Despite abundant potential, geothermal energy in Canada has largely been written off as a curiosity. Investors have been wary of tapping into the country’s geothermal resources due to the large upfront investment needed to start a geothermal plant. Though Canada sits on the Ring of Fire along with the US, New Zealand, Mexico, and the Philippines, it is the only country out of this group that has yet to leverage this energy source. The problem is that, even in an area that is relatively easy to tap for geothermal energy, it can be difficult to determine the best spots to set up power plants without drilling.
However, under the right conditions, geothermal energy is actually cheaper than most other forms of electricity when accounting for the entire lifespan of a power plant. Furthermore, geothermal energy is less dependent on weather conditions than solar or wind, but, again, barriers to entry have prevented it from gaining a foothold in Canada.
That may change soon, though. Though the Canadian government has long passed over geothermal, the new federal budget, released last month, contains the expansion of financial mechanisms for the sector. This allows for burgeoning energy companies to write off more expenses when pursuing geothermal power, but is still only a step in the right direction when it comes to adoption.
Nevertheless, the Canadian Geothermal Energy Association (CanGEA) is excited about what this budget could mean for the industry in the future, with co-founder Alison Thompson calling it, “a milestone.”
Oddly enough, the tax code has mentioned geothermal energy in the past, but the language used prevented it from actually making a difference. The code recognizes “geothermal electricity,” distinct from geothermal energy in that it only acknowledges the electricity output of plants and not the steam and heat harnessed to actually produce it.
Now, under the new budget, capital can flow easily toward seismic testing and exploratory drilling, both necessary for surveying an area for geothermal. With Canadian geothermal now in exploratory stages, these changes are crucial to fostering the survival of this industry. In the future, more budgetary changes will need to be made to keep it alive, but for now, this marks an awareness that could lead to other things. Geothermal has been difficult to get off the ground in part because a lack of existing infrastructure has caused many to dismiss its viability.
That said, defunct oil and gas wells in Canada could be leveraged to provide geothermal power. In Alberta, abandoned oil wells have been examined for viability as geothermal plants, with the stated objective of heating greenhouses to grow vegetables throughout the winter. It’s called the Living Energy Project, and it’s intended not only to harness geothermal energy, but to provide jobs for former oil workers and make use of the thousands of wells that now stand unused throughout the province.
Beyond Alberta, others in Canada have becoming interested in retrofitting oil wells for use as geothermal plants. Politicians have spoke in favor of geothermal, and have found that many in government were previously unaware of the benefits of the industry. Now, the government has gone through something of an awakening. Though its setup cost is relatively high, geothermal is clean, renewable, and has the potential to create thousands of jobs. These factors have made it attractive to individuals across all political parties, leading to many lauding geothermal as “bipartisan energy.”
For Canada, geothermal is at a crossroads. It has begun to surface as a viable new industry, but the budget still does not offer it the support it needs. Thompson is hoping that, during the mid-year budget review, more support will be provided to groups likes hers that are attempting to give geothermal a foothold. She believes that the best way to roll out geothermal is by doing a lot at once.
“Let’s not do it piecemeal,” she said. “Because that does not lead to investor confidence or certainty.”
Once its barriers to entry have been breached, it’s wholly possible that Canada will embrace geothermal as a profitable, clean, and abundant source of energy.