CALGARY, Alberta (Dec. 17, 2024) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is highlighting industry trends emerging beneath the rapidly evolving enhanced geothermal systems landscape including utilities signing record-breaking geothermal power purchase agreements and major tech companies forming new geothermal partnerships.
“Geothermal developers need to sharpen their investment-focused messaging to unlock funding and accelerate adoption,” said Graham Bain, principal analyst at EIR. “With AI data centers thirsting for 153 gigawatts of low carbon, reliable power by 2050, geothermal energy’s scalability and quick deployment make it an ideal solution.”
“The recent success of enhanced geothermal systems and major improvements to drilling speeds and technologies are game changers,” said Bain. “The number of bits needed to drill a 5,000-foot lateral in granite has dropped from nine to two, leading to the quadrupling of drilling speeds. This is directly tied to cost reductions as drilling accounts for up to 90% of total installed geothermal costs.”
“We’re gearing up for a surge in geothermal energy,” said Bain. “Utilities are signing the largest geothermal power purchase agreements ever and major tech companies are partnering in the space. The era of cheap geothermal PPAs is over as its true value — three to four times that of solar with storage — is being recognized.”
Key themes:
- The era of cheap geothermal power purchase agreements (PPAs) is coming to an end. According to a study by Ormat, geothermal energy is valued at three to four times more than solar energy with co-located storage. California, for example, has included geothermal in its integrated resource plans, acknowledging its ability to deliver reliable, clean power while eliminating costly overbuilds. Other western states with high-quality geothermal resources are expected to arrive at similar conclusions and follow suit.
- Drilling companies have achieved a 450% increase in bit life, demonstrated by the reduction to two bits from nine to drill a 5,000-foot lateral in granite. This represents an incredible step to speed project development and lower costs, as drilling accounts for up to 90% of total installed geothermal expenses.
- Geothermal developers must prioritize clear, investment-oriented messaging to boost geothermal funding and adoption. Investors need insights into risk, return profiles, speed of deployment, modularity and scalability to enhance confidence in the technology.
EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research.
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About Enverus Intelligence® Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers and more than 40,000 suppliers. Learn more at Enverus.com.
