VIEW ON RENEWABLES
With the international geo- thermal energy industry experiencing near record
growth in 2014, it is curious that not a
single megawatt of geothermal power is
being produced in Canada.
In fact, Canada is nearly the only developed country on the Pacific Rim not producing geothermal power. This is despite
British Columbia possessing world-class
resources that have been identified by
CanGEA’s Internationally Peer Reviewed
Geothermal Favourability Maps and Resource
Estimates. Indeed, this viability should
not come as a surprise since Western
Canada is dotted with over 150 known
hot springs, which are surface manifestations of geothermal activity.
While the more conventional resources located in BC represent a missed opportunity for clean base load geothermal power generation, so too do Hot
Sedimentary Aquifers (HSA). HSA occur
across Canada with the largest stemming
from BC and extending east to Manitoba.
As Canada neglects these resources,
countries such as Germany have aggressively tapped into HSA resources. In addition to power, Germany uses geothermal energy as a source of heat for various
commercial, industrial and residential
uses, including district and greenhouse
A geothermal project in the town of
Kirchwerdach recently began drawing
90°C water from an HSA 3. 5 km underground. Heat from the well is used in a
greenhouse, which just produced its first
harvest: 3,300 tonnes of tomatoes and
1,100 tonnes of peppers. This also produced 100 jobs, and the project will also
provide heat and power to the town.
Alberta could learn something from
Germany, as close to 90 percent of Al-
berta’s power generation comes from the
combustion of fossil fuels.
This reliance contributes to Alberta’s
distinction as the largest source of GHG
emissions in Canada. Aside from an estimated $300 million in annual healthcare
costs from the burning of coal calculated
by the Pembina Institute, there are also
political costs that result from this.
This raises questions as to why Canada
is so woefully behind in terms of utilizing
its geothermal resources. First, it is hard
to develop geothermal projects without
a geothermal permitting scheme. Aside
from BC, no jurisdiction in Canada has
a formal system for acquiring geothermal
leases. As anyone in business knows, investors seek certainty. Having a legally
recognized title to one’s resource is indispensible in attracting investment.
As mentioned, BC is the only province
in Canada with a geothermal permitting
system, the Geothermal Resources Act
(GRA). However, developers have found
the GRA to be poorly crafted, and even
more ineffective in the manner that it is
Instead of simplifying and providing
certainty to geothermal developers, the
GRA has actually been found to do the
opposite. Rather than introduce a sin-gle-window regulator, the GRA actually
creates a whole new level of “red-tape,”
while failing to replace existing hurdles.
For instance, in order to drill, a geothermal developer must seek approval from
traditional oil and gas drilling regulators
in addition to GRA regulators. For many
small- to medium-sized enterprises, this
results in delays, which consumes valuable time and operating capital.
However permitting is not the only
roadblock for geothermal developers.
Geothermal projects have an extremely
front-end loaded risk profile, highlighted
by the fact that drilling alone can com-
prise up to 30 percent of a geothermal
project’s overall cost. This makes capital
at the early stages of geothermal energy
Many provinces have crafted standing
offer or feed-in tariff type programs that
have been molded to the needs of renewable energy projects such as wind and
solar. While suitable to these technologies, geothermal energy projects would
benefit more from support mechanisms
that help them get over the early stages
of project development. Therefore, much
more useful would be assistance granted
upfront in the form of a Net Present Value
grant that aides in overcoming drilling
and exploration costs.
Governments have also failed to value the benefit of baseload geothermal
power to the grid, which is more akin
to nuclear and natural gas power plants
in terms of reliability. As more intermittent sources of energy such as solar and
wind are installed, grids risk becoming
unstable especially in terms of serving
peak demand. This is a problem that has
been experienced in both Germany and
California. California has addressed the
benefit of base load renewable power by
mandating that utilities add the cost of
integrating intermittent forms of energy
when awarding power purchase agreements.
Despite all this, there is a silver lining.
Given Canada’s excellent resources, with
a little determination on the part of the
government, the country can easily become a world leader in clean and reliable
Lots of Potential,
Still No Geothermal
BY JUSTIN CREWSON, POLICY ADVISOR, CANADIAN GEOTHERMAL ENERGY ASSOCIATION