Fossil fuel prices keep going up while solar keeps going down. And a startup geothermal company reports a major breakthrough
Are we finally using less fossil fuel?
One of the dirtiest little secrets about the clean energy transition is that we keep using more and more fossil fuels. The problem is that even as we add clean generation to the worldwide grid, demand for energy continues to rise. So, 2022 saw more energy demand and more fossil fuel used for electricity generation than 2021. And in 2021 we used more than we did in 2020. And that was even with record amounts of renewable energy generation coming online.
But 2023? Maybe not so much.
A groundbreaking report released by the Rocky Mountain Institute (RMI) in partnership with the Bezos Earth Fund asserts that the rapid growth of renewable energy is causing a dramatic decline in global electricity prices and leading to a decline in the use of fossil fuels. (1) According to the report, the capacities of solar, battery and wind power are surging in markets like China and Europe, resulting in a significant reduction in the demand for gas, oil and coal for electricity generation. This shift is a crucial step towards curbing carbon emissions and mitigating the effects of climate change.
Kingsmill Bond, senior principal at RMI, emphasized that fossil-fuel demand in the electricity system peaked in 2022 and is unlikely to increase again due to the rapid advancement of alternative technologies. This development is not only driven by environmental concerns but also by economics. The plummeting prices of solar and wind power are rendering higher-cost hydrocarbons uncompetitive.
The RMI predicts that by 2030, solar panels and wind turbines will contribute over a third of global electricity, surpassing fossil fuels. And that’s before nuclear and hydro are included.
The growth of clean energy is a worldwide phenomenon. Along with big players like China, Europe and the U.S., regions such as Namibia, Australia, Palestine, Jordan, and Chile have also made significant strides in solar and wind generation. The adoption of renewables is driven by their increasing affordability. BloombergNEF data reveals that the costs of solar and battery technologies have decreased by 80% between 2012 and 2022, while offshore and onshore wind costs have dropped by 73% and 57% respectively.
The RMI further forecasts that the prices of clean energy technologies are expected to halve by 2030, with solar costs potentially falling to as low as $20 per megawatt-hour from the current $40-plus. This reduction in costs, coupled with the ongoing shift of capital away from fossil fuels, will encourage further investment in low-carbon energy sources.
Christiana Figueres, one of the architects of the Paris Agreement, expressed her optimism about the rapid progress being made in the renewable energy sector. She highlighted that the goal of tripling renewables by 2030 is not only feasible, but more probable than ever before due to the exponential trends observed in the industry.
The data leaves little doubt that the exponential growth of renewable energy is causing a decline in global electricity prices. There’s more solar, battery and wind power capacity every day, and that is rapidly making investment in fossil fuels a bad bet. As a result, clean energy is expected to contribute over a third of global electricity by 2030.
Drill, baby, drill.
There’s groundbreaking, and then there’s groundbreaking.
When a company breaks ground on a project, it usually means executives in ties or pant suits with shiny shovels and lots of pictures. When Fervo Energy breaks ground, it does so miles underground in pursuit of clean geothermal energy.
The Houston-based startup drilled 7,700 feet below the Nevada desert, and then horizontally another 3,250 feet. It then sent lots of water down into the well, where it reached 375° Fahrenheit and came rushing back to the surface to drive electricity-generating turbines. The completed month-long well test at Project Red in northern Nevada generated 3.5 megawatts of electricity.
Fervo has already commenced work on a massive 400-megawatt project slated to be operational by 2028. This undertaking could potentially power about 300,000 homes, marking a significant leap in geothermal energy adoption.
The success of Fervo’s commercial pilot heralds a promising future for geothermal energy, transcending theoretical models and paving the way for its untapped potential. According to Jesse Jenkins, an energy systems engineer and professor at Princeton, this achievement marks a crucial step toward unlocking the full capabilities of geothermal power.
With only 0.4% of electricity currently supplied by geothermal energy in the United States, Fervo’s advancements could bring about a transformative shift in the energy landscape, harnessing the Earth’s natural heat to power our homes and industries sustainably. As Tim Latimer, the CEO of Fervo Energy, proudly asserts, their approach offers a pathway to a cleaner, greener future.
This project is part of a collaboration between Fervo Energy and Google’s parent company, Alphabet Inc., to develop enhanced geothermal systems (EGS). It’ll eventually provide power to Google’s data centers and infrastructure in Nevada. EGS expands the range of viable geothermal energy sites, a long-standing goal in the renewable energy industry.
Unlike traditional geothermal resources that rely on tectonic plate boundaries and magma proximity to the surface, Fervo has adopted a revolutionary approach. They utilize drilling technology developed by the oil and gas industry, employing hydraulic fracturing to create reservoirs deep underground. This innovative strategy allows them to produce continuous, carbon-free energy resources in various locations worldwide.
Geothermal power plants are crucial for achieving a carbon-free electric grid as they operate continuously and emit no carbon. Since the 1970s, scientists have been working on EGS, but Fervo Energy is the first company to demonstrate its commercial viability on this scale. Fervo’s CEO and co-founder, Tim Latimer, emphasized the significance of this achievement, stating that the technology is not a future resource but a present one, years ahead of expectations.
Following the successful demonstration, Fervo Energy aims to replicate its results at a site in southwest Utah, which is currently under construction. If all goes according to plan, the Utah site is projected to generate around 400 megawatts of electricity by 2028, enough to power approximately 300,000 homes simultaneously. Fervo Energy is also beginning the permitting and appraisal processes for six additional sites across the western United States.
Geothermal energy can play a crucial role in a decarbonized grid by providing power during periods when other renewable sources such as wind and solar are unavailable. As states like California aim to transition to a 100% carbon-free electricity supply, ensuring grid reliability becomes even more critical.
By expanding the range of viable geothermal sites and addressing challenges associated with firm power and long-duration energy storage, EGS has the potential to become an indispensable tool in achieving a sustainable and carbon-free energy future.
The Weekly Sunsong
Ella Fitzgerald knew that enhanced geothermal systems were going to be part of our energy solution years ago: