Like a stand of eager horses chomping at the bit, Canada’s young geothermal industry is waiting impatiently at the starting line, ready for the race to begin.   But there’s no starting pistol in sight. At least, not yet.   Getting geothermal projects up and running in Canada "has been harder than it needs to be,” according to Alison Thompson, founder and president of the Canadian Geothermal Energy Association (CANGea).   Thompson, along with a group of delegates from Canada’s geothermal industry, is currently in Reykjavik at the Iceland Geothermal Conference where delegates, experts and scientists from around the world are swapping stories from the geothermal trenches.   Despite having the second largest delegation at the conference after Iceland, Canada has little to show or tell.   “Canada has an incredibly high quality resource and we can’t even get out of the starting gate,” Thompson told DeSmog Canada.

The Iceland Geothermal Conference 2016 in Reykjavik, Iceland hosts delegates from over 50 countries. Iceland is one of the largest producers of geothermal industry in the world. Photo: Carol Linnitt.

Maps released by CanGEA show Canada, especially in the oil and gas rich west, is teeming with geothermal activity, the same natural forces behind British Columbia’s beloved hot springs. Conveniently, much of the temperature of the province’s varied geography has already been mapped thanks to high levels of natural gas drilling.

“The United States is the number one producer of geothermal energy in the world. Mexico is number four,” Thompson said. “I want to see Canada up in the top five.” 

“We have enormous potential for geothermal energy in Canada,” Stephen Grasby, geochemist with Natural Resource Canada’s Geological Survey of Canada, said.   The “in place capacity” of geothermal energy in Canada “is well over a million times what Canadians actually use,” Grasby told DeSmog Canada.   “There’s always a distinction between what’s in place and what you can extract from that and that’s where economic barriers come in,” Grasby said, adding the high capacity is “comforting because it says we only need to produce a tiny fraction of that to supply a significant amount of energy for Canada.”   Canada spent a full decade studying the country’s vast geothermal resources during 1975 to 1985 but when the energy crisis ended, so did the country’s desire for renewable energy security.   But now concerns about climate change have pushed the alternative energy portfolio back onto the table.   In 2007 Grasby, along with a team of scientists and researchers, began updating Canada’s old research, finding geothermal potential exists right across the country.  

Stephen Grasby photographs Hellisheidi, the world's largest geothermal power station outside of Reykjavik, Iceland. Photo: Carol Linnitt.   How you view the resource “depends on what end use you want to make of it,” Grasby said. “You can use it for direct heating, electricity generation or heat exchange systems.”   Geothermal plays are greatly varied, Grasby said, meaning how one uses the resource largely depends on what they want to do with the heat.   Grasby, who is also in Iceland for the geothermal conference, said he hopes his work at Natural Resources Canada can help advance the geothermal industry in Canada.   “We’re not a regulatory department, our main focus is to provide industry the geological information they need. That’s the one area we can help in.”   “We find the haystack and leave it to industry to find the needle,” Grasby said.   “Now we’re looking at what we can do to move things forward.”   Ben Lee, owner of Raven Thermal Services, says it’s unfortunate that in Canada geothermal “has always been something of an afterthought.”   Lee, who has a degree in aerospace engineering and a background in the oil and gas sector, said there are many ways of using geothermal heat effectively.   “I had a bit of an epiphany flying over Regina once in the late winter,” he said.   “It was amazing to see everything was white except for this big teardrop shape off the south edge of the city.” Prevailing winds from the north were pushing warm air generated in the city south, “creating this teardrop of melt,” Lee said.   “It just happened to be the perfect scenario for me to see that marked in the snow.”   Lee said thinking about heat — how it’s generated and how it’s wasted — plays a big role in how he sees his company utilizing geothermal energy.   “How can we capture that heat and use it more efficiently?”   Lee is also attending the Iceland Geothermal Conference in Reykjavik, a northern city entirely heated using geothermal direct heat systems. Hot water, piped 27 kilometres in from Hellisheidi, Iceland’s largest geothermal energy plant, is circulated throughout the city for district heating.

Insulated pipelines carry hot water from the Hellisheidi geothermal power station to Reykjavik for district direct heating, a system that has been in use in the city since the 1930s. Photo: Carol Linnitt.   “A piece that gets missed in Canada is the direct heating side of geothermal,” Lee said. And being in Iceland, Lee said he’s excited to see geothermal heated greenhouses used to grow much of the country’s produce.   “They’ve got greenhouses growing food in the Arctic — as if that is not applicable to Canada,” he said.   “I had a friend go up to the Northwest Territories and pay $16 for a single red pepper. My question is how can we leverage our geothermal resources to address our concerns about food security up north, particularly for First Nations?”   For Lee, the opportunities for geothermal are a vast as the resource: “We can help a lot of people solve different problems with the same solution.”   But that solution is caught in a regulatory grey zone that has so far prevented any major projects from getting off the ground.   Despite the resource potential, Canada has zero mega watts of energy production.   “There’s a regulatory pathway to owning an oilsands mine in Alberta, or for opening up a coal mine,” Thompson said. “But there’s no regulatory pathway to operating geothermal.”   She added the industry doesn’t enjoy any of the tax benefits or incentives given to other sectors.   “At the national tax level we’re legally disadvantaged against mining, oil and gas and other renewables.”   “We’re not looking for a hand out we’re looking for a hand up — we want parity with other industries.”   Thompson said without favourable tax and policy structures in place, finding investors to back geothermal projects, which are capital intensive in the early stages, has been near impossible.   “Because we can’t get the tax incentives, unless you get a geothermal lover, an investor is going to put their money elsewhere.”   “We’ve been in this valley of death,” Thompson said, but added she hopes public awareness about geothermal as well as increasing government interest might get things moving in a positive direction.   “We can do this. We just need to want to do it.”

Image: Power generation at the blue lagoon, Iceland. Photo: Carol Linnitt.

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Thirty-one years ago, when the Site C dam in B.C.’s Peace Valley was rejected for the first time, BC Hydro was told to investigate alternatives sources of energy, specifically geothermal energy, by the B.C. Utilities Commission.

But the Crown corporation has utterly failed to do so, according to the report of the joint review panel on the Site C project, released last month.

Ken Boon, a Peace Valley farmer whose land would be flooded by the dam, pointed this out to the panel, noting that somehow “we’re back here now 30 years later and still talking about the dam.”

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The panel doesn’t mince words on the province’s failure to investigate alternatives.

“The low level of effort is surprising, especially if it results in a plan that involves large and possibly avoidable environmental and social costs,” it writes.

The $7.9-billion dam would flood 107 kilometres of the Peace River and its tributaries, threatening endangered wildlife and putting farmland under water.

Why haven’t alternatives been researched? The panel points the finger at the government’s lack of funding for geological exploration, while outlining a culture of complacency fuelled by plentiful, low-cost electricity.

But times have changed, the panel says, and failure to ramp up exploration of alternative renewable sources a decade ago is hurting the province now: “The panel concludes that a failure to pursue research over the last 30 years into B.C.’s geothermal resources has left BC Hydro without information about a resource that BC Hydro thinks may offer up to 700 megawatts of firm, economic power with low environmental costs.”

With the largest public expenditure of the next 20 years on the table and a lack of clear demand for the Site C project, a serious look at the alternatives is in order.

Someday, a growing B.C. population will need more energy. “The question is when,” the panel writes. “A second question is what alternatives may be available when that day comes.”

Geothermal offers alternative reliable source of power

Even with next to no research, BC Hydro has estimated geothermal energy could replace two-thirds of Site C’s power.

Canada is currently the only major country located along the Pacific Rim’s Ring of Fire not producing geothermal energy. A Geological Survey of Canada report recently noted that northeast B.C. has the “highest potential for immediate development of geothermal energy” anywhere in the country.

The advantage of geothermal power over other types of renewable energy is that it’s considered a “firm” source of base load power, comparable to a hydro dam. The United States has about 3,400 MW of installed geothermal capacity.

“The wind doesn’t always blow and the sun doesn’t always shine, but the earth is providing heat at a constant rate,” explains Grant Van Hal, a senior policy advisor for the Canadian Geothermal Energy Association (CanGEA).

During the Site C hearings, the association argued geothermal energy offers more jobs spread through B.C. and First Nations, less transmission upgrade costs, fewer environmental impacts and the planning flexibility to follow the actual demand growth in the provincial system.

Despite this potential, the panel noted that BC Hydro reported its current investment in geothermal research as under $100,000 a year.

“We don’t really have funding to do R&D… In fact we’re expected not to do that,” BC Hydro said at the hearings.

However, the Clean Energy Act states it is a provincial objective “to use and foster the development in British Columbia of innovative technologies that support energy conservation and efficiency and the use of clean or renewable resources.”

The panel doesn’t overlook this contradiction and raises several issues with it — chiefly that “if BC Hydro is to continually scan the resource and technology horizon for future supply and conservation possibilities, it must have a budget and a mandate to do so. Without these, long-term planning is seriously uninformed.”

In an effort to prevent future decision-makers from also being “seriously uninformed,” the panel re-iterates what was said in 1983:

The Panel recommends, regardless of the decision taken on Site C, that BC Hydro establish a research and development budget for the resource and engineering characterization of geographically diverse renewable resources.

Next, in one of the panel’s more pointed remarks, the report reads: “If the senior governments were doing their job, there would be no need for this recommendation.”

Building new supply bit by bit reduces costs

Despite the lack of detailed information for B.C., based on costs in other jurisdiction, the panel is able to say that geothermal power is available at a similar cost to Site C — and is more flexible.

“These sources, being individually smaller than Site C, would allow supply to better follow demand, obviating most of the early-year losses of Site C,” the report says.

That’s a point re-iterated by Paul Kariya, the executive director of trade association Clean Energy BC.

“Times have changed. We’ve been through an era of building big dams,” he told DeSmog Canada. “When you build a dam, you get this one massive lump of power and that’s not the way that energy is planned for anymore.”

This part of the Peace Valley would be flooded if the Site C dam is built. Credit: Graham Osborne.

While much has changed, some things haven’t.

“One of the things that hasn’t changed is governments of all stripes like mega projects,” Kariya says. “Site C is potentially the last mega hydro dam project in B.C. They’ll want it there as a potential.”

Matt Horne of the Pembina Institute, a sustainable energy think tank, says predicting future power demand is an uncertain game.

“One of the uncomfortable parts of Site C, is that you’re saying, ‘This is where demand is going to be at in 15 years,’ whereas other options … are much more scalable and can be matched to demand over time,” he says.

“That way, if we end up in a scenario where demand doesn’t increase as fast as BC Hydro is predicting, we don’t have to overbuild, whereas with Site C it’s one big block.”

A study commissioned by the Treaty 8 First Nations, “Need for, Purpose of and Alternatives to the Site C Hydroelectric Project,” found Site C is not a cost-effective solution to meeting BC Hydro’s forecast needs for additional energy and capacity. Study author Philip Raphals of the Helios Centre found that when compared to alternative portfolios built as needed to meet demand, the dam comes out as the most expensive of alternatives.

But what about natural gas plans?

Some of the bigger uncertainties in terms of electricity demand are around the scale of resource development, particularly the liquefied natural gas (LNG) industry. That’s because each large LNG terminal, if run entirely by electricity, would require an entire Site C dam to power it.

However, the panel found large LNG plants are likely to be powered by natural gas directly (because they’ve been given an exemption from the Clean Energy Act) and, even if they did use electricity, the power would be required before Site C became operational.

The panel seemed unimpressed by B.C.’s double-standard on the topic of burning natural gas for electricity (much more on that coming later in this series).

“LNG developers have been promised a free hand to burn their gas here for their own purposes, but BC Hydro has been denied the same privilege,” the panel wrote.

Cost of renewables dropping rapidly, cost of dams increasing

Merran Smith, executive director of Clean Energy Canada, says the cost of renewables has gone down rapidly in the past five years, with solar costs dropping 80 per cent and wind costs dropping 35 per cent.

“And we only see those lines continuing down, so a decade from now, the cost one will assume will be lower,” Smith told DeSmog Canada. “Whereas the cost for building large dams is only going up.”

After conserving as much as possible, it makes most sense to build new electricity supply where it’s needed, Smith says.

“There’s renewable potential all over this province, so rather than having one large dam in the north with a huge transmission line, we can create renewable energy in the regions where it’s needed,” she says.

Given this, Smith questions whether Site C is the best path forward for British Columbians.

“Why would we lock ourselves into a very expensive large dam when we could build units in clean, efficient renewable energy as we need it and where we need it?”

Photo: “Geothermal borehole house” by Lydur Skulason via Flickr

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