According to the U.S. Energy Information Administration (EIA), the first large-scale commercial enhanced geothermal system (EGS) power plant in the United States is currently under construction and scheduled to begin operating in June 2026.

Geothermal power plants generate electricity by tapping underground heat from reservoirs of hot water or steam. These resources typically occur in geologically active regions near tectonic plate boundaries or volcanic areas, which is why most conventional geothermal generation in the United States is located in western states such as California and Nevada.

The United States currently has about 2.7 gigawatts (GW) of geothermal generating capacity, accounting for roughly 0.2 per cent of total U.S. summer electricity capacity, according to the EIA.

Enhanced geothermal systems aim to expand that potential by creating artificial reservoirs deep underground where naturally occurring geothermal resources do not exist.

Unlike conventional geothermal plants that rely on naturally permeable rock formations, EGS uses advanced drilling techniques—including horizontal drilling and hydraulic fracturing—similar to technologies developed for oil and natural gas production. These techniques allow engineers to create underground reservoirs where water can circulate through hot rock, producing steam that drives electricity-generating turbines.

Because EGS can theoretically be deployed in many more locations, it could significantly expand geothermal energy production.

The U.S. Geological Survey estimates that 135 GW of potential geothermal electricity generation could be available from EGS in the Great Basin region alone. Other studies suggest that up to 150 GW of cost-effective geothermal capacity could eventually be developed across the United States, depending on technological progress and electricity market conditions.

A 2023 study by the National Laboratory of the Rockies estimated that 90 GW of EGS capacity could be economically built in the United States by 2050.

Several projects are already moving forward. Fervo Energy’s Cape Generating Station in Utah will be the first large-scale commercial EGS power plant in the country. The facility is expected to have 28 megawatts (MW) of net summer generating capacity, with a maximum capacity of 53 MW.

Two additional EGS units of the same size are expected to begin operating at the site in early 2027, and the company has signed power purchase agreements with Southern California Edison for up to 320 MW of electricity as it expands the project.

Other developers are also testing advanced geothermal technologies. Rodatherm Energy Corp. is piloting a closed-loop geothermal system designed for hot sedimentary rock formations common in the western United States and along the Gulf Coast.

Large electricity users are beginning to support geothermal development as well. Technology company Meta recently signed an agreement with geothermal developer SAGE to supply up to 150 MW of geothermal electricity to help power its data centre operations.

Despite the promise of EGS, several challenges remain. Geothermal projects require expensive deep drilling and careful management of underground reservoirs. Developers must also mitigate the risk of induced seismicity, or small human-caused earthquakes that can occur during reservoir creation.

Governments and industry groups are investing in research to reduce those risks and lower drilling costs. One major research initiative is the Utah Frontier Observatory for Research in Geothermal Energy (FORGE), a U.S. Department of Energy field laboratory where scientists and engineers are testing techniques for creating and managing enhanced geothermal reservoirs.

Canada is also playing a role in advancing next-generation geothermal technology.

Calgary-based Eavor Technologies is developing a closed-loop geothermal system that circulates fluid through underground wells without requiring naturally occurring reservoirs or hydraulic fracturing. The technology creates a sealed underground heat exchanger designed to deliver constant geothermal energy.

The company recently completed a major project in Geretsried, Germany, where it is building what it describes as the world’s first commercial-scale closed-loop geothermal power plant. The facility is expected to produce both electricity and district heating using Eavor’s advanced geothermal system.

Advances such as enhanced geothermal systems and closed-loop technologies could significantly expand the role of geothermal energy in global electricity markets.

Because geothermal plants produce continuous electricity and are not dependent on weather conditions like wind or solar power, some analysts say advanced geothermal technologies could become an important source of reliable, carbon-free power as countries expand clean energy systems.

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The oil sands major says the agreement will help it advance two of its environmental, social & governance focus areas by supporting Indigenous reconciliation through this economic engagement and addressing climate and greenhouse gas emissions.

“Through this agreement we’re reinforcing our commitment to using multiple levers and innovative approaches to help us in our long-term ambition of achieving net zero emissions by 2050,” said Alex Pourbaix, Cenovus President & Chief Executive Officer. “This is also an excellent opportunity to further build on our long-standing relationship with Cold Lake First Nations in its partnership with Elemental.”

According to Cenovus, the project is expected to be completed by 2023 and will add 150 megawatts of renewable energy to the Alberta electricity grid.

Cenovus has signed a 15-year PPA for the full output of the facility, providing the offtake contract necessary for the construction of the project.  The company says this will help Cenovus mitigate its scope 2 emissions which are those represented by purchased or acquired electricity, steam, heat and/or cooling. Cenovus says these emissions primarily result from purchased electricity.

CLFN is part of the Denesųłiné Nation.  It has 3,000 members and reserve lands around Cold Lake and Primrose Lake near some of Cenovus’s oil sands projects in northern Alberta and has been a long-time supplier of services at Cenovus’s projects.

“As stewards of the land, our Nation fully supports sustainable renewable energy development respecting environmental, economic, cultural and social contexts, while realizing long-term economic benefits through an ownership stake in the project,” said Cold Lake First Nations Chief Roger Marten. “The project exemplifies the relationships we’ve built with our partners and creates an innovative path for economic reconciliation.”

Vancouver-based Elemental Energy is a privately held developer, investor and operator of renewable energy projects, including two existing solar facilities in Alberta.

“This project represents a milestone for Elemental by building on our track record of Indigenous partnerships and working with corporations to build large scale projects that advance Canada’s renewable energy economy,” said Jamie Houssian, Principal, Elemental Energy. “We are excited to demonstrate the power of collaboration with Cenovus, Cold Lake First Nations, and Elemental coming together to create a project that unites both purpose and profit.”

In addition to climate & GHG emissions and Indigenous reconciliation, Cenovus has also identified water stewardship, biodiversity and inclusion & diversity as its other significant ESG focus areas.

The company says it will release its 2020 ESG report in the fourth quarter of 2021, which will include new ESG targets for each focus area, as well as pro forma metrics for the combined company to reflect Cenovus’s acquisition of Husky Energy on January 1, 2021.

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Mandatory funding for renewable energy down 46 per cent in 2018 Farm Bill

By Steve Hanson

This article was published by the US Energy Information Administration on Feb. 1, 2019.

On December 20, 2018, the Agricultural Improvement Act of 2018 (2018 Farm Bill) was signed into law, continuing federal support to a number of renewable electricity and bioenergy-related programs.

Authorizations in the 2018 Farm Bill cover fiscal years (FY) 2019 through 2023, during which time energy programs will receive $375 million in mandatory funding, with up to an additional $860 million in discretionary funding.

These spending levels represent a 46 per cent decrease in mandatory funding and a 12 per cent increase in discretionary funding compared with the 2014 Farm Bill. Even though discretionary spending increased, discretionary federal support is inherently uncertain because this funding must be authorized by Congress in future appropriations bills.

Farm bills have tended to be large, multi-year pieces of legislation that outline federal support to a diverse set of rural and agricultural programs administered by the U.S. Department of Agriculture (USDA).

The 2002 version of the farm bill was the first to include a dedicated energy title, Title IX. Subsequent farm bills in 2008 and 2014 either created, extended, or repealed these programs. The 2018 Farm Bill reauthorized most Title IX programs at the same or lower funding levels relative to the 2014 Farm Bill.

Title IX federal subsidies are provided to eligible recipients in the form of project grants, guaranteed loans, and direct payments. The most common form of assistance is a USDA-guaranteed loan, where the USDA assumes the responsibility for the amount of the loan in case of default.

The share of USDA-guaranteed loans under Title IX programs more than doubled during the past four years, from approximately 40 per cent during FY 2009–2013 to more than 80 per cent during FY 2014–2018.

Several Title IX programs account for most of the federal support provided, with the largest amount of funding awarded to the Rural Energy for America Program (REAP).

REAP offers grants and loan guarantees to agricultural producers and rural small businesses to promote the installation of select renewable energy systems, particularly solar, and energy efficiency retrofits.

REAP is set to receive $250 million in both mandatory and discretionary funding over the duration of the 2018 Farm Bill, accounting for two-thirds of mandatory funding and nearly one-third of discretionary funding.

The Biorefinery Assistance Program (BAP) and the Biorefinery Program for Advanced Biofuels programs account for much of the rest of Title IX authorizations, or approximately 30 per cent of mandatory and 55 per cent of discretionary funding.

Through BAP, USDA provides loan guarantees up to 80 per cent of total eligible project costs up to $250 million for the construction of advanced biofuel facilities and other qualifying technologies.

The Bioenergy Program for Advanced Biofuels provides cash payments to biorefineries to encourage the production of advanced biofuel. Mandatory funding for both programs was reduced in the 2018 Farm Bill.

Other Title IX programs generally receive smaller levels of government support or are more dependent on discretionary spending. These programs involve the growth of biomass energy crops, biodiesel education, bio-based product labeling, and other energy-related issues.

Overall, spending on Title IX programs will represent a small fraction of the overall farm bill, which was valued at $428 billion during FY 2019–2023 by the Congressional Budget Office.

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