Geothermal

Geothermal energy is fast emerging as the “sleeping giant” of renewable energy.  Through both a political push on and monetary allocation, this green energy solution is expected to cause political and social stars to align. Regardless of the current global financial situation, governments are pushing stimulus packages aimed at initiatives such as national renewable portfolio standards and carbon credits.

Geothermal energy is energy which is extracted from the Earth’s own internal heat. The heat stored in the Earth’s crust is generally available at depths of 3 kilometers. At this depth you find heat-producing granite trapped by overlying rocks that act as an insulating blanket. This heat is then extracted using circulating water through these granite layers which then passes on through an engineered, artificial reservoir and converted to electricity.

We have all seen that greenhouse gases, including carbon dioxide and the resulting global warming, have captured headlines worldwide and caused international concern over the last decade. There is an increasing demand for energy to maintain and expand economic prosperity on one hand, but on the other there is general agreement that global warming and pollution have the potential to destroy the global environment in which we all live.

Electricity demand continues to expand worldwide with consumption projected to grow by nearly 100% by 2020 (International Energy Outlook 2001). Electricity generation generally relies on burning fossil fuel which produces carbon dioxide (CO2) as one of its waste products. The challenge which faces energy producers is to meet the ever increasing demand for energy, yet decrease the world’s reliance on (the still ubiquitous) fossil fuels. It is a fight which Icon is keen to take up and we see geothermal as a key weapon in the arsenal.

At present geothermal energy occupies only a small part of the overall energy grid, which is mainly attributable to the education of political leadership and investors. There should be a recognition that this is an excellent resource which can provide green energy for generations to come. We expect to see the geothermal market continue to grow at least in line with the overall market rate for green energies.

Some have highlighted concerns in relation to the cost of initial drilling and building of geothermal plants. Nonetheless, Icon sees a real opportunity for energy companies who don’t already have geothermal production. Geothermal relies on existing technologies and engineering processes such as drilling and
hydraulic fracturing techniques proven and used by the oil and gas industry.

It is a common misconception that some people have in relation to geothermal energy that it is a more expensive form of energy, but really it is just more expensive up front. When you look at it from the perspective of the life of a plant, the operating costs are low and there is no oil price volatility risk. This makes it relatively cost competitive when compared to a lot of other energy sources. With government stimulus packages, some developers can also begin projects by taking advantage of cash grants up front in lieu of tax credits.

A major bank in the U.S recently looked at the balanced cost of numerous energy sources. It purported that with the existing incentive schemes, US production tax credits and no carbon taxes, the lowest cost of all energy sources was in fact geothermal, even when aligned against both coal and gas. By adding in a carbon penalty, geothermal will look even more appealing.

Icon’s core business is currently in clean burning coal bed methane gas, which if you are reading this, you are probably aware. But what you may not know is that we are actively looking forward at real sources of green energy for the future. Not just to asses in theory, but to move forward with in practice. We believe that in the not too distant future geothermal energy will play significant role in global green energy initiatives. And at Icon, we plan to be right there at the forefront.

Icon Energy’s business activities are currently focused on developing Coal Seam Gas and Geothermal resources. To read more information about these activities, please click on the links on the left of this page.