Canada's First Geothermal Plant Is Being Built in the Oil Industry's Backyard

Two hours southeast of Regina, Saskatchewan, Deep Earth En​ergy is preparing to harness the energy of a massive underground aquifer.

by Alexander Loschberger
Mar 27 2015, 2:00pm

​Hellisheiðarvirkjun, the second largest geothermal power station in the world. Image: ​Jesús Rodríguez Fernández/Flickr

At the end of last year, on a leased property two hours southeast of Regina, Saskatchewan, Deep Earth En​ergy Corp. began preparations for Canada's first geothermal power plant.

Unlike other renewable energy sources, such as wind and solar, geothermal energy runs 24/7, and isn't subject to seasonal variations as with hydroelectric. And according to CanGEA, the Canadian Geothermal Energy Association, Canada has enough geothermal potential to supply at least 5% of its electricity via geothermal. So why is this only Canada's first plant?

The country's abundance of other energy sources—such as oil and coal in Alberta, nuclear power in Ontario, and hydroelectric in Quebec and British Columbia—certainly haven't helped. And investors have been understandably wary of betting millions on an industry with notoriously slow startup times and few viable sites.

In other words, it would seem that the risk hasn't been worth the reward.

But Deep Earth Energy thinks it has found a winning combination of relatively low cost, location and, most importantly, a proven power resource. The company is taking advantage of existing oil industry data to skip the high cost of exploration, and is using new drilling technology that the company claims is earthquake-safe. It also helps that the Saskatchewan site is in a populated area where the locals are no strangers to energy development, and access roads already exist.

If successful, the company's planned 5 MW pilot plant will produce enough energy to serve around 5,000 homes.

Each plant would appear as little more than Quonset huts dotting the landscape with the rest of the action happening three kilometres underneath the prairie grass

At first glance, it may seem strange that the landlocked province of Saskatchewan would be the birthplace of geothermal energy in Canada. Aside from the fact that Saskatchewan is one of the country's top producers of oil and gas, almost all geothermal plants around the world, from the Philippines to Iceland, are found near and around tectonic plate boundaries where hot underground reservoirs are located relatively close to the surface. Logic says that British Columbia and the Yukon, where the Pacific plate meets the North American plate, would make the most sense.

But Southern Saskatchewan is nowhere near any plate boundaries, and that's where binary cycle​ technology comes in.​

Typically, a geothermal developer will drill multiple foot-wide holes several kilometers into the ground. These holes bring hot water to ground level where it flashes into steam due to the considerable pressure change, and the steam drives a turbine to generate electricity. But in Saskatchewan, the hot water aquifers are not only deeper, but also not hot enough to flash into steam once the water reaches the surface.

With binary cycle technology, hot water is brought up to the surface and into a heat-exchange chamber where it makes contact with a heat transfer fluid—usually isobutane, which has a low temperature boiling point. As the fluid boils, the resulting isobutane vapour drives a turbine to generate electricity. Once the isobutane vapour condenses, it is pumped back into the heat-exchange chamber to repeat the process again.

The hot water, which loses heat after coming into contact with the isobutane, is reinjected into the ground where it quickly picks up the Earth's heat and is soon ready to be brought to the surface once more.

A binary geothermal system. Steam is used directly from the wells to drive a turbine generator. Wastewater from the condenser is injected back into the subsurface to help extend the useful life of the hydrothermal system. Image: ​Wendell A. Duffield, John H. Sass/USGS

Deep Earth plans to use this technology to harness the 120°C heat of a vast underground aquifer first discovered by a US oil company, Amerada Petroleum, in the 1950s. The 40,000 square kilometer aquifer is larger than Vancouver Island and has the potential to produce hundreds of megawatts of power. Each plant would appear as little more than Quonset huts dotting the landscape with the rest of the action happening three kilometres underneath the prairie grass—a familiar scene, given the region's existing development of oil and gas.​

Less familiar in the province is the potential for seismic activity—something that, according to geologist and geothermal specialist Ryan Libbey from McGill University, isn't entirely avoidable. "Microseismicity associated with changing stresses in the reservoir due to production and reinjection is common in geothermal developments," he said.

"However these events are largely too small to be detected without very sensitive geophones," and according to Libbey, Deep Earth's pilot plant "is located in a stable sedimentary basin distal from any major active faults, which completely negates the possibility for a serious seismic event induced by the geothermal development."

But there have been exceptions. For example, in 2006, a 3.4 magnitude tremor damaged buildings in downtown Basel, Switzerland. This project, however, utilized a new technology known as Enhanced Geothe​rmal Systems (EGS), which differs greatly from the binary cycle technology Deep Earth will use. Still under development, EGS is more akin to the controversial practice of hydraulic f​racturing. High-pressure water is pumped deep underground to crack the rock, thereby creating an artificial hot reservoir. Proponents argue it could triple the global potential of geothermal, but nobody wants major earthquakes in th​eir backyard, and so Deep Earth is taking a safer tact.

An Enhanced Geothermal System. 1. Reservoir 2. Pump house 3. Heat exchanger 4. Turbine hall 5. Production well 6. Injection well 7. Hot water to district heating 8. Porous rock 9. Well 10. Solid bedrock. Image: ​Siemens Pressebild/Wikipedia

Ultimately, the project's biggest problem might be money. With $4 million already spent on feasibility studies, Kirsten Marcia, the CEO of Deep Earth, said she still needs to raise $5 million more from investors before she can receive approval for the loans that will finance construction of the plant itself. And because typical geothermal projects can take more than ten years to start—and sometimes fail entirely if the characteristics of the underground reservoir don't meet expectations—it doesn't take much for investors to lose faith and funding to dry up.

Borealis Geop​ower's project near Valemount, BC is still stuck in the preliminary exploration phase, while another promising project near Pemberton, BC was ab​andoned in 2014 after Ram Power Corp. spent $30 million drilling exploratory wells only to find that the resource was not good enough.

But when they do work as planned, the returns of a successful geothermal plant are impressive. At current electrical prices in Saskatchewan ($0.10/kwh), a rough calculation suggests that Deep Earth's $40 million project could pay for itself in just 15 years—and then continue to produce energy for many decades more. The world's oldest geothermal electricity generator, located in Larderello, Italy, has been operating for over 100 years. Though it started off small with a single 250 KW dynamo in 1913, the combined geothermal generating capacity of the region now tops 700 MW.

Although Deep Earth's 5 MW plant may seem puny compared with the gigawatts of wind power going up around the coun​try, it's the first step to proving that geothermal is a viable contender for clean energy in Canada, too. And the nascent geothermal industry hopes that funding will snowball once the first plant is pumping power into the Canadian grid. Geothermal may be a big gamble, but the potential payoffs are too great to pass up.