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Show Notes
Geothermal developer Fervo Energy has successfully brought online the first ever full-scale commercial power plant sourcing from enhanced geothermal systems (EGS) — a groundbreaking development both literally and figuratively. In this episode, Fervo CEO Tim Latimer discusses the company’s accomplishment and where flexible geothermal is headed.
Text transcript:
David Roberts
Traditional geothermal power, which has been around for over a century, exploits naturally occurring fissures underground, pushing water through them to gather heat and run a turbine. Unfortunately, those fissures only occur naturally in particular geographies, limiting geothermal’s reach.
For decades, engineers and entrepreneurs have dreamed of creating their own fissures in the underground rock, which would allow them to drill geothermal wells almost anywhere.
These kind of enhanced geothermal systems (EGS) have been attempted again and again since the 1970s, with no luck getting costs down low enough to be competitive. Despite dozens of attempts, there has never been a working commercial enhanced geothermal power plant.
Until now.
Last week, the geothermal developer Fervo Energy announced that its first full-scale power plant passed its production test phase with flying colors. With that, Fervo has, at long last, made it through all the various tests and certifications needed to prove out its technology. It now has a working, fully licensed power plant, selling electricity on the wholesale market, and enough power purchase agreements (PPAs) with eager customers to build many more.
EGS is now a real thing — the first new entrant into the power production game in many decades.
Here at Volts we are unabashed geothermal nerds, so naturally I was excited to discuss this news with Fervo co-founder and CEO Tim Latimer, an ex-oil-and-gas engineer who moved into geothermal a decade ago with a vision of how to make it work: he would borrow the latest technologies from the oil and gas sector. Ten years later, he’s pulled it off.
I talked with Latimer about how EGS works, the current geographical and size limitations, how he plans to get his technology on a rapid learning curve to bring down costs, the value of clean firm power, the future of flexible geothermal, and much more. This is a juicy one.
All right then, with no further ado, Tim Latimer. Welcome to Volts. Thank you so much for coming.
Tim Latimer
Thank you for having me.
David Roberts
Tim, this has been a long time coming. I've been tracking your adventures from afar for a few years now, and now you've reached a real milestone here, a real milestone for you, a real milestone for your company, a real milestone for geothermal power, which Volts listeners are like me, big fans of. So to help us appreciate the significance of the milestone in question, I want to back up a little bit and do some background first for listeners who have not, for whatever bizarre reason, heard my previous geothermal pods. So a couple of times we've talked and you've told me kind of this short, potted history of geothermal, the last couple of decades of geothermal, the sort of struggle to align the money and the attention and the technology and everything.
So maybe by way of starting just share that with our listeners, sort of like geothermal's struggles to take off in, say, like a post-2000 context.
Tim Latimer
Absolutely. Well, to do that, I probably have to explain a little bit about how geothermal works, which is straightforward in the idea, difficult in the implementation, but geothermal has been around for forever. The first geothermal power plant was built in Italy over 100 years ago. Major places like New Zealand, Iceland, and northern California built massive utility-scale power plants going back to the 70s and 80s. But essentially what happened is — as the choicest areas for drilling geothermal, the places that steam was literally coming out of the ground got tapped — we ran out of really good resources and technology couldn't keep up with the challenges needed to go deeper, go into less permeable areas, and still produce economic electricity.
So geothermal has been kind of a boom and bust industry. The big technology push for a long time was the idea of something called enhanced geothermal systems, which was a DOE-led effort going all the way back to the 1970s to try to incorporate things like hydraulic fracturing, advanced drilling techniques, better subsurface characterization, to try to solve that problem and let geothermal be a more widespread resource. But many of the early technical attempts came far short of expectations, and so the industry had fits and spurts a lot of unrealized promise that never came about. And kind of the two big waves recently, in the late 2000s, there was a big push to do more geothermal energy development. And you always think about what does it take for a new tech to actually get to market? Well, you got to have the technology there, you've got to have supportive policy, and you have to have market conditions that are ready to go. And so in the late 2000s, the market conditions were there. People started caring about carbon-free electricity for the first time in a really meaningful way. We saw state RPS targets come out. We also were in a world where people thought natural gas prices were going to be exceptionally high for a long time.
So people were concerned about how we were going to source electricity. And so there was huge demand for geothermal. And then between different initiatives like the loan program office and the R initiatives, putting funding into alternative energy resources in the late 2000s, geothermal really had a great moment. But what happened there is it was missing that third pillar, it was missing the technology area. So there were a lot of contracts signed, a lot of investment came into the space. There was supportive policy, but a lot of the visions of geothermal in the late 2000s sort of petered out as drilling results were underwhelming.
And as a result, it put us in this decade plus of time where there was not supportive policy in the US for geothermal, where there was not investment dollars coming in. And the irony of this whole thing is all of these drilling and subsurface methods that people had tried to make work for geothermal for 50 years, all of a sudden became viable and cheap and cost-effective because of the shale oil and gas revolution. So all of a sudden it wasn't expensive to drill horizontal wells and we could image the subsurface with high degrees of clarity, but for most of 2010s the new tech showed up and in an inverse of the tech was there, but there was no policy and there was no financing.
And so it's taken quite some time for this mix of better technology, supportive policy and market demand to coalesce. And it's really just been in the last couple of years where geothermal has finally had all the forces pulling together here.
David Roberts
Yeah, that's what we sort of tried to convey with my last pod with Jamie Beard on geothermal, just how everything's finally coming together. Right now, all the pieces of the puzzle are coming to place. It's a super exciting time. So I think most people get traditional geothermal power, right? You find an area where there's some sort of volcanic activity, which just means sort of tectonic plates rubbing on each other. So you have fractures underneath the ground and then you have water. When you push water through those fractures, it heats up. So you have one well where you push the water down, the water heats up in the fractured field and then comes back up the other well and you use it to generate electricity.
That is standard geothermal power. And as you say, that kind of geothermal power, which has been around for a long time, is confined to geographical areas where you find these fractures, where you find this sort of geological activity. So let's talk briefly about how to distinguish that traditional geothermal from the various other kinds we're hearing about now. There's a lot of terms flying around. So there's enhanced geothermal, there's super deep geothermal, there's closed loop geothermal. Maybe walk us a little bit through what is the technological landscape of beyond normal geothermal.
Tim Latimer
Yeah, so the nomenclature here, what the industry has kind of settled on, and the DOE uses this nomenclature, is that first type that you described, which is very descriptive, you know, Iceland, Kenya, northern California geothermal prospects. We call that hydrothermal. And hydrothermal is those areas that have natural high temperatures, natural high flow capacity, because there's these natural fractures and permeability in the reservoir and there's water to circulate. And those areas can be tapped with relatively traditional old school technology. That's why they were drilled out in the 1970s, even though we didn't have all these technology advancements, because the geology is just better suited for it.
Now, broadly, the umbrella of next generation geothermal is sort of any advanced technology method to go beyond those really shallow, high temperature, naturally high flowing resources and make them economic.
David Roberts
Is it the case that those natural areas, globally speaking, are tapped out, or is there runway there? How sort of like how at capacity are we for that kind of geothermal?
Tim Latimer
Well, the traditional geothermal industry, it's not small, but it is small relative to the total extent of the global power system. So less than 1% of global electricity, but really meaningful in certain markets. It's around 20 gigawatts installed. It grows by 5% to 10% a year. So it's not over by any means. And there's a lot of great investment in projects going on. But whenever you plot it against a resource like solar or wind and the growth that have occurred in those industries over the last decade plus, you can't even see that the line is moving because the axes are so different.
So always an important resource. It's certainly not tapped out globally. But when you look at the places that are on accessible land close to power demand that have the right natural resources, it's an industry that can produce a 5% to 10% per year growth rate, not an exponential rapid, world changing growth rate like we've seen in other renewables.
David Roberts
So then all the advanced is beyond that. And so what are the relevant categories there?
Tim Latimer
Right, so you mentioned super deep, for example. So geothermal economics are all dictated by at the end of the day it's how much flow rate can you get out of a well and how high temperature is that flow rate?
David Roberts
And flow rate is just how much water you can push through it for a given time period.
Tim Latimer
Exactly. And so if you want to make geothermal projects more economic, you have to figure out how to lower the cost of drilling or you have to figure out how to make the temperature you're working with hotter, or you have to get the flow rate higher. So those are sort of the three levers you can pull. One of the things you mentioned there was super deep geothermal, which is interesting, which is trying to change one of those levers, which is temperature. Can you go so deep that rather than, let's say, 200 C, which is a reasonable temperature for modern geothermal, can you do 500 C or 800 C and improve the economics through drilling ultra deep and having very high temperature output?
So that's sort of one way. And there's super deep there and then there's enhanced geothermal systems, which is what the DOE through the Utah Forge project and their research projects and then us at Fervo have been working on for a long time, which is, can you use methods that incorporate directional drilling, advanced drilling tools and well stimulation, principally through application of hydraulic fracturing, to improve the flow rates? So the way you improve the economics of projects is you drill wells still targeting that same temperature resource, but you do it in a way where you get so much more flow per well that it improves the economics and unlocks a much broader resource.
So all of these things are next generation geothermal and the extent that it's tech that unlocks a new class of geothermal resource that goes beyond that traditional older style technology that's been around for decades.
David Roberts
How do you slot closed loop geothermal? So the traditional geothermal and enhanced geothermal, both sort of they inject the water, in the ground, and then out of a pipe, and then collect the water at the other side into a new pipe. But then there's also this new closed loop, which is just the water stays in the pipe the whole time. Is that meaningful enough to be its own category?
Tim Latimer
Yeah, it is, because it's quite distinct from traditional geothermal or enhanced geothermal. It is definitely its own category where you're just flowing and recirculating through pipes in the ground and not through these large and extensive geothermal reservoirs. That's definitely a different category.
David Roberts
Right. And so is it fair to say that enhanced geothermal, which is fracturing more of the ground and improving flow rate, that's the one you're doing and that's the one that's right on the verge of commercial production. The other two are where in the cycle of things?
Tim Latimer
Both the other two — the nice thing about enhanced geothermal systems and the applications there is these are technologies that are very advanced and far along in their technological know-how. These are the technologies, like I say, that the Utah Forge site, which is supported by the Department of Energy, are proving out in real time. If you follow that project, every month there's a new advancement of that tech and they are commercially viable today, which is, I think, some of what we're going to talk about later, the results of our pilot project. The other technologies are both ones that still rely on radical technology breakthroughs in drilling technology.
So if you're talking about an enhanced geothermal system where you're drilling to 3000 meters depth and targeting 200 degrees C, which is really the area that the Department of Energy and Fervo is going after, we can do that today with existing technology. Getting the right cost structure or drilling down to 10,000 meters depth or 800 degrees C like some of these other projects: Very promising, lot of potential, there a lot of upside. But those are things that would require radical technology step changes in performance that put it more akin to the way that we look at fusion technology breakthroughs, where it's a big prize, it's worth pursuing, but we're certainly talking about deployment timelines that are ten plus or potentially several decades in the future to get those kinds of results.
David Roberts
Got it. So the advantage enhanced geothermal has is it is going to depths that are familiar to the oil and gas industry. And thus the drilling technology has been worked on and perfected absolutely by the oil and gas industry. Whereas you drill deeper, you start getting hotter, you start basically having to design new kinds of drilling equipment.
Tim Latimer
Exactly. And I can tell you Fervo in a lot of ways came from ideas that myself and my co-founder and other folks in the Stanford Geothermal Research Group started batting around over a decade ago. And one of the constraints we gave ourselves when we launched the company in 2017 is what is the most optimized, effective design that would produce attractive economics today with off-the-shelf oil and gas technology. Because anytime that you want to build a new tool to go down hole, you extend your development timeline by years or decades. And so what we were looking at is the performance curve of oil and gas drilling, because it did get ten times better in the last decade because of how many technological advancements there were in the oil and gas unconventional world.
We were looking at what you can do off-the-shelf, and has that off-the-shelf performance from existing oil and gas tech gotten so good that you can drill wells in an effective and economic manner for geothermal? And that was what we set out with our thesis to prove.
David Roberts
Which probably explains why you're the kind of first to the finish line. The starting line? I'm not sure.
Tim Latimer
The finish of the start line, I guess you could say.
David Roberts
Yeah, exactly. The end of the beginning.
Tim Latimer
The end of the beginning.
David Roberts
Let's talk then about what Fervo does. So, as we said, traditional geothermal finds these areas where there are fractures in the rock where you can squirt water through it and the water heats up. The whole idea behind enhanced geothermal is you make your own cracks in the rock. Basically, you fracture the rock, which is the same thing fracking does. Natural gas fracking cracks the rocks apart and natural gas seeps out. In your case, you just want to fracture the rock so you can squirt water through. So maybe walk us through kind of what the Fervo power plant looks like.
Tim Latimer
Yeah. So the idea behind enhanced geothermal, it works roughly the same as traditional geothermal, where you have those wells, where you pump cold water down injection wells and to calibrate here we are talking about wells that are 2000, 3000 meters depth. They're seven to 10,000ft deep, or in some cases, deeper. So these are really deep wells.
David Roberts
Yeah, you say shallow relative to the deep — but that's not all that shallow.
Tim Latimer
Yeah, shallow relative to deep. And this is one thing I've had to learn is these depths are quite different. And if you're not in the drilling world, we can often make the mistake of just assuming everybody knows what we're talking about. So I can be quite explicit. We're talking about wells that are 10,000ft deep here, which is mind-boggling in certain senses when you think about it, but very achievable when you think about the fact that the oil and gas industry has been doing this for 150 years, and that's what they've gotten exceptionally good at.
David Roberts
Yeah. So you have one well, the injection well that basically squirts water 10,000ft deep, cold water 10,000ft deep, then what happens to the water?
Tim Latimer
So, in a traditional geothermal system, it then finds that natural flow paths between the wells heats up to near the reservoir, temperature gets produced up the production wells, and then gets captured at the surface. And that heat is then used to power a turbine and generate electricity. And because you're using the natural heat of the earth to capture that energy, and you're not combusting something like coal or natural gas, there's no emissions associated with geothermal power.
David Roberts
Let's pause there for a second because I want to press on that a little bit. When we say no emissions, do we mean literally no emissions? Like, just how clean is all this? Is it literally just water and steam and there's no environmental externalities at all?
Tim Latimer
Generally, yes, there's obviously risk to projects that developers like us have to be very attentive to. But when we're talking about carbon emissions from modern geothermal power projects, and I'll explain that distinction in a second, we're talking about a system that is truly a zero-emission resource. And the reason I distinguish this modern geothermal is the other surface technological breakthrough that has become mature now and unlocking the resource that we're going after is the advancement of binary cycle power generation technology. So the vast majority of new geothermal that's built in the United States now is this binary cycle.
So if you go back to that first power plant in Italy 100 years ago, they had steam coming out of the ground and they slapped a turbine onto that steam and they generated electricity from that. And many of the power plants built through 2000 looked kind of similar to that.
David Roberts
Right. The steam itself was turning the turbine.
Tim Latimer
Yes. And in those more old, I'd call them old school, geothermal power plants that were very high temperature, the consequence of that steam powering the turbine is then as the steam would be flashed on the other side. If there were things in that geothermal brine that was deep in the earth that were produced, those would cause emissions. So in nearly all cases, we're talking about stuff that's dramatically lower carbon emissions or other emissions from coal or natural gas power plants. But in this older style design for geothermal, there would be some operational emissions just dependent on whatever's in your geologic fluid there.
Now, more modern binary cycle power plants are a very different design. And so rather than using the steam from the geothermal wells to power a turbine, what you use is heat exchangers at the surface that are closed loops. So the geothermal fluid is never exposed to the atmosphere at all, and it heats up a different working fluid. That working fluid then goes through a continuous cycle to power the turbine and the power cycle for geothermal. And then the geothermal brine is reinjected back down those injection wells with no losses and no emissions so if you look at the history of geothermal, one of the enablers of recent growth and one of the enablers of the technology approach Fervo is taking is these binary cycle power plants which have multiple benefits.
They allow you to do lower temperature geothermal than those traditional resources and still be cost-effective. And they also eliminate the issues related to emissions of any kind, including carbon emissions from geothermal plants. So when we're talking about modern binary cycle geothermal plants, we're talking about a very clean resource that has no operational emissions of any kind.
David Roberts
Truly zero. And the water, how sort of like closed loop are you on the water? Do you have water requirements? Like, do you require a constant supply of water or is it just you're just recirculating forever?
Tim Latimer
It's a very minimal amount because you are really recirculating forever. You know, people that are maybe familiar with the geysers in Northern California know that it declined and has water issues and has to source water from the local counties to make up for that depletion. But that's because it's using that system that has evaporative losses at the surface. Whenever you talk about a binary cycle system, it's much different because you're injecting all the fluid that you take up, so you're not losing fluid through that system. And so in general, you're talking about reservoirs that are fairly well connected in the subsurface, no water losses at the surface.
Once you go to sufficient depth anywhere in the world, the reservoirs are always what we call saturated. They're always filled with fluid. And so these geothermal systems, by and large, all we're doing is taking the fluid that's already in the geothermal reservoir and we're recirculating it over and over again. The only change that's happening is it goes down cold, picks up heat in the reservoir, releases that heat at the surface to create electricity, and then goes back again. But we're really just recirculating that same fluid flow for decades.
David Roberts
Do you deplete the heat at any rate? Or is the heat sort of eternally renewing? Is there such a thing as a decline in production in a geothermal well over time?
Tim Latimer
It's a good question, and the short answer is yes. But it's something that is sort of manageable and can be designed for. So you think about the actual — I'm an engineer so maybe I'll go engineer for a moment — you think about your actual energy balance of what's going on. There's a fixed quantity of heat in that block of rock that you're accessing with these wells. There's also a constant flow of new heat replenishing that. So your energy balance here is basically what are you extracting? What was there to begin with and how quick is it replenishing?
David Roberts
Right.
Tim Latimer
It turns out most geothermal systems, you could design them to only be produced at the replenishment rate with no decline period over time. But then you'd be sacrificing a lot on the power output to be doing sort of flow that's that level, and in general, the quantity of heat and we'll talk about this, I'm sure, later. But the geothermal reservoir that we're talking about, we're talking about cubic kilometers worth of reservoir, very hot rock. So that heat resource can last for many, many decades. So, in general, you do design these systems to have some temperature decline because that's a more economically optimum way to operate it, because you can get higher production results, but it's not a very significant decline.
Right. In a well-managed reservoir, this will be on the order of 1% to 2% a year. And you can always recover that either by drilling more and drilling deeper, and drilling and doing makeup drilling, or just slowing down fluid flow at some point in the future and allowing that replenishment to catch up. So geothermal is considered a renewable resource because the combination of how much heat content there is plus the replenishment means that these are extraordinarily long-life assets.
David Roberts
Got it. And so explain how you create fractures in the rock.
Tim Latimer
Yeah. So again, we're not the first to do this, and it's probably worth maybe reflecting a little bit on the original 1970s Fenton Hill experiments done by the Department of Energy, where there was always this concept that if you injected at sufficient rates into injection wells, even in areas that did not have all that natural permeability, that you could create fractures that could then carry the fluid from one well to the next. And so this is something that's been trialed for a very long time. But the distinction is that in those first tests that the DOE did in the 1970s and then in the subsequent let's call it 50 or so tests that have been done around the world, many here in the US some in Japan, New Zealand, you name it. Any country that's a big geothermal producer has usually run some sort of test on enhanced geothermal systems. The vast majority, actually, all of those were done in relatively simple vertical well configurations because that's all that the technology would allow for. And so, by and large, the metrics that we look at to be commercially viable are things like how much surface area are you accessing there for the equivalent of what your radiator is down there in the subsurface, and how much volume for flow can you get? And what volume of that heat through the rock are you actually able to access?
And doing it through a simple vertical well and a single zone approach just turned out to not come anywhere close to the metrics we needed to see to say, yeah, this is worth drilling. The output per well you got could not cover the expensive costs of drilling.
David Roberts
I suspect this is a dumb question, but my brain rebels a little bit at the thought of water pressure fracturing solid rock. It just seems like rock is real solid and water is just water. So what types of pressure are we talking about here?
Tim Latimer
Well, I'll say a couple of things on this. First off, are you a hiker? Do you ever go hiking?
David Roberts
I've been hiking before.
Tim Latimer
Yeah. So if you ever go hiking and you can sometimes look, and if you haven't looked closely at it, I encourage you to. Whenever there's, like, an exposed rock outcrop there, a lot of times you're going to see major fractures and faults just exposed in that rock outcrop. And the thing that's fascinating about geology, that's not just something that happens when that rock outcrop is exposed at the surface. You go 10,000ft down, and rock kind of looks the same way. There are these fractures and faults, and it's complex, and there are major forces down there in a way that can really just create these different shapes and fractures and faults in the subsurface either naturally or through some sort of design.
So it's something that happens all the time. And I don't know, since you asked the question, I guess I'll keep going down the engineering bent, which is when you look at actually how that rock breaks, what we're actually talking about is what we call tensile failure. So you're not actually crushing the rock right. You're actually creating enough pressure that it pulls the rock apart. And it's somewhat fascinating. Rock turns out to be extraordinarily strong in compression. You can stand on it. You can build pyramids out of it —
David Roberts
Right.
Tim Latimer
It's really strong that way. But then for a lot of rocks, you can just pull them apart with your hands because they actually have much less tensile strength, we call it.
And so what ends up happening in these systems is we can pump water down, and water is an incompressible fluid, so it carries pressure really well. So what we're doing in our designs and this is what has been done in a lot of designs for a long time now in the subsurface is we are picking very specific ports where we're opening up our well to that outside geology and that geologic reservoir and that rock and applying a lot of pressure right at that specific point. And it's enough pressure that actually can initiate these fractures, because, again, rocks are relatively weak in tension, and that's what kind of allows this to work.
David Roberts
So you're taking natural fractures that are already there and just widening them, or is it the case that you can literally cause a fracture in a solid piece of rock?
Tim Latimer
You can cause a fracture in a solid piece of rock. And again, this is a controlled system happening thousands of feet below. And we know to great precision what the dimensions of this look like. But, yeah, it's actually creating these new fractures that go out of the injection wells and into the production wells that create a new flow pathway that didn't exist before that allows for the controlled movement of fluid between that injection well and production well.
David Roberts
That is just wild to me that you can do that at all, much less at like 10,000ft down. What is the technology that allows you to see the structure of the rock 10,000ft down?
Tim Latimer
Well, we're doing all sorts of characterization work here. I think, again, I sort of opened the conversation here by telling you it's simple ideas that are difficult to execute. And actually, the first tool in our toolkit to actually characterize this rock is we can drill down with what's called core bits and actually hollow out a sample of rock that's 10,000ft down and pull it up and then go run a bunch of lab tests on it. So we're doing that work regularly. And that's sort of how you kind of create a baseline for this. Beyond that, we have all kinds of different tools in our toolkit.
And a lot of this is stuff that, again, didn't exist ten plus years ago or wasn't cost effective. That allows us to map out what's actually happening in the subsurface. So to your point, one of the challenges why it was so hard to drive innovation in geothermal, even though, like I said, the first tests for this were 50 years ago, was because you do the project, it wouldn't work. And then you'd be sitting around with a bunch of messy data and say, well, we know it didn't work, but we don't know why because it's 10,000ft below you and it's difficult to see.
So we have tools that our predecessors didn't have access to. And one of the things that we've invested heavily in and have a lot of innovations around now is fiber optic sensing. So actually, one of the things that we use in all of our projects that, again, when we did this, in a lot of cases, it was the first time this had been applied to geothermal. When we drill our wells, we actually lay fiber optic cables along the entire length of the wells. And we have a special data acquisition system where we send laser pulses down that fiber optics.
And because there's impurities in all fiber optics, those laser pulses get reflected back to the surface, and we can look at the reflections there and basically map out what those reflections look like in the fiber optics.
David Roberts
Wild.
Tim Latimer
Using that data, as we change things, we can get a very clear picture of what's happening in the subsurface. So, like, if you think back to your fifth grade science class, when stuff gets hot, it expands, right? When stuff gets cool, it contracts. So if we're trying to figure out, for example, how much fluid flow is going down each of these ports that we've opened up into the reservoir, we can actually look at the real time temperature change, because along that fiber optics, if it cools off a little bit, all those impurities get a little bit closer together.
And we can read that with our fiber optics and measure in real time the temperature along the entire well. And from that temperature we can figure out everything from how much flow is going where, how much of that is getting over to the other wells that we've drilled as our production and collection wells. We can also map the fluid pathways that are going in between these wells, even if it's hundreds of feet out into the rock. And this is stuff that has given us a data set that allows us to actually understand what's happening in geothermal reservoirs that goes far beyond any sort of data we've ever had access to before.
David Roberts
And so that's what we're using to measure and verify.
It's super gratifying to learn that lasers are involved.
Tim Latimer
Of course.
David Roberts
That's always good news.
Tim Latimer
You can't do any great technology without lasers. So we've got our lasers.
David Roberts
So the big breakthrough here is old enhanced geothermal. All these previous attempts, basically you got one vertical well. You're jamming water down it to create fractures. But you just create fractures basically in a sort of circumference around the bottom of the well, right? And the big breakthrough here is your well goes down and then across laterally and so you have water coming out of those lateral pipes at intervals, right? Like a yard sprinkler is the diagram on your website. So you're creating these fractures over a large swath of rock, basically. So you just get more fractures out of your well is the long and short of it?
Tim Latimer
Exactly. And so you think about what I said before. It's all about drilling is expensive. How much flow, how much surface area, how much volume can you get for each well that you drill. And so in our industry nomenclature, the term we use is zones. So every time there's fluid that's leaving that well and going from one well to the next, we call that a flow zone. And just to give a bit of history, I went to my first geothermal conference in 2015 and I'd started my career as a drilling engineer in the oil and gas industry.
I became passionate about climate change. I saw that there was a way to apply my skills as a drilling engineer to a carbon free energy resource that really seemed like it needed some help. And I talked to one of the leading researchers in the space and I was captivated with this idea of multiple zones. And what drilling horizontally allows you to do is put multiple zones in a well. So in our pilot project, what we've done is drilled 8000ft straight down and then we've turned perfectly horizontal, 90 degrees, and we drilled another 4000ft over. And so rather than just having one zone at the bottom of the well where we can choose to inject fluid, that gives us just so much more length to spread that fluid out.
And so when I was at this conference, I was talking to this researcher, a very respected person, a career person, and he told me that enhanced geothermal systems would never work. And I said, well, of course not. You can't get the right design metrics you need if you only have one flow zone, but I think there's an opportunity to do multiple zones. And he said, oh, we've looked at that too, and it doesn't work. And I was like, well, what did you model? And he said, well, we've done some extreme cases, we've even modeled up to three zones in one well.
And I looked at him confused, because if any of your listeners are familiar with how modern oil and gas drilling works, that's quite a bit different number. And I said, well, I was thinking a lot more than three. And so whenever you think about those specific targeted design flow ports that we open up and flow fluid through in these reservoirs, these zones, in our very first project that we just completed, we have 102 different flow zones.
David Roberts
So does that mean the water goes down and travels through all of those on the way to the other well?
Tim Latimer
Exactly right. Exactly right. And what's nice about this is because we have that fiber optic technology that I was talking about, we can actually verify where that fluid flow is going and show that we're getting good distribution across the entire reservoir. So the reason we've had different results and a step change in performance, and why we've made this commercially viable when past efforts have not been successful, is rather than thinking about can we go from one zone to three, we jumped straight to the answer, which is 100 plus zones. And that gives you a radically different result.
David Roberts
Yeah, well, this brings up one of my questions, which is, is there a physical or practical limit to the length of your lateral drilling? Like, you've got 4000ft now, and that gives you 102 zones. Could you do 8000ft and 200 zones? 16,000ft and whatever? Is there a limit to the size of one of these things?
Tim Latimer
There is, at some point, a limit. It doesn't become cost-effective to drill further, but we haven't come close to hitting what that looks like yet. So just to give you an example, we've just finished our first pilot project, and the intent of that was really to prove that this all worked. So we wanted to design something, even if it wasn't full scale. But every single bit, every single unknown question, every unknown technology assumption was proven out by this. But it doesn't mean we can't make it bigger, right? So to make that concrete, this system, we drilled right around 4000ft in the horizontal distance.
And we also spaced these wells about 400ft apart. And so you think about the amount of power you can get out of the system then is kind of bounded by that geometry. 4000ft long, 400ft across. That's what you're flowing the fluid through. Just to give an example of this and the flow test results that we've gotten from this and this is what we're excited to announce that this worked is we've gotten nearly the equivalent of 4 megawatts of electricity out of this two well system, which is a really great number. It starts talking about the success that this can be at the utility scale because you can do many of these wells in a single field.
David Roberts
You have one well going down, one well going up, and all these fracture zones in between that the water passes through. I'm assuming when you are building commercial power plants, is it just going to be a one well down, one well up type of situation or is there a limit to how many of those could you have? Multiple down wells, multiple zones, multiple up wells, all in the same area?
Tim Latimer
Absolutely. And that's what makes this so scalable and that's what brings out the potential here. This was an N equals one attempt. This was a first ever. We spent an enormous amount on data acquisition. We made a lot of design choices to make sure we were maximizing the learning from this and maximizing our chances of success. The really exciting thing we've learned about this, to get back to your original question about what are the limits, our very next project that we're going to, we're going to do larger diameter wells, we're going to space them farther apart because we collected the data that shows that we can do that.
And then rather than 4000ft, we're going to drill 6000ft in the horizontal direction. And so our next project, rather than getting roughly 4 megawatts of electricity from each well system, it's going to be about double that. And so that's sort of the next move.
David Roberts
So just larger wells just get you more flow, right?
Tim Latimer
Exactly. And then the other thing that's great about this, and I know your listeners also have been informed greatly about the importance of modularity and repeatability.
David Roberts
That's our next thing.
Tim Latimer
So here's the key for this that's very important. If I want to design now an 80 megawatt power system using this design, it doesn't mean I have to throw the book out, start over from scratch and design a completely different system. What I need to do then is take this two well system that I already know works and just do it ten times in a row. And so that's what's very exciting about this breakthrough that we're announcing today. This isn't something that like, oh, now we're going to go 100 times bigger. So we got to go back to the drawing board and redesign everything.
For us, going 100 times bigger means doing exactly what we've already done, but just 100 more units of it. And so this is the whole key of the repeatability of making this work. And the next site that we're moving to is going to be a 400 megawatt project, which means drilling wells just like we just did, but just a lot more of them. And in a very tight space, we can stack these vertically on top of each other, we can put the wells close together. And so another thing that people often care about when they look at energy resources is the surface footprint.
David Roberts
What do I see if I go to Nevada? How big or small is your surface footprint?
Tim Latimer
Well, what's left at the surface when you're done drilling these wells is a well head that's a few feet tall and a couple of feet wide. And that's it and it's actually quite an underwhelming thing. I've taken many visitors out to our site and they expect to see something dramatic. And —
David Roberts
Just the hole.
what you end up seeing is a piece of metal that could fit in your living room. And so that's what's left. Now, of course, we have to connect it to power plants, and the power plants look more like they're warehouse-sized buildings.
Tim Latimer
But what's beautiful about the directional drilling that we're using in these projects, another thing that you couldn't do with traditional geothermals, you have to imagine the wells have to be spaced a certain distance apart. And if you're drilling vertical wells, that means if you want your wells to be 500ft apart at the bottom of the hole, they have to be 500ft apart at the surface. If you go visit a traditional geothermal site, oftentimes every new well is a different well pad and it can be spread out over a wide area. Now we're using directional drilling, we have tight control over where we drill these wells.
So we can put many, many wells on the same well pad and just drill them out in different directions using directional drilling. And so geothermal already among all the energy resources, typically scores top or near the top in terms of energy output per unit of land used. And this is actually going to be significantly better than traditional geothermal because we can put many of these wells that once we're done, have a very small surface footprint altogether on the same pad.
David Roberts
But do you need like, you're starting from that central well pad, that's your injection wells, and you're going out 4000, 6000ft in different directions. Do you have to own all that land that you're going under? Because you'd have to at least own a lot of land, even if you're not sort of like marking it?
Tim Latimer
Yeah, you do not have to own the land. The Geothermal Steam Act of 1970 was passed and signed into law that created a new mineral class for geothermal lease rights. And so what our company owns is not the land itself, but we own the exclusive right to access and develop the geothermal resources for this land. So what we have is a really small surface footprint. And then the wells, as they go, know, we negotiate with landowners. Which because a lot of these resources are in the Western US, a lot of times the landowner ends up being the US federal government.
David Roberts
Yeah, right.
Tim Latimer
We negotiate and sign contracts to specifically develop the geothermal resources that are found thousands of feet below the surface.
David Roberts
But if I'm on the land that that lateral well is going beneath, I'm presumably unaffected. Like you can have buildings and farms and whatever, 4000ft down presumably is not going to bother anybody.
Tim Latimer
Absolutely. Some of the more interesting geothermal power plants you can visit are in urban areas. You could do like a little geothermal tour of Munich, for example, where they have all of these geothermal power plants that also power district heating systems that are plopped down right in the middle of the city of Munich. And there's examples of that all around the world. The stuff that's happening thousands of feet below our feet has no discernible impact on the surface at all.
David Roberts
The big promise has been geothermal anywhere or geothermal everywhere. You're going down 10,000ft to what, 300, 400 degrees, you said?
Tim Latimer
Yeah, it's about 10,000ft. And the temperature we target is roughly 400 degrees Fahrenheit.
David Roberts
So, is it the case that if I throw a rock at a map of the United States anywhere I hit, if I go down 10,000ft, am I going to find 400 degree rock? In other words, could I build one of these theoretically anywhere?
Tim Latimer
No, not anywhere. But for me, the key question is always not can we do it anywhere, but can we do it in enough places that it makes a difference? Right. And to use an oil and gas analogy, you can't drill anywhere in the world and find oil. But that doesn't mean that oil is not an important global commodity to the energy system and geothermal is not any different. The key is can you drill in places where it's economic to drill and you can access the electric grid so you can sell your power to customers. And there is an enormous amount of that in the United States.
David Roberts
So that's the limit. The limit is connection to the electrical system. Like physically you could do it anywhere, you just can't port the power out.
Tim Latimer
Yeah, well, there's wide variations in what we call geothermal gradient. So, like where we're drilling our projects, you get to 400 degrees F at 8000ft or so. There's places that are a lot cooler where you'd have to drill to 20,000ft to get to that te