BP and Chevron made a major expansion in geothermal energy on Tuesday, relying on a new technology that could prove to be the world’s first clean scalable energy, derived from a constant source: the earth’s natural heat,
The two major oil companies mentioned a $ 40 million round of financing in a Canadian geothermal energy company called Eavor. Based in Calgary, Eavor has pioneered a new form of technology that could be implemented in many places around the world.
The investment marks a key move to an area otherwise ignored by energy companies, which have largely looked at wind and solar projects in their efforts to diversify away from fossil fields.
It 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 for further research and development to help expand the energy system to be competitively priced.
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“We see that Eavor’s potential is complementary to our growing wind and solar portfolios,” said Felipe Arbelaez, BP’s senior vice president for zero carbon energy. “Technologies like Eavor have the potential to provide geothermal energy and heat and help unlock a low-carbon future.”
Eavor has developed a new type of geothermal technology that, in very simple terms, creates an underground “radiator”.
The Eavor ‘loop’ consists of a closed loop network of pipes normally installed 3 kilometers to 4 kilometers below the earth’s surface, which originate and terminate in the same above-ground installation. The pipes are installed using advanced drilling techniques perfected in the oil area.
The liquid moves in the pipes from the above-ground installation through the hot underground environment, before circulating naturally at the top of the loop. The hot liquid is then converted into electricity or transferred to a district heating network.
A major advantage of this type of energy is that it is constant, providing a basic charge of electricity to a grid system without requiring provocative solutions of intermittent wind and solar energy batteries.
Images from a virtual tour of Eavor’s large-scale prototype.
Photo courtesy of Eavor.
Unlike hydroelectricity, which relies on large sources of constant water flow, it is designed to be scaled, and Eavor provides installations installed under solar panel fields and in space-constrained regions such as Singapore.
Geothermal energy has existed for decades, enjoying a boom period in the 1970s and 1980s, before it largely fell from the spotlight in the 1990s. time an attractive proposal for oil and gas companies, which have basic expertise in underground exploration and drilling.
The problem is that conventional geothermal technology is based on finding super hot underground water sources, making them expensive, risky and rare bets. More recent advances are rooted in the shale oil boom and use fracking techniques to actually create the underground reservoirs needed to generate energy. But this can pose a problem in terms of the environment and sustainability.
The Eavor solution does not require the exploratory risk of traditional geothermal energy or disturb the earth as fracking geothermal does.
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John Redfern, President and CEO of Eavor, told MarketWatch that the predictability of the system, established in field tests in partnership with Royal Dutch Shell RDSA,
it is repeatable and scalable, making it the same as 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 even build the system, unlike a traditional oil or geothermal well, we already know what the results may be. Once it’s up and running, it’s very predictable, “Redfern said. “Therefore, you can finance these things exactly like wind and solar, with a lot of debt at very low interest rates.”