Oil service sector in Canada backs emergence of geothermal developers
At the end of April, The Canadian Association of Oilwell Drilling Contractors (CAODC), Clean Energy Canada and the Petroleum Services Association of Canada (PSAC) joined together to establish an alliance with the existing geothermal industry participants to promote Canadian geothermal development and to create jobs for displaced oil and gas drilling contractors and oilfield service workers.
Under such an initiative, Eavor believes Alberta could attract up to $4 billion in private and foreign investment capital, to create 400MWe of clean dispatchable power and eliminate 2,000,000 tons of CO2 emissions per year, all the while eventually employing 5,000+ displaced oil service workers. Such a plan could kickstart a geothermal ecosystem in Canada that could lead the world and represent a clean sunrise export industry for the nation.
"Having a diverse and growing stable of active geothermal developers in Canada is absolutely essential if we are going to generate a meaningful amount of geothermal related work for our drilling and oil service company members," said Kevin Krausert, CAODC Drilling Rig Executive Chair.
"Geothermal power development projects are an ideal opportunity to reactivate unemployed oilfield workers and utilize the idle oil and gas drilling infrastructure in Western Canada. Stimulating the geothermal investments with PPA's guaranteeing reasonable prices will have to bring significant opportunities to the labour-intensive drilling services sector," said Kevin Neveu, president and CEO of Precision Drilling.To rapidly scale a Canadian geothermal industry, however, will require an incentive plan that can attract new developers and participants to the market. Such an incentive plan will need to include Power Purchase Agreements (PPA's) or their equivalent to provide guaranteed offtake at a reasonable price for the value delivered (no different than for any new power generating asset). The advantage of such incentives are that they are technology agnostic and let the market decide which technologies and developers are involved.
"A PPA will attract long-term sustainable investment into Alberta and put the province on the map as a geothermal leader. We have seen it work in the US where States have used targeted PPAs to rapidly grow nascent energy industries like the biogas and energy storage sector. As a
developer, it keeps us in the province because we move where the industry moves," said Janice Tran, CEO of Kanin Energy.
"Eavor has facilitated the early entry of multiple developers by reducing the time, risk and cost of the exploratory stage of traditional geothermal projects," related Eavor president and CEO John Redfern.This is just the start as once a stable geothermal business environment is in place, more (and larger) market participants are also expected to join this emerging industry. Some of these developers are already in discussions but are as of yet unwilling to show their hand without clarifications from the government first. The important thing is that a lot of developers means a lot of work for service companies and a rapid ramp-up of clean dispatchable power.
Eavor (pronounced "Ever") is a technology-based Energy company led by a team dedicated to creating a clean, reliable and affordable energy future on a global scale. Eavor's solution (Eavor-Loop) represents the world's first truly scalable form of green dispatchable power.