Is Canada Warming up to Geothermal Heat Power?

November 27, 2018 Andreas Källroos

There is so much potential to capitalise on heat power globally, yet so few incentives to do so. Canada is a perfect example of this contradiction: a country with enough heat resources to provide more than enough power to its citizens, yet very little heat power to be found. But I have a feeling the situation is about to change. Here’s why.

The untapped heat power potential of existing geothermal wells

As the authors of this 2017 report by the Pembina Institute pointed out, Alberta is “estimated to have as much as 389 gigawatts (GW) of geothermal heat power capacity - 24 times the province’s current electricity generation capacity.” This is mainly because of Alberta’s history in oil and gas, which has set the stage for ideal conditions to generate heat power. 

For starters, Alberta has the expertise in the form of oil and gas workers who can segue their skills and knowledge into the geothermal heat power industry. They have a natural advantage in that they are already applying the technologies required to locate sub-surface data, along with experience in handling large volumes of water in the form of co-produced fluids from the oil wells.

But perhaps the most obvious untapped geothermal heat power resource is the wells: close to 600,000 in Alberta alone. According to the Pembina report, CanGEA estimates that 60,935 of them may be viable for geothermal heat power production. 

There are also more ways than one to bake a cake. Repurposing inactive wells is one way, but generating power at active wells is another. The oil and gas industry is no stranger to having to deal with massive amounts of hot water as a by-product of oil and gas production in the form of co-produced fluids. 

Since drilling accounts for 30-40% of project costs, harnessing heat from these fluids at active wells would be like getting two sources of energy for the price of one. This rationale is especially relevant where old wells are concerned, since it would extend the lifetime of the well, further capitalizing on the initial investment. What’s more, this additional power source (or revenue stream) could be deployed quickly in the form of small, distributed power plants across oilfields – with no additional drilling required.

Evaluating the price of power

Recently in Saskatchewan, SaskPower became the first power company in Canada to purchase self-generated electricity from heat as part of its climate change strategy, setting a price for electricity generated both from waste heat and geothermal. This is a much-needed incentive for the oil and gas industry to begin producing power that it sells back to the grid. 

However, given the recent increases in electricity costs in Alberta, the industry might not actually need incentives to produce energy for its own purposes. This article from The Daily Oil Bulletin notes that oil and gas companies reported an increase of as much as 230% in power costs in 2018 – making self-generation an economic necessity for those companies who have been dependent on the power pool – and an economic hedge for those who produce enough to sell back to the grid. Currently, their answer is to bring generators or batteries online, but they could be generating power from what would otherwise be waste heat from co-produced fluids. A follow-up article in The Daily Oil Bulletin states that the pioneer oil and gas company Razor Energy is considering doing just that. 

Using heat power for processes like separating crude oil from oilsands is a relatively low-risk way to generate soft power. This is another area where we see potential for our machines, since they can generate power from temperatures as low as 70 degrees C. 

Remote communities stand to gain 

Alberta isn’t the only province that stands to gain from changes in heat power legislation. In British Columbia, the village of Valemount will soon be the first place in Canada to bring geothermal heat power online – in the form of three Climeon units. For remote communities like this, at the end of the grid, geothermal heat could be a renewable energy source not just for electricity, but for district heating, and heat pumps as well. 

Replacing generators with heat power will be a serious cost-savings for communities that must currently truck fuel over land and frozen lakes in winter. It’s also the ideal renewable energy in places with varying amounts of wind or sun, making those renewable technologies erratic and unpredictable – while heat power has the benefit of 100% uptime. 

However, it’s possible that Valemount would not be installing geothermal heat power had it not been for the fact that Borealis GeoPower received a $1.5-million-dollar grant from the Canadian government in order to prove the viability of heat power. 

Hope in the north  

While Canadian authorities must still take a number of policy actions to reduce uncertainty for entrepreneurs and investors, we’re optimistic that these changes are starting to happen. Like the new power purchase agreement from SaskPower, incentives for the oil and gas industry to produce their own power, and grants like the one to Borealis GeoPower. I also just read that Canada’s Standing Committee on Natural Resources announced their recommendation that the federal government create a database of energy information with examples of lesser-known energy topics – like geothermal heat power.

Opportunities and challenges

The heat power potential in Canada is extensive. We believe the coming years are very exciting times and that Canada could take a leading role not only in the domestic market but also internationally. Do you agree? 
-What do you think needs to happen before companies can harness heat power at inactive wells? 
- What hurdles are there to harnessing the heat power at active wells?
- How close do you think Canada is to capitalizing on its pure geothermal resources?
 
If you would like to discuss this in more detail, feel free to contact me directly at: andreas.kallroos@climeon.com

About the Author

Andreas Källroos

Andreas is our Head of Sales for Geothermal & Industry.

His regional focus is on Canada, and he mainly works with Oil & Gas, Geothermal and Steel.

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