Environmental News

As concern mounts over the viability of traditional non-renewable energy sources, interest  in alternative energy sources available to Canadians has increased. Slowly but surely, renewable energy projects (including wind turbines, solar power, and tidal energy) have been establishing themselves across Canada. Among these new energy sources is geothermal energy.

Geothermal energy captures the heat from naturally occurring steam and hot water trapped in reservoirs under the Earth’s surface. This is done by drilling one to three kilometres below the surface and injecting cold water into the hot, porous rocks below. Once forced to the surface, the resulting steam turns a turbine to generate electricity. Besides driving the steam-turbine generators, geothermal energy can also be used to heat hot water or air for space or water heating. What gives geothermal energy an edge over other renewable energy sources, like wind and solar, is the fact that it provides consistent power twenty-four hours a day. Its function as a base load power (the minimum amount of power required to prevent a blackout) is what makes it extremely valuable.

The potential for geothermal energy greatly depends of the geological aspects of a given region. Canada’s physical environment is certainly endowed with rich geothermal potential, (especially in the western and northern provinces) though development of these resources is slow, due to high start-up capital costs and weak federal and provincial government support.

Interest in the industry is mounting, and Canadian innovators have not let a lack of government support stop them. Canadians produce about twenty per cent of the world’s geothermal power generation, with twenty-seven per cent of the United States’ geothermal development being carried out by Canadian-based companies.

Despite the weak support from the Canadian government, industry developers appear determined to start building Canada’s first commercial geothermal plant. One of these innovators is Deep Earth Energy Production Corp. (DEEP), a Saskatoon-based start-up that is hoping to become Saskatchewan’s first geothermal power producer by establishing a plant near the city of Estevan. This project has received a $2-million commitment from provincial utility SaskPower and Natural Resources Canada, to help fund an engineering design study. This project is now preparing to drill its first well, with power generation happening as soon as 2015. The project has the potential to grow to as many as five different projects that could end up producing hundreds of megawatts of base load power.

As the DEEP Corp. project gets underway, impediments for the industry are still very present elsewhere. A regulatory regime conducive to development is not yet established, with British Columbia and the Northwest Territories being the only Canadian jurisdictions that issue permits for geothermal projects. As well, financing for development projects is hard to come by, with small companies like DEEP Corp. having difficulty raising equity or debt finance in initial drilling stages because investors feel the risk outweighs the return. In this sense, government assistance in aiding this infant industry during its initial phases of development could greatly ease the growing pains of geothermal energy development in Canada.

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