“That is a powerful combination, if you can have the excitement of a startup, and actually feel like you're changing things for the better.”: John Redfern on the experience of working on Eavor.
In this episode of Cleaning Up, Michael Liebreich talks to John Redfern, CEO of Eavor.
Michael and John begin by explaining why geothermal energy has not lived up to expectations as an energy source so far and how Eavor is different from other geothermal companies.
The two then discuss the place for Eavor’s technology amidst ever cheaper wind and solar energy.
They finish by discussing John’s experience of working on Eavor and how it has differed from other startups.
This is an abridged transcript of the conversation, edited for clarity.
Michael Liebreich: Why has geothermal energy never really fulfilled its potential and why is Eavor’s technology going to change that?
John Redfern: Geothermal, as you point out, has long been a contender. It's been around for 100 years. There was a brief period of building in the 70s and 80s and then it plateaued off again. There's a number of reasons for that, but what we think we're going to be able to achieve is to finally make geothermal scalable. There's a bunch of things that has made geothermal tricky in the past: it only works in a few very hot spots around the Earth. When you find that hot spot, it's not good enough that it's just hot. It has to be a highly permeable aquifer that can produce lots of water as well. It worked in a few special spots, like Iceland, around the Pacific, around Ring of Fire. Eavor’s a ‘geothermal anywhere’ sort of solution that you can put where the demand is, and not just next to a volcano. We are doing it in more places with fewer constraints and with more reliability.
ML: In a sense it’s the next generation. The first generation was where you could get the these unique combinations of heat and steam, Pacific Rim, Nevada, Iceland, Japan. Then there was this generation that everybody was excited about when I started New Energy Finance, which was all about creating these artificial reservoirs, fracking, putting water in, then it comes out and you use that. But you're not doing any of that. All it is, is horizontal drilling, closed loop. You describe it as creating a radiator. So what temperature does this radiator run at?
JR: It depends on where you do it, preferably the hotter, the better. I think the important thing to stress here is you've got a lot of similar technologies used in the oil industry and in geothermal, a lot of the drilling techniques and everything else. It's important to point out that the difference between oil and gas and traditional geothermal is much less than the difference between traditional geothermal and what we're doing. In both traditional geothermal and oil and gas, it's all about finding a rare permeable aquifer that you can produce a fluid from and bring it to the surface. And that is very efficient, but it brings up all sorts of environmental issues. Eavor is not like that, because we're not injecting any water into the subsurface. We're not extracting any water from the subsurface, we’re just going around in a closed loop and we're just harvesting the heat itself through conduction and that makes all the difference. The nice thing about our resource is, unlike oil and gas, the deeper you go, the hotter it gets, and the better the resource. It's just about finding a way to efficiently drill down as deep as possible with as much surface area as possible.
ML: What is your rebuttal to the people who claim that the Eavor loop can never be economically viable?
JR: When we first started doing this, a lot of people came out and argued that the thermodynamics were wrong, that we wouldn't actually get the amount of heat out that we're talking about. As we convince one person after another that the thermodynamics are right, that all our calculations are correct, then they would question how expensive is it going to be and is that commercial? I would think that the thermodynamics themselves are now considered settled science because the Department of Energy did their own thermodynamic analysis on Eavor loops and even the government says the thermodynamics are correct.
Now, when it comes to economics, anything that's at an early stage of development starts out with an expensive cost per unit. We look for a lot of our early projects in places like Germany, where sure we got expensive power, but we're able to deliver the type of power they want, where they want it, and they're willing to pay 251 euros per megawatt hour for a 20 year guarantee from the German government. That's financeable even at an early stage of development when things are at a high unit cost but of course just like the shale revolution in the oil and gas industry, with volume, you can drive down a learning curve the same way shale drilling did, the same way wind did. We're looking at driving the cost down to about six cents or below per kilowatt hour.
ML: Why would somebody want an Eavor loop over wind and solar?
JR: As we've discovered recently in California and Texas there is nothing cheaper per kilowatt hour than wind and solar, but they're intermittent, they don't work when the sun doesn't shine, and wind doesn't blow. To make wind and solar reliable, you need other sources of energy in the grid that provide the baseload. Big coal plants and gas peaker plants and nuclear plants are being phased out. So the question is, what do you replace those with, you can't replace them all just with solar and batteries, you end up blanketing the entire surface of the earth with solar cells. With Eavor loops a lot of it would still be solar, but what we'd squeeze out is a lot of the battery storage, a lot of the pumped hydro and doing that would save $20 billion a year just in the western US.
ML: Are you now just getting your inbox filled with the resumes of subsurface engineers and oil and gas people saying “I want to jump ship”?
JR: Definitely. But more than any other startup I've had, we get what I can only call fan mail. And a lot of those are people saying “Yeah, I really want to work with you. Here's my background, here's my thoughts.” But a lot of it is people just writing and saying “that's amazing, keep up the good work.” I'm a little bit unused to that, but it certainly makes it exciting. And I know for our entire team, they're motivated, not just from all the traditional, good reasons that doing a startup is exciting but they really feel like they're doing something good, making the world a better place. That is a powerful combination, if you can have the excitement of a startup, and actually feel like you're changing things for the better.