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Geothermal Power: Warming to a Global Opportunity

Alternative Energy

However, it’s not just oil prices that have played a part in the resurgence of deep geothermal exploration. From a technical standpoint, deep geothermal systems have been taking on minor roles as pilot or research projects over the last 20 years, and over the last five years global interest has significantly increased.

The Massachusetts Institute of Technology (MIT) published a paper in 2006 which raved about the possibilities of geothermal technology in the US. Consequently, the US government has now become the world’s biggest investor in geothermal exploration. Germany beat the Americans to it with The Renewable Heat Act (EEWärmeG); a law passed in 2004 which states that by 2020, 14% of the heat in Germany must come from renewable energy sources. Geothermal heat energy, unsurprisingly, plays a big part in achieving the Germans’ target. €500 million a year ($669 million) has been made available to help fund the cost of geothermal exploration and exploitation and, to date, Germany has four geothermal drilling sites and four operational geothermal power plants.

The financial backing and match funding on offer in countries such as the US, Germany and Australia has been a huge boon to the industry in each respective nation. Geothermal power plants have high initial costs but they become remarkably cheap and cost-efficient in the long term (while a nuclear plant lifecycle must include the cost of decommissioning the site and the cost of nuclear waste disposal). In 2009 Credit Suisse research put the base price of nuclear power at $62/MWh, and geothermal power at $36/MWh. It is winning the initial financial backing that has stalled the geothermal industry’s development, but a more structured support system guarantees return on investment for cautious venture capitalists.


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