Geothermal energy

US Department of Energy Wants To Give Geothermal Pilots $74 Million

New funding aims to launch up to seven pilots to help expand the deployment of enhanced geothermal systems.

Illustration of a power plant using an enhanced geothermal system as a sustainable heat source.
Source: US Department of Energy

The US Department of Energy (DOE) is seeking applications for up to $74 million in funding for pilot projects that can help advance the commercialization of enhanced geothermal systems (EGS).

The DOE announced this month its goal to award the funds over the next 2 years to support as many as seven EGS pilots in different geographic and geologic locations “using a variety of development techniques and well orientations.”

The DOE’s funding notice comes after it announced last year that its latest “earthshot” initiative would use federal dollars from the recently passed infrastructure bill to achieve a 90% reduction in EGS-generated electricity by 2035.

EGS relies on subsurface injections to create fractures that enable a greater exchange of fluids within the hot rocks than would otherwise be considered economic.

While geothermal represents about 3.7 GW of US power today, the DOE believes the potential exists for EGS to produce at least 90 GW in the coming decades which the federal agency said could power over 65 million American homes.

Through its proposed set of pilots, the DOE wants project developers to gain new learnings from trial and error, improved subsurface models, and increased collaboration on operational standards.

The DOE said individual project awards may range in size from $5 million to $25 million and will be issued between the end of this year and 2025. Applications for the initial round of funding are due in June, and the DOE said it expects to make its first round of selections in October.

The DOE has broken the EGS pilot program into the following components:

Topic Area 1 includes those pilots with “immediate potential” for power generation by locating them near existing infrastructure and other geothermal or hydrothermal projects. The goal is to boost output from current sites by at least 5 MW.

Topic Area 2 will focus on low-permeability greenfield areas “with no existing geothermal development” but that have “near-term” potential to generate power.

Topic Area 3 is focused on “super-hot” or supercritical EGS pilots in excess of 700°F (>375°C) that also have a near-term power generation potential.

Topic Area 4 will seek to unlock the geothermal energy potential of the US East Coast but will not be open to applications until the DOE launches a second round of the funding package.

More Room for Upstream Tech?

The hurdles that the DOE is hoping EGS can overcome through more research and development include the high cost of drilling into hot formations and sustaining a high level of conductivity between wells.

But as these challenges threaten to hold back this emerging corner of the geothermal landscape, one growing source of optimism around ESG has come from recent progress made using oil and gas technology and technical know-how.

Examples include the current DOE-backed project at the FORGE field laboratory in Utah. The $220-million EGS test site is successfully leveraging drilling and hydraulic fracturing technologies originally developed for the oil and gas industry.

Another past recipient of DOE funding is Fervo Energy which struck a deal late last year to supply 20 MW of power by 2026 to southern California customers from its EGS site in Utah.

Jack Norbeck, the chief technology officer of Houston-based Fervo, spoke at the recent SPE Hydraulic Fracturing Technology Conference and Exhibition where he related how the energy startup is working on “a reservoir management concept that is very similar to unconventionals.”

The similarities he listed include a reliance on horizontal drilling, multistage hydraulic fracturing, and running diagnostics for reservoir monitoring and characterization.

“Probably the biggest difference is that we actually try to achieve frac hits,” said Norbeck, while explaining that “we drill out sequences of injection wells and production wells, connect them through hydraulic fracture networks, and try to flow across the system.”