The geothermal opportunity (most) everyone is overlooking.

The geothermal opportunity (most) everyone is overlooking.

Last week yet another infrastructure investor told me: “We won’t do deep geothermal — too expensive, too risky. We’ll only do shallow.”

Not the first time I’ve heard the sentiment in the last few years. The other way it shows up is “let us know when you have bankable, shovel-ready projects”.

Although part of this attitude is investors being rightly disciplined in their risk appetite envelope, another aspect is the perception of what “deep geothermal” is.

For me, that simple comment highlights a geothermal energy blind spot in the UK and other areas. I think most people see two options:

>Shallow systems under 200m feeding heat pumps, subsurface uncertaintly turned predictable with test drilling – an infrastructure investment.

Or

>Deep wells beyond 4 km chasing power generation or combined heat & power. This one has frontier risk, full of “fat-tail” or black swan risks. A resource exploration play with the risks of oil & gas, but not the same rewards.

But there’s a huge middle “ground” that barely gets discussed: I’m calling it intermediate geothermal and I’ve redrawn our Causeway Energies version of the BGS classification diagram to illustrate what I mean.

Roughly 500 m to 2 km deep, 25–70°C source heat, serving district heating, industrial process heat, and thermal storage. Big industrial heat pumps likely still involved, but much higher COPs because of the warmer source temperatures.

This is where the risk-reward profile actually works for infrastructure capital. Proven drilling techniques from oil and gas. Manageable depths. Predictable geology in sedimentary basins that are already well understood through past oil & gas exploration and development. Already pretty close to shallow in terms of risk and uncertainty, and easily reduced to FID-grade by relative cheap geophysics and slimhole boreholes.

And a direct match with the UK’s overwhelming need — local (= sovereign), clean, heat.

The Netherlands and Germany are already operating at this depth range in similar geology — hundreds of systems, not pilots. The Project InnerSpace roadmap released last month identifies deep sedimentary basins as some of the UK’s largest medium-temperature heat resources. BGS has launched a national geothermal mapping platform. The UK now has a minister with specific responsibility for geothermal.

The investor who said “only shallow” wasn’t being conservative. We developers just haven’t properly illuminated this intermediate opportunity as an easier path to bankable geothermal infrastructure. Complimentary to shallow, particularly where network thermal demand is biased to heat.

I’m digging deeper into the intermediate geothermal investment case, particularly the approach to fund pre-FID development expenditure. If you’re working in this space, drop me a message — I’d like to compare notes.

#Geothermal #EnergyTransition #Infrastructure #HeatNetworks #CleanEnergy