Canada: Existing Policy Support for Renewable Energy is Currently Insufficient for Development of Geothermal - Opinion

Can we use geothermal instead of hydro to decarbonise BC? (The Climate Examiner)

Risk of failure vs. progression of costs of developing a geothermal power plant (Adapted from: M. Gehringer, V. Loksha. Geothermal Handbook: planning and financing power generation. Energy Sector Management Assistance Program: Technical Report 002/12. The International Bank for Reconstruction. The World Bank Group. 2012.)

With British Columbia’s soon-to-govern NDP-Green Party coalition poised to send the province’s controversial Site C hydroelectric project to review, many opponents of this hydro expansion are asking why BC cannot develop geothermal energy instead.

This week, the PICS flagship 2060 Project: Integrated Energy Pathways for British Columbia and Canada issued a briefing note seeking to answer that question.

The key challenge is uncertainty. We have a good idea of where hot aquifers might be located, but we aren’t sure. The 11 potential sites are described as ‘P50’, terminology that means that there is a 50/50 chance that the installed capacity will be less (or greater) than projected. So geothermal developers have to drill exploration wells, at a cost of $1 million a pop on average, and then confirmation wells, which cost $4-6 million. This means that as much as half of the cost of development is incurred before anyone knows what the true value of the resource at a particular site will be.

This sort of uncertainty makes investors nervous. Those regions that have extensively developed geothermal such as Iceland overcome this obstacle by reimbursing a proportion of drilling costs or boosting electricity sales revenue via tax credits.

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