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Summary:

A startup backed by Google, Khosla Ventures, Kleiner Perkins and Paul Allen’s investment firm, called AltaRock Energy has delivered an important breakthrough for the next-generation of geothermal technology at a site in Bend, Oregon.

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Not a lot of startups tackle the field of geothermal power, which entails tapping into hot rocks deep in the Earth to produce energy and electricity. That’s because it can be an expensive proposition, and can require extensive permits and environmental reports. But a rare startup called AltaRock Energy has recently delivered a promising breakthrough that it says can lead to the commercialization of its next-generation geothermal technology.

AltaRock Energy — which has backing from venture capitalists, as well as Google and Microsoft co-founder Paul Allen’s investment firm — has been working on enhanced (sometimes called engineered) geothermal tech. This technology drills wells deep into the ground, injects them with cold water to fracture the hot rocks, and creates a geothermal source of power where none was naturally occurring. Traditional geothermal systems, in contrast, tap into naturally occurring geothermal reservoirs (you know, the kind you see on the side of the road in Yellowstone National Park).

The promise of next-gen geothermal power

Geothermal power has massive potential in many areas of the U.S. but it has long remained a niche technology. A study that came out a few years ago from MIT found that enhanced geothermal system technology could create 100 GW of electricity by 2050 if the technology got reasonable investment in R&D — 100 GW is equivalent to the power produced by 100 large coal power plants. But given that traditional geothermal systems are the only ones in use, geothermal power sources have been stuck in isolated areas that have geothermal activity.Raser To Switch On Low Temp Geothermal Power

Geothermal power is also the holy grail of clean power because it’s not intermittent like solar or wind power. Geothermal power can produce electricity 24/7 — including at night — while wind power drops off when it isn’t windy, and solar power ends when the sun goes down. Constant power like this is called baseload power, and it’s one of the reasons why coal and natural gas are so widely-used.

AltaRock Energy said that it has reached a milestone at its demonstration site in Bend, Oregon, which it believes is a good sign that it’ll be able to commercialize its enhanced geothermal tech. AltaRock CEO and founder Susan Petty told me that the company has been able to create multiple, stimulated geothermal areas, from a single drilled well. “This has never been done before,” said Petty, who has been involved with geothermal stimulation since the 1970s.

Creating multiple geothermal zones from one well is important, because it means more geothermal power can be produced and the process becomes a lot cheaper in the long run. Enhanced geothermal systems in the past have created a single stimulated zone, but none — until now — have created multiple zones. While traditional geothermal can be cheaper than coal power, enhanced geothermal systems are generally more expensive than traditional ones. But being able to create multiple geothermal zones from one well brings down the overall cost of enhanced geothermal by 50 percent, Petty said.

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The site in Bend was an area where geothermal developer Davenport Newberry had already drilled a well and the site had no stimulated geothermal area before AltaRock installed its technology. Davenport Newberry gave AltaRock access to the well and agreed to share data with the startup. The Department of Energy also gave AltaRock a $21.4 million grant to work on the project. Petty said the well was the equivalent of “a blank slate.”

So what next?

AltaRock is still in the testing and research phase. Now that it’s stimulated multiple geothermal zones at the site, it still needs to run injection tests and test the heat exchange areas. It also needs to drill a production well in the stimulated zones, which could happen by the end of this year or early 2014. Enhanced geothermal sites need at least two wells, one for injecting and one for producing the power.

After this testing phase, and if everything is on track, AltaRock plans to build a demonstration sized power plant on the site, and eventually a utility-scale power plant there, too. Larger plants need more permitting, and more money. So this could take many more years. Petty said the company is now looking to raise project financing from strategic partners that are interested in seeing this brand new next-gen tech commercialized.

AltaRock has already raised $26 million from Google, Kleiner Perkins, Khosla Ventures and Vulcan Capital, the investing arm of Vulcan, which was founded by Microsoft co-founder Paul Allen. But VCs probably won’t want to back this kind of capital intensive project, particularly now that greentech investing has gone out of vogue in the Valley.

Bend, Oregon

Despite the breakthrough, AltaRock still faces hurdles. The company was originally working on a demonstration project in Northern California back when it was founded in 2007 when technical problems with drilling through hard rocks prompted the company to give up that project in 2009.

That California project also faced protests from residents living nearby who were worried about seismic activity created by the drilling. Rock fracturing creates disturbances deep inside the Earth, and some critics say the technique could create earthquakes powerful enough to threaten the safety of nearby residents. Such concern shut down an enhanced geothermal project in Switzerland.

But Petty said that at its project in Bend it created a dialogue with residents and protestors in the community, and the company did constant testing and monitoring of the system throughout the stimulation work. The seismic activity was so small as to be virtually undetected by nearby residents — snow falling and trains running through the area had higher seismic activity than the geothermal site, said Petty.

These type of new geothermal projects also generally take a lot longer than expected to build. Just getting permits for this initial phase of the Bend project took AltaRock two and a half years, when Petty said she expected it to happen in closer to one year. But if there’s anything we’ve learned from the cleantech boom and bust of the last six years, it’s that clean power innovation takes time.

  1. Maybe they should start building disaster recovery data centers on geothermal hotspots.

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  2. Katie,

    How does snow falling generate seismic activity?

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    1. Avalanches, possibly.

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    2. Snow falling from trees makes heavy “thumps” on the ground

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  3. Geophysicist Extraordinaire Friday, January 25, 2013

    This is very admirable work. Why doesn’t Al Gore blog or tweet more good news about the heroic attempts being made by AltaRock to really make a difference in the world? Is it because Al wouldn’t stand to make millions if, say, AltaRock was successful and this reduced Al’s opportunity to take profits on carbon trading? Has anyone noticed that the Chicago Climate Exchange is no longer? Anyway, the focus should most definitely be on companies like AltaRock and great people like Ms. Susan Petty and AltaRock’s investors taking the risk, not Al Gore’s pet projects like Current TV or having his friends like Bill Clinton fly into North Korea on a gas guzzling carbon emitting private jet to rescue the women who were working for Current TV and teasing the North Koreans on the Chinese border just to get better ratings for the not-very-often-watched Current TV. If AltaRock and Susan Petty are able to make a scalable geothermal energy breakthrough that changes the world then the Norwegians darned better well give Ms. Petty a Nobel Prize because she will really be deserving of one!

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  4. Thanks for your interest in our project.

    You are right, “seismic activity” isn’t the right term – a more accurate term would be seismic energy or ground motion. Passing trains and snow falling off of overloaded tree branches impart energy to the earth’s surface which travels away from the train or impact as seismic waves. The passage of these waves can be detected as ground motion by sensitive seismometers.

    What was meant above is that the ground motion at the seismometers AltaRock installed was greater due to trains and snow falling than it was due to EGS related microearthquakes.

    Trenton Cladouhos
    AltaRock Energy

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  5. Congratulations on sticking to the dream that our energy future is right under our feet. Here on the Oregon Coast the Wall Street Banksters are again sniffing out huge federal subsidies they see coming for wave energy devices that will never pencil out. And they’ve got powerful political interests wrapped around their little fingers, fingers that are tying up more and more fishing grounds off the Oregon Coast that are currently producing a $300 million dollar a year fishing industry. It is deeply threatened by these dark forces.

    AltaRock, you hold the Oregon Coast in your hands…and everywhere else where the hollow promise of wind and waves hold sway based on monumental greed and wrong headed attitudes about green energy. Keep going!! Tell us how we can help with streamlining permits, showing support. It’s kinda like that line out of Star Wars….”Obe Wan AltaRock, you’re out only hope!”

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  6. …you’re our only hope!”

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  7. Can it be possible by using Geothermal power we will extract heat & by commercialising it we may put our EARTH at risk by loss of its Magnetism. As per my knowledge our Magnetism is due to molten core & by extracting heat we increase the speed of cooling EARTH core.

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