00:00In the quest to feed AI data centers, the U.S. is looking to get more power from just about
00:05everywhere it can,
00:06from fossil fuels to wind and solar to nuclear.
00:09But it turns out that an important part of the puzzle lies beneath our feet.
00:13Our colleague Michael McKee takes us into the promising and developing world of geothermal energy.
00:21This is not a goldmine, but in an age of power-hungry data centers desperate for energy, it might be
00:28even better.
00:30So what are we looking at here?
00:32The Ormat geothermal power plant in steamboat, where we have to generate electricity.
00:40How much electricity do you produce here?
00:43In the entire steamboat area, we've produced between 80 to 90 megawatts.
00:48That's enough to power more than 50,000 homes, a small city.
00:53Ormat Technologies is one of America's largest geothermal companies,
00:57with plants throughout the southwest, the hotbed of the country's geothermal activity.
01:02These are the heat exchangers.
01:04Daron Blachar is the company's chief executive.
01:07We operate 24-7 every day, regardless of the sun, regardless of the wind.
01:12And that's the main benefit that you get from geothermal.
01:16A steady, 24-7 electricity.
01:20Led by the hyperscaling of AI installations, electricity demand in the U.S. is projected
01:25to grow by as much as 20% over the next decade.
01:29Analysts say that means the country needs an all-of-the-above approach to power generation.
01:35And on the list of potential sources, geothermal stands out for being a clean source of constant
01:41or baseload power.
01:43We need baseload power.
01:45And that's the sweet spot that geothermal brings us.
01:49You don't have to worry about it if the sun's not shining, if the wind's not blowing.
01:53It allows that baseload that every grid needs to operate.
01:58So far, geothermal is just a small piece of the U.S. power generation mix, producing less
02:04than 1% of total utility-scale electricity.
02:08But demand and technology are changing the outlook.
02:12Geothermal energy is the heat of the earth.
02:16And it's been used for millennia.
02:18Hot spring systems were used by the cavemen to cook their food.
02:24Until now, the industry has largely been confined to the rare places where hot water and permeable
02:30rock come together in underground reservoirs, like this site outside of Reno, Nevada.
02:36Now, enhanced geothermal systems, or EGS, have the potential to give nature an assist.
02:42Much of the work has been pioneered at Utah Forge, a Department of Energy-funded field lab.
02:48Joseph Moore is its principal investigator emeritus.
02:51The conventional geothermal systems, these are also called hydrothermal systems or hot spring systems,
02:59have the natural fractures that allow water to move through the rock, extract heat, and then come to the surface.
03:07Enhanced geothermal systems are not associated with hot springs.
03:12These are areas where fractures don't extend to the surface and are not abundant enough to allow water to circulate
03:24in the subsurface.
03:25We have to make the fractures in order for the water to move through them.
03:30And this can be done almost anywhere in the world if we drill deep enough to reach the temperatures that
03:37we need.
03:38Typically, these temperatures are in the order of 400 degrees F and higher.
03:46To do that, EGS companies are turning to the oil and gas industry, which increased production by inventing the technique
03:54of fracking.
03:55The fracking actually creates that permeability that you need to flow the water through the rock in order to harvest
04:02the heat.
04:03Cindy Taff is the CEO of Sage Geosystems, a next-gen geothermal and energy storage company.
04:10After spending 35 years at Shell, she is now using her knowledge of oil drilling to partner with ORMAT.
04:17We're going to be drilling adjacent to their conventional geothermal field and then putting our production, which will be hot
04:25water, into an existing power plant.
04:27And the reason why we're excited about that is it expedites our ability to have a commercial project by at
04:34least a year and a half, because we don't have to acquire land.
04:37We don't have to build a power plant.
04:39We don't have to have a grid interconnection.
04:41We're going to be drilling the wells later this year, if not early next year, depending on the permitting timeline.
04:48And we're going to be flipping the switch in 2027.
04:52And so this partnership is really going to open up the ability to scale commercially around the world because of
04:59ORMAT's footprint.
05:00If Sage can provide the hot water, ORMAT will use it to generate power.
05:05We signed with them a collaboration agreement, basically allowing us, once they are successful, to use their technology and build
05:14a power plant.
05:15Joining forces with Sage, having them bring the experience and knowledge from the oil and gas industry, combining with the
05:22geothermal that we bring, we do believe that we get a winning power plant.
05:26As the technology begins to prove itself, other private capital is moving in behind it, with next-generation geothermal attracting
05:34more than $1.5 billion since 2021.
05:38A company called Fervo now has their drill site located very closely to the forge site.
05:44They're drafting off of that new technology.
05:47It's gotten better and faster and cheaper already.
05:50And so that's how these things are working together.
05:53Now, Fervo has a 400-megawatt plant that they're building right now, which is incredible.
06:00The investments are there.
06:01And so it's going to take less subsidies because these companies don't need the subsidies.
06:08They just need the power, and they need it really quickly.
06:10In Utah, Governor Spencer Cox wants to make his state an energy and business hub, with geothermal an important part
06:17of that plan.
06:18We understand the demand for energy right now.
06:21It's why in Utah I launched something called Operation Gigawatt about two years ago.
06:25We know we have to double Utah's energy production over the next few years in order to compete with the
06:31rest of the world
06:32and to make sure that our citizens have the technological advancements that are happening out there and that they have
06:38low cost.
06:39It helps Utah and Nevada that much of the land where EGS geothermal can be developed belongs to the U
06:46.S. government.
06:46And the Bureau of Land Management is making more of that land available.
06:51Demand is running ahead of supply.
06:53Average leasing prices paid surged almost 300 percent last year.
06:58That's one of the things that we're finding out.
07:00Look, there are a lot of states who give giant subsidies away to attract businesses.
07:04We're not like that in the state of Utah.
07:05We do have some subsidies like every state, but we understand that what people really need is speed
07:11and they need assurances that we're not going to pull the rug out from under them,
07:16that we're not changing our regulatory scheme every few months,
07:20that it's a place where it's easy to do business and deploy capital.
07:25Geothermal is also politically palatable.
07:27At the same time that Washington is opening up more land for geothermal development and continuing tax credits supporting it,
07:35it's pulling back support for wind and solar.
07:38It's one of those rare forms of energy where there's no opposition at all.
07:43The far right is opposed to wind and some solar.
07:48The left is opposed to coal and some nuclear.
07:52Finally, we have this energy source that everybody believes in, that everybody loves.
07:57We just didn't have a way to produce it at scale in enough places.
08:01And because of human ingenuity, because of this abundance mindset that we're starting to get as America again,
08:08we're getting baseload power at scale, that prices are coming down because the technology is getting easier and cheaper and
08:16faster.
08:16Still, as with any source of power, there are risks that come with geothermal energy.
08:22Most important, concerns over access to water and its use.
08:26T.D. Cowan's sustainability and disruptive technology analyst, Jeff Osborne, covers ORMAT.
08:32Geothermal historically is out in the middle of the desert, typically in vast expanses of land and not the most
08:39accessible for water.
08:41So a big risk for investors to monitor is where's the water going to come from?
08:46And if we need an additional water source, is that available as a backup plan?
08:52And what's the cost of that and what's the political ramifications as it relates to future permitting approvals?
09:00And so as we move into new geographies that maybe are less familiar with geothermal, thinking like a state like
09:07Texas,
09:08that the water availability in West Texas, where some of these data centers are coming in, is certainly going to
09:14be an issue.
09:14And so that's where learning comes in from some of these initial projects that are being done by the likes
09:21of FURVO
09:22and what ORMAT will have with the SAGE and Schlumberger partnerships.
09:24They'll be able to take some of that data and then hopefully convince, A, investors, but B, both local and
09:31state-level politicians
09:32that this is something that should be approved to move forward with.
09:37Typically, things around water and grid interconnection are two of the key punch list items that investors are going to
09:44want to understand.
09:45When does it start producing a profit for investors?
09:48Once it starts, we can start scaling, which actually is very soon after this first commercial pilot.
09:58I would say we can scale in the next two or three years to 400, 500 megawatts.
10:02That's when the returns will really come for investors because as you scale, of course, you can drive costs down
10:10because of the efficiencies during scaling.
10:12We have a term sheet with META for 150 megawatts for one of their data centers.
10:18They're already in need for more power at that data center because some of the solar production has dropped out.
10:25And so we've got an agreement with them.
10:28We're also working with the Department of War, and they're very interested in behind-the-fence power
10:34that's easily defendable.
10:36And because a lot of our equipment is below ground and it doesn't have a big surface footprint,
10:42it will help to solve the supply-demand mismatch that you currently see in the power markets.
10:50Being baseload, there's a huge demand.
10:53Geothermal is just a huge untapped resource.
10:57Next generation systems could be a game changer in the renewable energy industry,
11:02especially if everybody is on board.
11:05Good news is that Democrats support this now.
11:09So this used to be just a partisan issue.
11:11It was just Republicans who cared about this.
11:13Now it's a bipartisan issue.
11:15Members of Congress from both parties are pushing towards this.
11:18This is a technology that is bringing us all back to the table,
11:22bringing us all together, bringing investment at every level.
11:25And I think the future is bright for our country.
11:28Forge셨 말�當初.
11:28Let's go back in the bridge.
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