BP and Chevron on Tuesday made an expansion in the field of geothermal energy and bet on a new technology that could be the world’s first scalable clean energy obtained from a constant source: the earth’s natural heat,
The two major oil companies have set up a $ 40 million financing round in a Canadian geothermal energy firm called Eavor. Eavor is a pioneer in a new form of technology that can be applied in many places around the world.
The investment is a major move to an area otherwise ignored by energy companies, which have largely looked to wind and solar projects in their efforts to diversify from fossil fields.
This is the first investment in geothermal energy for BP BP,
and a re-entry into the field for Chevron CVX,
which sold its geothermal assets in 2016.
Eavor previously only accepted angel investments and venture capital. The $ 40 million injection will be used to advance research and development to make the power system so price competitive.
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“We see the potential of Eavor to complement our growing wind and solar portfolios,” said Felipe Arbelaez, BP’s senior vice president of zero-carbon energy. “Technology like that of Eavor has the potential to deliver geothermal power and heat and help unlock a low-carbon future.”
Eavor has developed a new kind of geothermal technology that, in very simple terms, creates an underground ‘radiator’.
The Eavor “Loop” consists of a closed loop network of pipes that are typically installed 3 to 4 kilometers below the earth’s surface, which originates and ends in the same above-ground facility. The pipes are installed using advanced drilling techniques that are perfect in the oil rig.
Liquid flows in the pipes from the above-ground facility through the warm underground environment, before naturally circulating to the top of the loop. The hot liquid is then converted into electricity or transferred to a regional heat grid.
A major advantage of this type of energy is that it is constant and provides a base charge of electricity to a grid system, without requiring challenging battery solutions of varying wind and solar power.
Shots of a virtual tour of Eavor’s full-scale prototype.
Photo courtesy of Eavor.
Unlike hydroelectricity, which relies on large sources of constant water flow, it is designed to be scaled down, and Eavor provides rigs that are installed under solar panel fields and in spatial areas such as Singapore.
Geothermal energy has existed for decades and enjoyed a heyday in the 1970s and 1980s before it largely fell out of the spotlight in the 1990s. Relying on heat below the surface of the earth, it has long been an attractive proposition for oil and gas companies, which have nuclear expertise in exploration and drilling underground.
The problem is that conventional geothermal technology relies on superheated water sources being found underground, making it expensive, risky and rare to connect. More recent advances have their origins in the shale oil boom and use hydraulic fracturing techniques to create the underground reservoirs needed to generate energy. But it can be a problem from an environmental and sustainability point of view.
The solution of Eavor does not require the exploratory risk of traditional geothermal energy or the earth like the hydrofracking of hydrofracking.
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John Redfern, president and CEO of Eavor, told MarketWatch that the system’s predictability, established in field tests in collaboration with Royal Dutch Shell RDSA, has been established.
is repeatable and scalable, making it much like wind and solar installations.
‘We are not an exploration game like traditional oil and gas or traditional geothermal. We are a repeatable manufacturing process and as such we do not need the same rate of return, “said Redfern.
‘Before we build the system, other than an oil well or traditional geothermal, we already know what the outputs can be. “Once it’s done, it’s super predictable,” said Redfern. “That’s why you can finance these things exactly like wind and solar, with a lot of debt at very low interest rates.”