A detailed report from the Daily Oil Bulletin highlights how Eavor's cost estimates could surpass the growth projections made by major energy forecasters. While institutions such as the International Energy Agency (IEA), Shell, and Wood Mackenzie predict moderate growth in geothermal capacity, Eavor's technological innovations suggest that the sector could experience more significant expansion than previously anticipated.
Conventional geothermal energy is limited to regions with high thermal gradients and requires permeable reservoirs, leading to higher costs and restricted scalability. The article states that the global levelized cost of electricity (LCOE) for geothermal currently ranges between $56 and $93 per megawatt-hour (MWh), comparable to nuclear but less competitive than solar and wind. However, next-generation technologies are anticipated to lower this cost significantly. Advanced geothermal systems (AGS), such as Eavor's, do this by extracting energy from low-permeability rock and average thermal gradients.
Eavor's project in Geretsreid, Germany, is targeting 60 MW of thermal heat and 8.2 MW of power, this closed-loop system eliminates the need for fracking or permeable reservoirs. According to Robert Winsloe, Eavor's executive vice-president of origination, the company expects its AGS technology to achieve an LCOE of $75/MWh by 2029-2030, far earlier than Wood Mackenzie's 2050 projection. He emphasized that the success of Eavor's prototype in Rocky Mountain House, AB, and its demonstration project in New Mexico was crucial to proving the technology's potential to achieve this cost target.
"Eavor proved technologies there that will now be used in commercial projects around the world, including Geretsreid," Winsloe said, citing innovations like insulated drill pipes and shock-cooling technology that enhance drilling efficiency.
Eavor has several upcoming projects in its pipeline, each anticipated to contribute valuable insights that will help demonstrate the company's anticipated downward learning and cost curve.
