An Italian geothermal contractor has fielded a blizzard of calls over the past 12 months from oil and gas players keen to find out how they can contribute their skills and resources to this burgeoning clean energy sector.
Milan-based Exergy ORC specialises in the provision of organic rankine cycle systems which convert geothermal heat (using a secondary organic fluid - not water) into a mechanical energy that then produces electricity.
The company also designs and supplies binary ORC plants in which the secondary fluid flashes to vapour, driving turbines and electrical generators.
Set up 2009, Exergy was acquired by Italy’s Maccaferri Industrial Group two years later before being sold to China’s Nanjing TICA Thermal Technology in 2019.
From no interest to huge interest
Exergy sales director Marco Frassinetti told the World Geothermal Congress in Iceland last week that upstream players’ interest in geothermal went from virtually nothing in 2019 and much of 2020 to hit the roof in the past 12 months or so.
“In the last year, companies that were not at all interested in geothermal are approaching it very seriously, especially oil and gas companies.
“We have been contacted by all the major companies in the last year, while two years ago it was an issue just to arrange a meeting and get in touch with them,” he said.
The calls to Exergy are largely coming from the engineering and technology divisions of upstream companies, said Frassinetti: “They’re trying to understand what they can do.”
In a plenary session, he told WGC delegates that oil and gas players see geothermal “as an opportunity to exploit their competence (in drilling and facilities) rather than have their company doing photovoltaics”.
“It’s an additional driver that is going to be important for the development of the geothermal market. The interest of these companies at many levels is a critical factor that we (the geothermal sector) need to exploit.”
There is a growing realisation in the geothermal community that the sector could learn a lot from their counterparts in oil and gas, particularly on drilling issues.
Discussing the geothermal business, Mette Lind Furstnow, solutions director for green initiatives at Danish downhole specialist Welltec, said “there is a lot of similarity with what has been done in oil and gas, especially in some of the more challenging parts of the world, and what should come now is a phase of optimisation that will bring value and profitability.”
Furstnow – who spent 11 years at Maersk Oil & Gas and Dong Energy after an early career in reservoir engineering – said oil and gas drilling engineers will rarely have dealt with the high temperatures found in some geothermal projects, but they have overcome other challenges such as high pressures and tight reservoirs, knowledge that could be valuable.
“When it comes to well designs and planning, (the geothermal sector) needs to simplify solutions and pick designs that can handle uncertainty, minimise rig time and minimise contingencies over the life of a well,” she said.
Furstnow said that well construction must be robust to reduce risk and, if possible, should be standardised, adding that some of the methodology used in oil and gas should be shared.
“Putting in place a structured approach using probabilistic methods would help.”
Sigurdur Sigurdsson, chief executive of Iceland Drilling, which has worked on geothermal projects all over the world, agreed with the Welltec executive about the need for simplifying well construction processes.
“We often see things that are over-designed using costly materials and with too many expensive backup plans on-site in remote areas that involve bringing in a lot of expensive equipment - just in case.”
In years gone by, oil and gas engineers were also accused of “gold plating” projects which added unnecessary costs and reduced profitability.
Exergy’s Frassinetti also picked up on this theme, saying how he has come across “over-specification many times” in bidding contests.
However, he cautioned that an overly aggressive, simplistic approach to projects can have its downside, particularly if there is a lack of sub-surface knowledge.
“De-risking sub-surface,” he said, “is critical to reducing (project) risks and therefore attracting investment.”
Many conventional geothermal projects lie in volcanic areas covered by basalt rock that make seismic imaging of deeper geological zones that could hold hot water a challenge – a problem Equinor – among others - met when drilling for oil and gas off the Faroe Islands and northern Scotland earlier this century.
Lack of focus
Another problem on geothermal projects, explained Sigurdssen, can arise in projects funded by international banks and soft loans where “too many opinions have to be written into documents.”
To tackle this issue, he suggested “each project needs someone like an entrepreneur with passion and capabilities and knowledge, to say we’re going to do things this way.”
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