Power and Renewables

The Geography of Geothermal LCOEs

byGraham Bain

Geothermal energy in the U.S. is gaining ground, thanks to initiatives like the Enhanced Geothermal Shot which aims to reduce enhanced geothermal systems (EGS) costs 90% to $45/MWh by 2035. The U.S. Department of Energy’s $31-million funding for geothermal tools, $60 million towards the funding of three EGS projects and the bipartisan bill aiming to align geothermal with oil and gas regulations demonstrate increased governmental support. Furthermore, Texas’ Senate Bill 785, clarifying that geothermal energy rights belong to landowners, signifies a major legislative advancement.

Recently, Fervo Energy and Eavor Technologies have marked significant progress in geothermal technology. With their recent EGS success, Fervo raised $244 million, with Devon investing $90 million, highlighting its potential. Additionally, Eavor secured $182 million, backed by BP and Chevron, advancing its Advanced Geothermal Systems (AGS) technology. These achievements underline the growing investor confidence and technological advancements in the geothermal sector.

Considering these advancements in policy, technology and funding, Enverus Intelligence Research’s (EIR) Geothermal Report and Geothermal Model evaluates conventional, EGS and AGS project LCOEs for more than 3000 counties in the U.S. As expected, the traditional hotspots in the West – including California, Nevada, Idaho, Colorado and Oregon – screen well, as do pockets in non-traditional areas such as Montana, North Dakota, Nebraska, Oklahoma, Arkansas, Louisiana, Texas and Mississippi.

The report dives into the LCOEs of the different geothermal technologies and their sensitivities including drilling costs, temperature gradient, flow rates and more. It shows that LCOEs for conventional geothermal power, EGS and AGS can be as low as $64/MWh, $87/MWh and $123/MWh. These LCOEs are still almost $30/MWh higher than conventional renewables like wind and solar, but geothermal benefits from a rising need for stable baseload power to balance the grid.

Research Highlights:

CO2 Pipeline Economics – The Missing Link – This report dives into the economic intricacies of CO2 transportation through Enverus Intelligence Research’s CO2 pipeline economic model, exploring the costs involved and identifying strategies CCUS stakeholders can leverage to create efficiencies.

Texas Grid Storage Gold Rush – Keys to Unlocking Profitability – We explore what battery size, operating strategy and location for storage assets in ERCOT are the most profitable.

IPPSA 2024 – Realities of Implementing CER for Alberta Gas Generation – Enverus Intelligence Research analysts prepared these slides for presentation to a panel at the IPPSA 30th annual conference March 12. Natural gas-fired generation is the backbone of the Alberta grid. If gas generation is to continue to operate in Alberta under the proposed federal Clean Electricity Regulations, it needs to utilize carbon capture and sequestration and achieve stringent emissions targets. We examine whether this is feasible in reality.

Picture of Graham Bain

Graham Bain

Graham joined Enverus Intelligence Research (EIR) in 2020 with the acquisition of RS Energy Group. As lead of the subsurface group on the Energy Transition Intelligence team, Graham creates intelligent connections between the subsurface, emerging energy and carbon innovation technologies through a deep understanding of geosciences and the energy transition. Prior to EIR, Graham worked as an analyst for the Alberta Energy Regulator with a focus on the Athabasca oil sands, and as a geologist in training for a Calgary-based exploration company.

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