Some predict that this form of renewable power generation stands to benefit from the changing times.
Last year, the U.S. Department of Energy pointed to the geothermal energy sector as being the country’s “untapped energy giant”, and this year the diving oil prices may allow the country to better see that potential.
The analysis explained that the flexible, “always-on” renewable power could grow 26 times over by 2050.
If that is the case, it would mean that the geothermal energy sector would be generating 8.5 percent of the country’s needs for electricity in thirty years.
This type of renewable power is unlike wind and solar as those generate only when it’s windy or in the daytime and when the sun is brightest. Unlike those forms, which are dependent on the weather for reaching their maximum generation capacity, geothermal is steady and predictable. That said, the technology for drilling and exploring for resources and for constructing facilities are notably more expensive than those for other types of renewables.
That said, factors reducing those costs, combined with improvements in technology, could bring this industry what it needs to shine. This may very well be happening right now, according to analysts and specialists, as the oil industry takes a dive, substantially reducing costs.
Factors causing the oil industry to suffer may be just what the geothermal energy sector needs.
Though the oil industry may be hurting, and oilfield services and providers stand to face even greater harm, areas facing their greatest expenses in the form of oil are benefiting. The geothermal supply chain also has a number of overlaps with the gas and oil industry. The reason is that the first step in using this renewable energy source is in exploring and drilling wells into areas where steam producing heat is located underground, explained Fervo Energy co-founder, Tim Latimer.
“As much as 50% of the cost of geothermal comes from drilling, so a plunge in oil prices can drop costs dramatically,” said Latimer. “In the last crash US Rig Count fell rapidly to below 400. This one will be even deeper. As a result, oil field services costs will likely drop 20-40% or more.”
This substantial cost drop could provide substantial development incentive in the geothermal energy sector, according to the GeoVision analysis by the DOE.