What you need to know about geothermal energy

What is Geothermal Energy?

As the world takes measures to move towards lower carbon energy production, many forms of renewable energy technology have been developed. Geothermal energy is heat (thermal energy) that is generated and stored within the core of planet Earth. It is generated from the difference in temperature between the inner core and the surface of the Earth.

When compared to other formed of renewable energy production geothermal is considered one of the most promising forms of production. To harness geothermal power involves drilling up to five kilometres below the Earth’s surface and pumping water into the Earth’s core where it is naturally heated before returning to the surface where the heat energy can be used through transfer to generate electricity and/or heat.

Mitigating Geothermal Development Risks

Whilst the concept is simple, construction of the required infrastructure requires significant development cost both in terms of drilling works and uncertainty over the volume of water that can be efficiently pumped and what temperature increase it will achieve. This often constitutes a major barrier to investment for the sector. For a project to have good chances of success a thorough sub-ground analysis is required, which can cost up to several million dollars. Only once this analysis is completed can actual success of a project be estimated. Should the sub-ground analysis work only identify a thermal capacity which is not sufficient to allow economic operation of a geothermal power plant, all investment made in the analysis work will be lost.

Historically there has been no ability to insure risks inherent wit development of geothermal power; however Marsh in Germany has now developed a service that can assess project specific risks before the commencement of any drilling works and significant capital expenditure being incurred. The team is working to expand availability of the geothermal power risk assessment so the service can be made available for all Geothermal Power plants globally.