How Artificial Geothermal Energy Works

The Cost of Artificial Geothermal Energy: Dollars, Cents and Watts

We can't avoid the economics. Investors want to know how fast engineered geothermal systems (EGSs) will pay for themselves, and consumers are concerned about the cost of the power.

The most expensive part of engineered geothermal energy is drilling the wells. To drill one 2.5-mile (4-kilometer) well, which is middle-range, it costs about $5 million. If the heat happens to be deeper, at 6.2 miles (10 kilometers), the drilling cost skyrockets to $20 million per well [source: Tester]. These costs could drop by the millions per well as drilling technology progresses.


Once the wells and power plant are built, the system is inexpensive to operate. The heat from the Earth is free. Operators pay to keep the water pumps pumping and to maintain the wells. They also pay to redrill wells every five to 10 years, says Tester.

A mature engineered geothermal power plant can churn out between 1 and 50 megawatts of electricity, enough to supply 800 to 41,000 average U.S. homes [sources: Tester, EIA]. The output is less than some natural geothermal plants and pales in comparison to the more than 2,000 megawatts that a coal-fired plant can supply [source: Tester].

Investors can get a good deal in the end, each year recovering 17 to 18 percent of the money they spend on building underground parts of the system, the same as what they'd get from an oil or natural gas field, says Tester. For consumers, the cost of the electricity depends on how well the system milks heat from the rock. The cost drops if more water circulates through the rock and if the recovered water is hotter.

Tester and his colleagues ran models on six U.S. locations where engineered geothermal systems would be practical. They estimated that the first engineered geothermal systems would be inefficient, getting 20 kilograms of hot water per production well per second, setting the cost of the electricity between 18 and 75 cents per kilowatt-hour. But with mature technology, able to harvest 80 kilograms of hot water from each production well per second, the cost could drop to 4 to 9 cents per kilowatt-hour, in-range or below the cost of electricity from coal [source: Tester].

Raising the power output and lowering the cost is a manageable engineering problem, says Tester. "We don't have to make significant new discoveries or find new materials. We have to re-engineer the subsurface [rock] system by better knowledge of what's down there. It's a much more tractable route."

Read on to learn why Australia might become the EGS capital of the world.