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The DEEP Geothermal project near Torquay, Sask.

The Globe and Mail

On a late-summer day in southern Saskatchewan oil country, a mud-splattered crew on a drilling rig gets ready to pump cement down a hole that plunges three kilometres into the Earth. As they yell to each other over jackhammering and the thuds of equipment, a combine combs the flat prairie in the distance, trundling past lazily dipping oil pumpjacks that dot the landscape.

This crew isn’t drilling for oil, though. They’re after hot water. It’s here, and by 2024, DEEP Earth Energy Production Corp. hopes Canada’s first geothermal power plant will be, too, generating low-emission electricity by tapping into those steamy reservoirs and pumping them to the surface. It’s one of a handful of projects across the country pursuing geothermal energy, bolstered by a growing global push for net-zero emissions and government cash injections.

DEEP’s test wells are scattered around the prairies about 10 kilometres from the U.S. border, just south of the small village of Torquay. Feasibility studies complete, the project is moving into more detailed engineering and testing, which will govern the final cost of the 32-megawatt facility.

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The long-term goal of DEEP is to provide hundreds of megawatts of baseload power onto Saskatchewan’s power grid, using small 20MW power plants. Kirsten Marcia, DEEP’s president and chief executive officer, hopes to have a power-purchase contract in place by January with SaskPower, Saskatchewan’s government-owned power supplier.

Geothermal is still in its infancy in Canada, partly because of the price tag.

While the cost of solar has plummeted by close to 90 per cent over the past decade, geothermal remains an expensive source of renewable power.

Sara Hastings-Simon, an assistant professor at the University of Calgary and an expert in energy, innovation and climate policy, says that geothermal was left behind in the first round of renewables development. It was further from commercialization than wind or solar, and less competitive.

But as the focus on decarbonizing Canada’s power grid grows, Dr. Hastings-Simon says it’s worthwhile to start building out the geothermal resource.

“I feel like there’s a little bit of a geothermal renaissance,” she says, pointing to recent U.S. investments to develop, pilot and scale up geothermal technology. “I do think it’s Canada’s time to shine. It’s like the next block that’s needed in the building of the decarbonized grid.”

Natural Resources Canada is already betting on geothermal power. It has awarded millions in grants over the past few years, including to the DEEP project in Saskatchewan; the Tu Deh-Kah project in British Columbia; and a unique closed-loop geothermal technology, called Eavor-Loop, in Alberta.

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Recipients of those grants say the cash was crucial in getting projects to the next stage of development – especially in fossil fuel-rich provinces in the West, where the technology, equipment and workers needed for geothermal projects compete with the oil and gas sector.

“There’s a whole world-class industry right here,” says DEEP’s Ms. Marcia. “We’re not outsourcing this from California to do a geothermal project. We’re outsourcing this here in Saskatchewan with all these guys who are going home to their families every night.”

Proponents of geothermal also see it as a transition opportunity, where workers with oil and gas experience can easily pivot their skills to a greener sector. And here in southeast Saskatchewan, deep in oil and gas country, the general consensus is that any opportunity to get people and equipment back to work is a good one.

Take the rig that towers over the prairie at DEEP. A few years ago, it was used for oil and gas. Now it’s drilling for hot water, following a stint on a potash project. When it’s done at DEEP, it will move to another site to drill for lithium.

The rig belongs to Panther Drilling, one of the few local drilling companies still in business after years of turmoil in the oil industry. President Cory Hicks says DEEP has been a boon for his company. After all, he says, the work still boils down to one task: “We are basically digging a hole.”

About 2,000 kilometres away, in northern B.C., the Tu Deh-Kah project – owned by the Fort Nelson First Nation – is targeting a geothermal facility of seven to 15 megawatts that will provide heat and power to the community.

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It comprises two wells, one of which is an old gas well in the Clarke Lake field, deepened and repurposed for geothermal. Late last month, to better reflect its Indigenous ownership, the First Nation renamed the project Tu Deh-Kah – which translates to “water steam” – and blessed the site with drummers and prayers.

Chief Sharleen Gale says the project has been in the works since 2017, when initial investigations by Geoscience B.C. confirmed the region had excellent geothermal potential. And while the ultimate goal of Tu Deh-Kah is to power and heat Fort Nelson, she says numerous potential spin-offs include food security using reliable renewable heat for greenhouses.

“These kinds of projects aren’t here to displace oil and gas completely. We all use things that require oil and gas products. But we have to be able to work in balance,” she says. “In my eyes, geothermal is a viable technology, and it aligns the economy with the environment.”

Eavor Technologies Inc., headquartered in Alberta, goes one step further in the quest for zero emissions. Unlike conventional projects, the company’s Eavor-Loop geothermal technology is a sealed-off, closed-loop system that doesn’t require a permeable aquifer.

Eavor’s Neil Ethier compares the technology to a vehicle radiator – which circulates fluid in a closed loop to remove heat from a gasoline engine – and says it can be placed almost anywhere, making it more scalable.

Eavor drilled its first full-scale demonstration project in 2019, near the Alberta community of Rocky Mountain House. Now, more than half of the company’s current projects are in Germany. As that country moves away from nuclear, the government is offering incentives to inject more geothermal power into the grid because it provides reliable baseload electricity.

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Oil companies BP and Chevron have also hedged their bets with Eavor, investing US$40-million in February.

“That not only gave us the equity; it also gave us the clout,” Mr. Ethier says. “We had super-majors look at this for months and months and months and months, to go through the due diligence to say, ‘Yes, this technology is working, and we’re willing to put our name and our money into it.’ ”

Political will – and the dollars that back it – will likely continue to play a crucial role in geothermal development.

In Saskatchewan, Energy and Resources Minister Bronwyn Eyre says that although geothermal is relatively new to the province, the government is “exploring everything we can do, policy-wise.”

Next door in Alberta, the provincial government passed a Geothermal Resource Development Act in 2020. Energy Minister Sonya Savage told The Globe and Mail in an e-mail her government is working on other regulatory enhancements and anticipates proclaiming the Act later in 2021.

Alison Thompson, chair of the Canadian Geothermal Energy Association, says that along with geothermal power, Canada has a huge opportunity to use the technology for heat.

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“There’s no party that doesn’t like geothermal,” she says, “but the more knowledgeable our politicians or bureaucrats can be, the more effective we’re going to be as an industry.”

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