Skip to main content

BP, Chevron invest in promising geothermal technology

February 16, 2021

Market Watch:

BP and Chevron have made a landmark expansion into geothermal energy on Tuesday, betting on a new technology that could prove to be the world’s first scalable clean energy derived from a constant source: the natural heat of the earth.

The two major oil companies have headlined a $40 million funding round into a Canadian geothermal energy firm called Eavor. Based in Calgary, Eavor has pioneered a new form of technology that could feasibly be deployed in many places around the world.

The investment marks a key move into an area otherwise ignored by energy companies, which have largely looked to wind and solar projects in their efforts to diversify away from fossil fields. It is the first investment into geothermal energy for BP and a re-entry into the field for Chevron, which sold its geothermal assets in 2016.

Eavor has previously only accepted angel investment and venture capital. The $40 million injection will be used to further research and development to help scale the power system to be price-competitive. Eavor has developed a new type of geothermal technology that, in very simple terms, creates an underground “radiator.”

The Eavor “Loop” consists of a closed-loop network of pipes installed typically 3 kilometers to 4 kilometers below the earth’s surface, originating and terminating in the same aboveground facility. The pipes are installed using advanced drilling techniques perfected in the oil patch.

Liquid travels in the pipes from the aboveground facility through the hot ambient underground environment, before naturally circulating back to the top of the loop. The hot liquid is then converted into electricity or transferred to a district heat grid. A major advantage to this type of energy is that it is constant, providing a base load of electricity to a grid system without requiring challenging battery solutions of intermittent wind and solar power.

[Jack Denton]

More: This technology could transform renewable energy. BP and Chevron just invested

Join our newsletter

Keep up to date with all the latest from IEEFA