awesome, ubiquitous, base load energy source to mine lithium to make batteries

so we can, you know, build more solar and wind. what are we doing? Why are we doing that? I mean, just use geothermal. You know, so, again, like, it's, it seems really inefficient. But at the same time, I get it. Like, there are some places in the world. And these are hydrothermal projects. So, you know, not necessarily geothermal anywhere, which is going to be different. But, you know, hydrothermal projects where the, the, the geothermal fluids that they're producing at the surface, so the, you know, the water that's underground is actually in. incredibly rich in high quality lithium. And, you know, the question is really a technology question of how do we really efficiently mine that really fast as it flows through our system, right? And there are, you know, there are companies that are on that. You know, that's controlled thermal resources in lilac, for instance, in California. So love it.

A geothermal, I am convinced is awesome by itself, but anything that sweetens the deal. That's great. There's a lot of entities right now that are interested in this, you know, CO2 plume, CO2 sequestration play with geothermal. We're actually using geothermal to produce electricity, but also to sequester CO2. So, yeah, awesome. If the economics work, go for it. Can you say a bit more about how that, how geothermal and CCUS play well together? So what does that look like? You can certainly generate the electricity to do the carbon capture, but is there some sort of co-benefits to the sequestration piece of this? Yeah.

So if you look at geothermal, you know, if you look at, for instance, depleted oil and gas fields as potential geothermal production units, they're also potential carbon sequestration fields, right? So you've got a lot of poor space in the rock that used to have fossil fuels. We've now produced those fossil fuels, and now it's poor space. And, you know, oil and gas is actually, you know, most, you know, a lot of people don't necessarily associate this, but there's a lot of places in the world where oil and gas is hot. I mean, the rocks that you're producing oil and gas from are actually, you know, really hot.

And so much so that the oil and gas comes out boiling. I mean, it's just really, really hot under the subsurface where the oil and gas existed. Now, that's not on purpose. Oil and gas doesn't go and look for the places that are hot. because that actually makes their lives harder in terms of oil and gas production. But it does produce a really interesting opportunity for geothermal. Because in depleted oil and gas fields that are hot enough, you could actually sequester carbon in the pore space

that used to have fossil fuels in it, while also, you're, you're, you're, it's CO2. So remember the supercritical CO2 is a working fluid thing? So you actually cycle the CO2 through the system, produce the heat to the surface, produce electricity or industrial heat or whatever you'd like to with it, and put it back, right? So that's how they play together. And it's really, it's an interesting thought for places in the world that are geologically fit for carbon sequestration. And that's a big question. So I'd caution on that. This sounds awesome. You know, it's really easy, no, not necessarily,

right? And so that's why we don't have massive amounts of carbon sequestration going on in depletion. oil and gas fuels right now, right? It's a little bit complicated from an engineering standpoint, but if these concepts develop over the coming years, it's a really interesting thing. I mean, why not pair them? Go ahead, right? That's awesome. This is great. So moving on to the next question. So Ju Thermal is kind of a unique technology in that there are things that are really in sort of the production, like financeable, big companies are doing at stage. There are some new technologies that are getting backed by VC. There's, I'm sure, you know, a pipeline of things that are really at sort of the lab bench, you know, research phase.

Let's talk for a second about what the funding and support looks like at those phases. You know, I assume that there's funding available if you know what you're doing and you're developing a pretty traditional geothermal resource. But how are things looking really in, you know, venture and sort of the middle stages of growth for some of these companies and how are things looking at the earlier stages of the pipeline? Are we well funded and well-resourced to do the work we need to do to hit these triple winds and really get geothermal on the map, or is there more that's needed there? No, we're not. Not even close. I mean, this subject makes my blood boil. I mean, because we are all yelling and screaming about how much of a climate of everything's on fire,

the world's on fire. Hurry up. Literally. Deploy, deploy, deploy, right? And, you know, there are teams, there are new startup companies and entities, in fact, bigger entities that are ready to get into the field right now with first of a kind, novel, right? First of a kind, which is a key, geothermal concepts that could be scaled globally. So we're talking about geothermal anywhere stuff. Huge win if it happens. And they can't get funding. And that, you know, this problem is a, is really, really holding geothermal back right now in terms of geothermal anywhere or hot dry rock concepts, right? You have science projects, you know, but when it comes to, you know, real, you know, commercial demonstration, but they're first of a

kind, so they've never been done before. I could, you know, there's 20 teams globally right now that could be in the field building a geothermal project that can't raise the 30 to 50 million dollars they need to go out and drill the well and build the plant. And I think that is completely unexcusable. Like we have got to figure that out. Either that or stop screaming the house is on fire. Because screaming the house is on fire, you know, if we're going to scream, we need to start doing something about it, right? And that means figure out what the pain points are and solve them, right? So, I mean, honestly, this topic drove me into Project Interspace, which is my current, you know, philanthropically funded nonprofit that's trying to figure out how to, how to bridge funding gaps for geothermal. Because

this is just a problem that is ubiquitous right now. And it's across all entities, government and VCs and private equity. And, you know, it's why I had to raise money sometimes from philanthropists to close geothermal deals. And I think that is really odd. That is a really odd thing. You know, what this is, it's really interesting. But we need to fix it. Yeah, I mean, well, I would argue that, you know, whether or not we scream, the fact of the matter is the house is on fire. So in the vein of working to actually solve the problem. So what solves this? I mean, it sounds like a really acute need right now at the demonstration phase.

The Department of Energy has a new Office of Clean Energy demonstrations. What's coming down the pike with DOE? Anything that we know that's going to change the game for some of these companies, either in those phases or even in some of the earlier stages of development? Well, look, you'd think with the Inflation Reduction Act, I mean, you know, ITC, PTC, awesome for geothermal. great, perfect, great. It is improving conversations with funding entities

that are more typical project finance type of entities, but at the same time geothermal has a very unique issue which is there's a little bit more pre-project subsurface risk than you'd have in say a solar project or a wind project, right? And then you've got a first-of-a-kind problem

which you're trying to deploy things that are doing new stuff like, for instance, supercritical CO2, I mean, a new type of turbine, a new type of hydraulic fracturing, a new type of anything, right? You're introducing risk in terms of funding entities. So, I mean, hey, look, when it comes to the government, Department of Energy in the United States, you know, they have, you know, there's a lot of money floating around in the loan programs office now as a result of the IRA. there's not been a lot of traction in terms of, you know, trying to get some of these first-of-a-kind, geothermal anywhere projects off the ground. I would, you know, love to solve that problem, but it's, you know, I'm not sure what the hold-up is there. But I think that there needs to be focused attention on talking with the right entities who know what they need, right?

So, you know, we need to make sure we're listening to the entities who are producing and developing the projects and listening to what they believe their risk profile is. And then we need to be coming up with creative solutions. Like, how can we ensure these projects then? Or are there other mechanisms that we could use to bring to bear where you have some sort of government guarantee? You bring a consortium of entities together to manage the risk. this may require some creative thinking, but oh my God, house on fire, right? I mean, I just, there's no reason why this should not happen, right? In terms of the loan programs office or, you know, first of a kind deployment initiatives

and other parts of the government, you know, and it could happen. There are some things coming down the pike, not just in the Department of Energy, but also, you know, in the Department of Defense. for instance. Well, so you've mentioned the loan programs office a couple of times, and one sort of random, fun historical fact that I happened to know, because I spent some time studying loan guarantees that DOE has done throughout history, it turns out the very first loan guarantee program DEOE ever put together was a geothermal loan guarantee program in the late 70s. And it was actually, in my view, very successful. They funded eight projects, and about four of them were successful. The other four

went belly up, which in my view is the kind of risk the government should be taking on things like this. I completely agree with you. So hopefully, hopefully, you know, we can get this figured out. Laura, I hope they're listening and I hope they heard what you just said. Let's hope. Let fingers crossed, right? I completely agree with you that it is exactly the type of project that should be supported by the government. So we are on the same page there, absolutely.

And so one sort of last and potentially unfair question about how to put all this together. So, I mean, there are a bunch of different kinds of money that we could theoretically try to bring to bear to solve this demonstration. problem. You mentioned insurance, which is one of my favorites. I interviewed Jeff McCauley a while ago to talk about different ways of applying insurance in the clean tech sector. And so you've got insurance, you've got philanthropy, you've got government money, you've got potentially catalytic capital coming through the philanthropic sector. So there are all these potential ways to get out this. Do you think there's like one sort of stack of capital that makes sense for first of a kind geothermal? Or do you think it's going to depend a little bit project by project or do we not even know the answer to that yet?

Yeah, so the way I see it is this, we just need to get all the teams into the field. We're not talking about a gigantic amount of money in the scheme of things. I mean, a billion dollars could launch every team I'm aware of into the field. That's, I mean, look, that's a drop of the bucket compared to the climate problem. And if we end up with one or two of ten concepts that get launched, that's scalable, awesome. I mean, that is a huge success, right? So, you know, when you're talking about, you know, hundreds of millions or a billion and not double-digit billions, this just, it becomes an absolute no-brainer. So, you know, I think, you know, over the last couple of years, I have come to understand that I think it's going to take a consortium approach, right?

It's going to need to be a syndicate of different types of entities that have, you know, appetites for different levels of risk that agree. Because, you know, really, you know, if you launch a team and they do a first, of a kind, well, it's probably going to take two or three or four to perfect that concept, right, to get it efficient and to get it working the way that, you know, that's optimized. And I think we need a consortium of entities that would be willing to see the team through that first five, not just the first one. The first one would be really helpful. But what would be ideal in terms of speed is let's find a consortium of entities that will do the first five, right and then you end up with an optimized scalable geothermal you know hot dry rock geothermal anywhere

geothermal concept um that has been risk managed across multiple entities instead of just one right so you'd pull together from that off takers like you know large energy consumers who you know that really would love to have for instance a you know a geothermal microgrid data centers for instance for instance these really infrastructure critical type of needs that would love to have a small footprint, baseload, clean energy source on their property, right? They could be part of the syndicate as well as the government, as well as some sort of insurance, right? And if you pull all those entities together, we might end up with the right mix. The question is, how do we get there and how do we do that as quickly as possible?

Well, that's getting over that initial hump right, I remember talking to one CEO of a geothermal startup who said, you know, I could get funding easily to do a project here. I just need five years of operational data. And then he's like, the problem is I need funding to get a project going to get those five years of operational data. So there's like just a getting over this like this first wave. We should not be waiting for five years of operational data. The reason he needs that is because he, you know, he needs to get funding for a second project. And that's why we need to fund five outright.

Bam, bam, bam, bam, bam, stamp them out one after the other, iterate, iterate, learning curve. and have some sort of syndicate that's willing to do that fast, right? So we don't want to build the first one and wait five years and see, right, because that is an obstacle that we need to remove if we want to go fast, right? That's not fast. That's not fast. Fair point. Okay, so we've talked a little bit about what DOE could be doing.

Let's talk a little bit about what DOE is doing. We've obviously got the Office of Geothermal within EERE. there's a long history of supporting geothermal. What's going on at DOE? Well, so DOE has the geothermal technologies office, or GTO. And GTO has, for the past several years, been running a project called Forge. So this is a Utah project that is testing engineered geothermal systems. So geothermal systems that are utilizing hydraulic fracturing techniques in really hot basement rock.

So hard rock drilling. So what they're going for is the really hard stuff, you know, the stuff that's really, really difficult to drill. So, you know, that project has been ongoing for several years. In, you know, really since I started my work in 2020 with the Geothermal Entrepreneurship Organization and now Interspace, Project Interspace, you know, DOE has come around to, I think, seeing the oil and gas industry as a real resource. when it comes to new methodologies, new technologies, innovation and know-how, and a way to go really fast. So, you know, they've started engaging

with oil and gas entities on the Forge project. They've started funding some teams with oil and gas, oil and gas participants. They've started engaging with some of the geothermal startups that are coming out of oil and gas. And most recently, we saw a new program called Geode that was launched actually at my conference. conference pivot that is aimed at really tech transfer from the oil and gas industry into geothermal.

And I find that to be really, really, really key. I mean, if we want to go fast and we want to do this at scale, we're going to have to leverage that entire industry. So geode is a first step. I would say it is a drop in the bucket in terms of funding. And so, you know, there are some. some bigger, more earthshot style initiatives that I think we'll start seeing come out of the DOE here in the next, you know, in the next real imminent future. So hopefully we'll see some movement from the DOE that is significant enough to move the needle on deployment, but also in outreach with the oil and gas industry, which I think, I mean, really this comes down in my view to a human resource.

problem, not a technology problem. And I think when you start talking about outreach and working with polarized groups and when things get political, things get really, really hard, really, fast. So fingers crossed on these initiatives, but I think that's the real hard part. Yeah. Well, let's dig in on that hard part for just a second here. Because, you know, part of what I'm seeing is that we're watching play out in real time an example of how not to do workforce transition with the coal industry, right? We've basically, I think, done a very terrible job of trying to meaningfully make sure that people have good jobs to move into in a way that gets a lot of communities behind, you know, the out-of-cold transition we're all hoping to see. Yeah.

So maybe we have an opportunity to do a little bit better on the oil and gas side. And this seems like a really interesting technology option that allows utilizing a lot of the same assets, skills, and workforce that already exist. So say a bit more about what we can do there and why we're not screaming that from the rooftops that this is a way to get at the clean energy transition. Oh my God. I'm screaming it from the rooftops. I mean, like, yeah. Yes. Everything you said, yes. So my motto and, you know, what drives me really is if we want the oil and gas industry to do something different and we recognize that that industry has a hundred years of incredible know-how knowledge, expertise, technologies, enormous amounts of skills and millions and millions of skilled workers, then it would be in our benefit in the world to figure out

how to integrate that incredible workforce into our future solutions, right? And how do you do that? Well, you do that using what they know how to do. What do they know how to do? Well, they know how to explore for, drill for, and produce a subsurface energy asset. What is geothermal? A subsurface energy asset. Bam. I mean, why people aren't screaming from the mountaintops, you have completely got me. Because like for me, and it really resonates in oil and gas, right? I mean, we want to turn the ship, we recruit the sailors. It's not even hard to recruit oil and gas into geothermal because they love it. It's what they know how to do. It's a really interesting set of problems. It's something, and they're, you know, bringing a lot to the table

and solving challenges. And it's exciting, like talking with some of these startup companies who have executives with 40 years of operational experience and Shell and BP and B.P. and HALBURT. I mean, they are so psyched about this problem set because it is leveraging everything they did their entire career, right? So instead of looking at this amazing workforce and all of their skills as the future solar panel installers of the world, we need to be looking and saying, you're the future drillers. You're the future of drilling. And you can do what you know how to do. And you can solve this huge global problem. And oh, by the way, meet global energy demand by 2050. Let's go. Right. That message resonates like crazy in oil and gas. It really isn't hard. It's not a hard

to sell. I think where you start running into problems is when I call, you know, ex-international environmental organization, and I say, hey, how do you feel about, you know, a geothermal future where you've got massive scale, massive global scale. Yeah, yeah, sounds good. Okay. How about if Chevron is the entity that's scaling it or Exxon or Shell? You know, take your pick, right? Does that change your view? It always does. Right. So, So instantly in those conversations, it becomes well. And so I think what that well is is historical mistrust. It's 100 years of fighting and bias and polarization.

It has little to do with geothermal. But geothermal is going to carry the baggage of 100 years of fighting between the hydrocarbon industry and environmental and climate. groups. And that, navigating that, I mean, it will be incredibly important to, you know, making sure that we can achieve fast scale. Because if we get bogged down in fighting and lawsuits, right, I mean, it's, it, we won't, we won't be able, we won't make it, right? Geothermal won't make it. So it's bridging, it's bridging those gaps, right, and trying to build trust that I think is going to be the really hard work over the coming couple of years.

Yeah, no, I mean, I get that. I have to admit that I don't think I ever thought I would be as excited about a technology that Halliburton is also excited about in my career. But that is an opportunity. I mean, imagine how, what, that is an amazing opportunity, right? How many times has that happened where you've got, you know, I wrote a grant application a year ago, and I had, you know, letters of support from gigantic, oiling gas entities and environmental groups and unions.

When has that happened? Like, it just doesn't. And so that makes geothermal a really unique opportunity where we can find a narrow path, right? We don't even need, let's put the stuff aside that we're never going to agree on. What we can agree on, and we don't even have to agree about why we like geothermal,

because honestly, it's a separate set of terminology. For environmental and climate activists, it's saving the planet, climate change, If you go to Texas and you ask about geothermal, it's energy security, it's workforce development. It's these sorts of things, right? It doesn't matter because these are all great. Just go. Like you agree, right?

And you don't even have to agree why you agree. Let's just make it happen, right? I love this. Well, I think that's a fantastic note to end on. Like, just go. Let's make it happen. Deploy, deploy, deploy. Deploy.

I have to admit, Jamie, I was really. excited about geothermal coming into this conversation, and I'm like triply excited, not just because of like the energy you bring to this, but because like these are some really serious opportunities for scale. Oh my God. Some really serious opportunities for community building. Like, I don't know that it gets much more excited in climate tech than that. Woohoo.

So I can't thank you enough for having this conversation with me. This has been really awesome. Awesome. And we'll be in touch. This has been super fun. Thanks so much for having me. Jamie Beard is the founder and executive director of Project Interspace, a nonprofit focused on expanding the use of geothermal energy globally.

What did you think? What did we miss? Let us know. Find the show on Twitter at CatalystPod. You can't find me on Twitter, but you can find me on LinkedIn. And if you liked the show today, go over to Spotify or Apple Podcasts and leave us a rating and review. The show is a co-production of PostScript Media and Canary Media. You can head over to canarymedia.com for links to more information on today's episode.

And as always, PostScript is supported by Prelude Ventures, a venture capital firm that partners with entrepreneurs to address climate change across a range of sectors. These include advanced energy, food and agriculture, transportation and logistics, advanced materials and manufacturing and advanced computing. This episode was produced by Daniel Waldorf and Dalvin Abouadje, mixing by Greg Vilfrank and Sean Marquand. Theme song by Sean Markwand. Our managing producer is Cecily Meza Martinez.

I'm Lara Pierpoint and this is Catalyst.