Quick insight - Geothermal electricity - power from the earth's heat

Or - how new science could give a new lease of life to an old technology

Generating electricity using the heat from the ground is appealing. Drill down into your heat source, add a steam turbine, and generate electricity. What could be more sustainable? So, given this, why does geothermal only account for 0.5% of global renewable energy capacity, a level than has barely changed in decades?

The reason is simple, geothermal currently works if you live somewhere like Iceland or Indonesia, but not elsewhere. And if that was not going to change, it would be hard to make the argument that this is a topic that sustainability finance people really need to understand. Especially when there are other, more scalable solutions, to investigate.

But, what if the future of geothermal will look very different from the past? Could it become an important part of our electricity/energy generation mix?

There are currently two material barriers to scaling up geothermal electricity generation. The first is location; there are only a few places in the world where geothermal electricity generation currently makes technological sense. And the second is cost, with Lazard estimating the capital cost as being higher than most other renewables, and considerably higher than using gas.

But this seems to be changing. Pilots are underway that could allow geothermal electricity to be switched on and off on demand, allowing it's use as a alternative generational source when solar and wind are not available. This can be a much higher value market segment than simple always on 'baseload'.

This means the future of geothermal could different, moving away from being niche to playing an active and material role in offsetting the variability of wind and solar. Now that would make an interesting finance opportunity, wouldn't it.

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