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Jason Peart, GM of Strategy and Development at Sage Geosystems, joins the show to outline the many ways geothermal energy is advancing to provide diverse solutions for the world’s booming growth in power demand. Jason walks us through some need-to-know information about the latest trends and technologies related to geothermal energy, including how progress is being made on using geothermal for energy storage. Jason also shares details about a partnership Sage recently formed with Meta to power data centers, as well as the work Sage is doing with the US Army and California Resources Corporation.
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Transcript
(Note: This transcript was edited using artificial intelligence. It has not been edited verbatim.)
Sean McMahon 00:00
What’s up everyone and welcome to the Renewable Energy SmartPod. I’m your host, Sean McMahon, and you know, over the course of the last three and a half years, we’ve done more than 70 episodes of this podcast, but somehow we’ve never done a show that focuses on geothermal energy. But that all changes today. In a few minutes, I’m going to be joined by Jason Peart, the GM of Strategy and Development at Sage Geosystems. Now, if Sage sounds familiar, that’s because they’ve been in the news in recent weeks due to an announcement they made with California Resources Corporation and a data center partnership they’ve struck with Meta. Jason is going to share some of the details about those headlines and walk us through some need to know information about the latest trends and technologies related to geothermal energy, including how geothermal is not only a reliable baseload energy source, but progress has also been made on using geothermal for energy storage. So I’m excited to hear more about that.
Looking ahead at the calendar, next week, I’m going to be speaking with Wade Gungoll and Christine Larson. Wade is the CEO at Industrial Sun, and Christine is the Head of Strategy and Operations at Modern Energy they’re going to stop by to talk about how renewables are being used to power heavy industrial operations. I’m talking about manufacturing and processing plants, data centers, terminals and refineries. I don’t know about you, but when I think of facilities that are being powered by renewables, refineries aren’t exactly the first thing that comes to mind, but it’s happening, and Wade and Christine are going to share all of the details.
So I’m looking forward to that conversation, but right now, let’s get things started with Jason Peart from Sage Geosystems. Jason, how you doing today?
Jason Peart 01:59
I’m doing pretty well. Thanks for asking.
Sean McMahon 02:01
I’m excited to have you on we just wrapped up climate week, and I understand you were in New York for that. So what were some of your highlights or the key takeaways from that week?
Jason Peart 02:09
Perfect timing for this podcast, as you said, one week after climate week, I never actually been to climate week. Knew very little about climate week. Honestly, it was a great experience. It was energetic. Lots of excitement around what the future energy mix is, and going into it, I didn’t really know what to expect. I was envisioning some big convention center with booze and different meetings, and it was very exciting to see. Just it takes over part of the city, right? And there’s events every night. There’s events during the day, so many people getting involved in it. So I was really glad to be able to be there. Say the highlight of the week was definitely Tuesday at Project interspaces, geothermal house. Very interesting space. They they did a great job setting up that location and really building excitement for geothermal. Sage had a booth, along with several other geothermal companies and technology companies. Lots of great panels from leaders in the geothermal space, from investors to talk about, how do we improve investability of geothermal, from groups talking about regulations and supply chains. So it was great to be there lots of traffic in the booth space with Sage and with several others. And so that interest the public coming in, reporters coming in, investors coming in. There was a great opportunity to really showcase what the future of geothermal can be, and what we’re doing now to enable that.
Sean McMahon 03:43
What was the most common question you got from people who maybe just kind of walked up to the booth?
Jason Peart 03:49
Most common question… Tell us about Sage, and I say that facetiously, but I think it has a lot of merit on the question, because this is a new industry. We are really driving these ideas forward. And so there’s going to be an educational component you mentioned at the beginning. This is the first podcast on geothermal you’ve done. And so I think you know, what is really nice about the work groups like Project interspace are doing is to continue to educate on the potential for geothermal. What we can do? There are a lot of companies working to grow and expand geothermal right now. We’re going about it in different ways, but we all have an objective to increase the role of geothermal in the energy mix, to solve energy challenges and energy security, and that that there’s an educational component to that, because it’s been such a small part of the energy mix for so long. But we really think that the years to come are going to be really fantastic for geothermal, and then you can even extend that into storage. There’s a need for both.
Sean McMahon 04:54
So I might ask you to just kind of explain the basics of geothermal to our audience when we. Spend too much time on this. I’m definitely going to get into some of the other projects you’re involved in and deals you’ve got with, like Metaand the military and the California Resources Corporation. But for now, just give me a couple of minutes on how much energy does a typical geothermal well produce, and how long does it take to construct these things? Just yeah, give me the geothermal 101, if you will.
Jason Peart 05:19
Sure. So geothermal, and geothermal has been around a really long time. The challenge up to this point is it’s been very specific to certain geography. So you had to be near volcanoes, Ring of Fire. Think geysers, California, Iceland and these kind of places where you’re drilling, looking for hot liquid to then produce energy from. What has been a big shift in geothermal in recent years is technology to make geothermal available in much greater geographies, targeting hot, dry rock, leveraging the heat from that rock, filling it with water, and then getting that heated water to surface, to produce electricity from and so with geothermal, you’re typically targeting temperatures 180 to 200 degrees centigrade. The hotter, the better. To your question about, you know, what do you get out of a well, think that that depends on a lot of factors. So a lot of the geothermal energy potential has to do with temperature at surface and down hole temperature. So the hotter the temperature is down hole, the more energy you’re generally going to get out of it, which is why we target that 180 200 degrees C plus range the temperature at surface has really impacts the efficiency of the system. So if you have a cold ambient temperature at surface, that’s great for geothermal. If it’s a hot place like the Middle East, that’s going to impact the potential you get out of that well. And so when we talk about capacities, you know, we start thinking, you know, anywhere from two megawatts in those really hot environments, up to eight, nine megawatts in those colder environments. So that’s just gives you an idea of how much the surface temperature impacts the geothermal potential of a well. The other piece on those numbers is we talk net output. And so it takes so much, it takes a certain amount of energy to run the system, and so we need to be careful when you hear things like gross output, net output is what can get into the grid. So with this hot, dry rock geothermal, we’re trying to make it more accessible beyond your traditional locations. We’re leveraging that oil and gas technology that I mentioned, creating fractures, subsurface, drilling deep wells to access that heat using the supply chain of the oil and gas industry, and just trying to broaden this resource to more places so it can be a really great part of the grid moving forward.
Sean McMahon 07:54
Okay, I want to ask a question about supply chain. So how different is the equipment you use for drilling these geothermal wells to something that’s used for oil and gas. Is there any crossover there? That’s a dumb question, maybe, but I don’t even understand, like the actual technology, what the drills look like.
Jason Peart 08:09
I think this is what makes geothermal attractive. There are a lot of parallels to the oil and gas industry from a few different perspectives. One is competency and talent, the skills to drill wells in oil and gas, the skills to drill well in geothermal, the technology, the innovation of the oil and gas industry, that innovation is going to be needed in geothermal, and the equipment and supply chain base for the subsurface operations is there. You have an industry set up that’s able to support the growth of geothermal. When I talk supply chain, it’s on surface equipment, because a lot of that is specific to geothermal, but it’s taking our innovation from experiences in the oil and gas sector and looking at the equipment and saying, How can we design this better? How can we optimize this? How can we make it quicker to manufacture? How can we make it more compact so it’s easier to manufacture? And these are all different questions we’re going to keep thinking through to really propel this board.
Sean McMahon 09:20
And how long does it take to to dig one of these wells and, you know, get it up and operational? I know it’s probably dependent on size, but just, you know, give me a kind of a typical time range
Jason Peart 09:27
Right. So it depends on a variety of factors. So it can depend on the regulatory environment, the permitting regime. What we see as the biggest driver is the supply chain. So the lead times on some of this equipment can be two years. Part of that traditional geothermal supply chain is it just hasn’t really grown yet with the new geothermal system. So we need to continue building that. We need to continue expanding that. But right now, when we look at the time, that’s one of the biggest factors and drivers is just the. Lead time actual drilling a well. This is very similar to what the oil and gas industry does in drilling these wells, and so you’re talking matters of weeks, not months, to drill a well. But it’s that surface equipment that we need to pay attention to and keep working to improve, because right now that lead time can be a challenge.
Sean McMahon 10:19
So I know there are different types of geothermal power systems. Can you walk us through some of the most common ones, or what what Sage uses?
Jason Peart 10:25
Sure. So like I said, geothermal has been traditionally relegated to volcanoes, geysers, Ring of Fire, and what you’ve seen in the past few years is this movement to hot, dry rock. Now there are a variety of technologies out there that companies are working with to continue to make this economical, to continue to scale this. And there are kind of three big systems that we think of. One is what we call closed loop, where you drill deep into the earth, you drill multiple laterals, and you create basically a big downhole heat exchanger. This is laterals, just like we’re used to in onshore drilling, but now you’re doing a lot of them and just creating that heat exchanger. The second one that I mentioned is Enhanced geothermal systems. So this is technology that’s been developed with the Department of Energy over the past few decades. What you’re doing there is you’re drilling two horizontal wells, and you’re trying to connect them in the subsurface. So you’re creating underground fractures, hydraulic fractures, to connect two well wars with each other. You pump water down one, you pump water through that frack network into the other well, and it comes up that second well. So you’re connecting two wells in the subsurface through a FRAC network. As that water goes through the system, it’s heating up and coming back to surface. The Sage system is what we call geo pressured geothermal systems. And what we’re trying to do is not connect wells in the subsurface. We’re trying to connect wells at the surface, and we operate the system as basically a two cylinder engine. And so water’s coming out of one well, going down the second Well, it’s heating up, and then we produce it out of that well, gets injected, and the neighboring well heats up, and you keep cycling these two back and forth. What we’re doing in the subsurface is we’re creating what we’re calling a heat root fracture, which is a downward fracture to access more of that heat. We’re trying to control where that fracture grows, so we’re not losing water in the subsurface, which maintains our efficiencies in the system. And if you picture it, the fractures we’re creating. It’s like a lung. So you have a lung attached to your well bore, and as you fill it with water, it expands, just like your lungs expand, that water is going to heat up, and then we produce it out of the well using both the temperature and the pressure to generate electricity. By doing that, we’re helping the efficiency of the system, because not only are you using temperature, but we’re actually getting energy from the pressure, which is very efficient energy. It’s not a big piece of the energy, but it’s very efficient. And we’re also controlling where that water goes, because we’re not trying to connect those wells subsurface. The other benefit of geo pressure. Geothermal is if you bring it up whole to where it’s not as hot, so think less than 100 degrees C. Those lungs can be used for energy storage, so you fill them with water, let that water store down there until you need electricity into the grid, and then those lungs will close and bring that water up to surface to generate electricity when you need that energy. So the benefit of geo pressure geothermal, it’s higher efficiency, but it also is kind of dual use, because you can get some storage out of it, and you can get geothermal based load power out of it.
Sean McMahon 13:55
What kind of time frames are we talking about in terms of the energy storage capacity? Is it? You know, I have a lot of conversation about long duration. So is it hours? Is it days? You know, is it indefinite? What are we talking about?
Jason Peart 14:06
So we’re going to continue working all of that at our first commercial facility south of San Antonio, on property owned by the San Miguel Electric Co Op. We’re drilling that well right now at our test well in South Texas. We produced it for several hours. And what we see as the potential for this is multi day storage, perhaps even seasonal storage. When you talk storage durations, lithium ion batteries went out less than four hours. But if you need storage over four hours, our storage system, Earth Store, really starts to become competitive and does allow that long duration storage into the market, where you’re not stacking batteries. The reason is we control the growth of that lung and your water loss. We measured water losses of one to 2% which means you’re really controlling where that fluid. Those and you’re able to get it back up to surface when you need,
Sean McMahon 15:02
wow, that sounds like, I mean, one to 2% is sounds like a pretty impressive, not a lot of loss there. Now, obviously, this is, you know, the name of the show is the Renewable Energy Smart pod. So we cover a lot of other technologies, you know, specifically wind and solar, quite a bit. What are some of the ways that Sage works in tandem with those technologies.
Jason Peart 15:22
So where we see us working really well with renewables is particularly in the storage space. And so wind and solar are going to struggle to be base load because they’re up and running when the sun’s shining or when the wind’s blowing, but the 24/7 baseload capacity of those is going to be challenged. You can do batteries for a certain duration, but again, at some point, especially when you start stacking batteries, the economics become challenged on that. So where we see Sage and our Earth Store technology playing with renewables, is working in partnership with those solar and wind developers to create a 24/7 base load system. So you put extra capacity in the system of solar and wind. We pull that capacity into our storage well when it’s when we inject into it during the day, and then if when solar goes out, now we produce it at night, so we can inject in the well eight hours, and then produce it back for 16, and now you have a 24/7, baseload component. We did talk to one major utility on this concept, and there’s a lot of views on durations of storage. And where is it in the market? What do you need? You asked the question about long duration energy storage when we talked to one of the major utilities in the US. Their view is that once solar and wind start to penetrate the grid, 35% or more, you’re going to need about 10 plus hours of storage in the system. And so that’s where we see our technology really coming in and getting commercialized in scale to meet that demand and meet that need.
Sean McMahon 16:58
So you speak about commercializing this technology. So I want to get into some of those partnerships you’ve recently announced. Obviously, Sage made headlines a few weeks ago announcing a partnership with meta. I know you do some work with the military, So walk me through that first. I believe the Metadeal was about data centers, correct? That’s correct. And so what does that partnership going to look like?
Jason Peart 17:19
So what what we have on that is a term sheet to supply geothermal base load energy into the grid and into a grid with their data centers. That agreement set up in two phases, the first one being up to eight megawatts. Second phase being up to 150 megawatts. And what we see with the data centers and meta, I think is an endorsement of this. What we see in the data centers is that demand is going to drive the need. But for 24/7 clean energy, whether that’s geothermal base load or that’s storage paired with wind and solar, we’ve also seen deals around nuclear as well, the demands going to be there. A lot of solutions are going to be needed. And the Metadeal thing just confirms that when we look at some of the statistics just on data center uSage alone, was reading an article the other day, and Goldman Sachs projected 160% growth by 2030 that electricity demand for data centers, that’s about 600 terawatt hours. These are big numbers we’re dealing with. The EIA is projecting electricity demand doubling by 2050 and so these clean sources of power, whether it be geothermal base load or GGS, storage, with solar and wind, really are set up to play a pivotal role in that data center story. And Metawas really, really exciting opportunity to demonstrate that.
Sean McMahon 18:49
Yeah, obviously, you know, on this show, we’ve talked about data centers a lot, you know, all the AI demand, booming, everything. So whether it’s specifically the the project with meta, or just, you know, your typical, well, you’re talking about, I know there’s different kinds of data centers, right? There’s kind of the of the cloud computing ones, and then they have hyperscale data centers, which is really kind of the AI ones that just demand a lot more energy. So what are we talking about? You know, with a geothermal well, how many we’ll say, normal data centers could it power versus how many hyperscale data centers?
Jason Peart 19:19
So I think, I think the potential is there to really power these data centers, and the eight megawatts, the 150 megawatts with meta, that’s just the start. We’ve been asked in the past from others as well, what would it take to get to five gigawatts by 2030, and five gigawatts? It’s a lot of energy now. What is that in geothermal? It’s probably about 2300 wells, about 500 wells a year. That’s less than 5% of our onshore oil and gas capacity. So it’s it’s doable, but that geothermal baseload and that energy storage is really going to play a key role in the data centers moving forward, and we’re. Continuing to hear those numbers, but it’s going to take quite a bit of effort and investment.
Sean McMahon 20:04
That sounds like a lot of wells. But then when you look at the big picture, you know, on the on the oil and gas, it’s a smaller number, I guess, relatively speaking. So what are some of the details of the partnership you recently announced with the California Resources Corporation? I know it’s still early days for that, but what are we talking about down the road. Obviously, California is viewed by some as kind of a leader and how to tackle these issues. And so seems to me like having a footprint out there is going to maybe point towards where things will go in other parts of the country, for sure.
Jason Peart 20:32
So the CRC deal we’re really excited about. It’s an MOU to work with them to continue to explore our geothermal base load and our energy storage technologies in partnership with them. CRC has a lot of operations in the works for direct air capture and carbon capture. You may have heard of carbon teravolt, which is a program that they’re working on around carbon capture, direct air capture, that’s going to take power, and it needs to be clean power, and so geothermal base load and energy storage are really important in that picture, to get that clean power to operate these systems. The exciting part for us about CRC is this has been in the works for several months, and what we’re really happy about is the level of due diligence CRC did on Sage’s technologies, and so they hired a third party engineering firm to rebuild our models. They then analyzed that report and more of our models in house. We met with them several times to go through the technology, and the MOU is really the culmination of that. So to have a company like CRC endorse what we’re doing, company like CRC that understands the subsurface as well as the surface kit, endorse what we’re doing, and get to the point of an MOU with us, was really exciting, and we got a lot of questions about it at climate week for that same reason, they understand the subsurface components of this, which is what not everybody really is comfortable with. So it was really exciting to be able to get that. And we’re looking forward to what this entails moving forward,
Sean McMahon 22:15
Is this technology reaching a point where all 50 states, you know, have resources that are commercially viable, or is it kind of, you know, state by state, or region specific?
Jason Peart 22:23
So a lot of it depends on the whether you’re talking energy storage or geothermal base load. So from a subsurface perspective, storage and base load, it’s the same subsurface technology. The difference is the depth per storage. You’re not looking for heat, and so you’re trying to stay less than 100 degrees C to avoid two phase flow at surface. For geothermal base load, you need the economic depth of heat for 180 200 degrees C and above so on, from a storage perspective, that can be done nearly anywhere, because you can find less than 100 degrees C, at economic depths, pretty much anywhere. We avoid faults for a few different reasons. We don’t want to be fracking into a fault, because then we can’t control where the frack rose. We can’t control where the water is going, and we don’t want to be lubricating subsurface faults. But beyond the fault limitation that’s pretty available just about anywhere on the geothermal base load. Now you start to look economic depths to the hotter temperatures. You still primarily find that in the western part of the country, Texas has some really good potential, particularly in South Texas and up the coast, again, primarily West Coast, East Coast, you don’t see a lot of geothermal base load potential just because of how deep you have to drill to get to those depths. So that is, we talk about geothermal everywhere, really trying to get geothermal in more locations expanded out of the traditional areas, but at this time, there’s still that economic limit on depth to get to these temperatures, and that’s what’s going to drive the geography, but that’s the benefit of storage. It’s pretty accessible just about anywhere.
Sean McMahon 24:09
Okay, I know that becomes important, specifically on the political landscape these days. It seems like, you know, with certain policies coming through, you kind of want to have operations everywhere, at least in the US to kind of cover things politically. I know Sage has been interacting with the military on certain capacities. So what does that look like?
Jason Peart 24:30
We see the military, Department of Defense, as a great partner moving forward for our technologies and geothermal and in energy storage, what we’re doing in geothermal base load appeals to to that group. We’re creating 24/7 base load power that can be disconnected from the grid so it’s secure and it’s reliable and affordable. It can be within the fence line or just outside the fence line and at a surface level. It’s compact, and so think there’s a big draw to geothermal from these installations, and Sage has had a history now with the Department of Defense that we’re really excited of. So we started with the Department of the Air Force. We did a feasibility study at Ellington Air Force Base in Houston, and last week, at climate week, on the panel related to this topic, and the Air Force announced a contract with Sage geo systems and a grant award to go back to our south Texas test well, deep in that well, and show that we can generate electricity from heat. And then once that’s complete, next year, we’re really excited about the next steps with the Air Force. In addition to the Air Force, we’re doing work with the Defense Innovation Unit, closing up now a feasibility study with Fort Bliss and the army, and looking forward to additional feasibility studies with other branches of the military.
Sean McMahon 26:00
Gosh, I gotta say that makes perfect sense, you know, and just from a national security perspective, right? Like, if you got your power source either inside the fence line or right next to it, then you know, one less thing to worry about, perhaps, if it’s right there to protect so absolutely alright, one of the things I like to do with all the guests on this show is to ask them for their bold predictions. I know this was your first climate week, but, you know, looking at the landscape for geothermal energy and how things will play out. You know, if you head to climate week in, you know, five or 10 years, what are some of the hot topics going to be, you know, around geothermal?
Jason Peart 26:34
I would start with two. So one is the geothermal potential that gets gives us a lot of energy and a lot of excitement. We had a company ask us, what do you see as the geothermal potential in the US, and when we start mapping out depths to the temperatures I’ve mentioned, and what we believe to be economic and technical viability to get to those depths. We’ve removed things like national parks that you know you’re never going to build any kind of these installations in. You’re looking at like four terawatts of potential geothermal in the US rough estimate, but it gives you a size of the prize and an idea of what that could be. And so I do think this industry has a lot of exciting times ahead and a lot of growth potential ahead. I mentioned earlier on. You know what drives some of the development times? It’s that supply chain and it’s the the equipment lead times. Think there’s opportunities to innovate and look at from a surface equipment perspective, how do we improve that system? How do we make that system more affordable? How do we improve that supply chain to drop some of those lead times? And I think those are your two that you’re going to be hearing about in the future. So what’s that potential, and how big can this get? And then two, what do we need? How do we need to innovate at a surface level to really start driving the industry forward?
Sean McMahon 28:06
Okay, well, I think that’s a perfect place to leave it here. I know I got smarter in the last 30 minutes of talking to you. So Jason, thank you so much for your time today. I really appreciate it.
Jason Peart 28:16
Thanks. Sean,
Sean McMahon 28:18
Well, that about wraps up our show for today. If you like this show, please follow us on Apple, Spotify, YouTube, or wherever you get your podcasts. You can also find us on Twitter, where our handle is @renewablespod and if you want to get a daily dose of renewable energy news delivered directly to your inbox, head on over to SmartBrief.com and sign up for the Renewable Energy SmartBrief.