Is geothermal energy finally seeing the light of day?

While the U.S. has been a global leader in tapping the earth’s heat, Canada is starting to play catch-up

Geothermal Energy's Golden Age: Is Canada Ready?
Photo courtesy of the Nesjavellir Geothermal Power Plant in Þingvellir, Iceland.

Twenty years ago, Stephen Grasby was met with blank stares when he mentioned that he studied geothermal energy. Taking no offence, the geochemist plugged away as a researcher for the Geological Survey of Canada, convinced that one day the stars would align such that geothermal energy – the earth’s heat – would form an instrumental part of the country’s energy picture.

Now that day seems to be dawning. It’s not the energy source that has changed; from as early as the Paleolithic era, humankind has exploited the heat within the earth for bathing and washing in hot springs. Now we know that constant energy source originates in the earth’s molten core, estimated to be 6,000°C, comparable to the temperature of the sun. That heat is a constant and, thanks to radioactive decay, expected to remain so for billions of years.

What has changed, however, is the state of technologies required to access that energy and, more importantly, a growing global consensus that, in an era of climate change, this low-carbon energy source needs to be fully exploited.

“Geothermal is the best of the renewables,” says Grasby. Unlike wind and solar energy, which are intermittent and require battery storage, geothermal can provide baseload power. It is also dispatchable, meaning that its generation can be calibrated according to demand, setting it apart from nuclear energy. And geothermal energy is incredibly diverse in its applications, with a spectrum ranging from electricity generation through direct heating and cooling systems, with additional possibilities for greenhouses, aquaculture and carbon capture.

Geothermal production is surging worldwide. Iceland, which began drilling geothermal wells in the mid-19th century, now heats 85% of its houses with geothermal heat and generates roughly a third of its electricity in geothermal power plants. Among the fastest-advancing geothermal countries are Turkey, whose geothermal electric production has increased 100-fold in the last decade, and New Zealand, whose volcanic zones currently supply 17% of its national grid.

The United States, blessed with the largest dry steam reservoir in the world – the Geysers of northern California – has the greatest total installed geothermal capacity, with 93 power plants generating 16.7 billion kilowatt hours of geothermal energy throughout the year. That’s still just 0.4% of American electric generation. In an effort to spur on the sector, President Joe Biden recently announced funding of up to US$20 million for projects that improve drilling efficiency, recognizing that geothermal’s heavy upfront costs are a major impediment to investment and growth.

In a world of steadily increasing geothermal capacity, Canada is often cited as a laggard. It’s the only country along the Ring of Fire – the belt of intense seismic activity that runs beneath the Pacific Rim countries – that has yet to feed geothermal power into its grid. But Canada’s negligible performance says less about a lack of determination or ingenuity than about geography and economics. And as the latter shifts – with the rising price of carbon (thanks to a national tax on carbon) and the surging cost of natural gas – Canada’s back-of-the-pack position is set to change. It is expected that Canada’s first commercial geothermal power project, developed by Deep Earth Energy Production (DEEP) in southern Saskatchewan, will be up and running by 2024.

“The potential here is huge,” says Grasby, and he would know, having spent the decade between 1975 and 1985 charting the country’s geothermal potential for the Geological Survey of Canada. The initiative was driven by the energy crisis of the 1970s and the resulting determination to reduce Canada’s dependence on oil. Research scientists drilled wells, and the first geothermal power was produced – but never connected to the grid. As the crisis passed and the price of oil sank, so too did enthusiasm for geothermal development.

It’s easy to be cynical about climate conferences and targets and posturing, but what I see happening with geothermal is really exciting. This energy transition represents the greatest economic opportunity in the last century.

—John Rathbone, engineering consultant

For 15 years, the results of Canada’s first geothermal program mouldered in garages and basements. But come 2000, with the rise in oil prices and a growing interest in renewables, Grasby was tasked with reassembling and digitizing the dusty data. The resulting 2012 report concluded that “Canada’s in-place geothermal power exceeds one million times Canada’s current electrical consumption” while also acknowledging that only a fraction of that power could realistically be produced.

To generate electricity from geothermal heat, a confluence of factors is needed: just the right temperatures, rock porosity and water pressure. In Canada, those conditions exist, deep in the volcanic rocks of the Pacific coast and the Western Canadian Sedimentary Basin that arcs down from the Northwest Territories through northern B.C., Alberta and southern Saskatchewan. But the question is precisely where they lie. The prohibitive expense of exploratory drilling nudges geothermal producers into collaboration with their wealthier energy cousins in the oil and gas sector.

Iceland now heats 85% of its houses with geothermal heat and generates roughly a third of its electricity in geothermal power plants.

“You’ve got a six-square-mile field that is surfacing hot water, 70-plus people who know how to work it, and over 60 years of historic data on its geology and chemistry,” says Lisa Mueller, CEO of Calgary-based FutEra Power, describing a typical legacy oil field in western Canada.

What many would see as a relic of the dirty energy past, Mueller sees as the basis of a clean energy future. Mueller is working on Canada’s first co-produced geothermal and natural gas power project. She expects the company’s pioneering plant, located in the Swan Hills of central Alberta, to be grid-connected by summer. Initially, two-thirds of the plant’s 21 megawatts will be derived from natural gas, and one-third from geothermal heat. But in a second phase, the plant’s hot water reservoir will be used to sequester carbon, and ultimately – Mueller predicts by 2025 – the plant will be operating at net-zero emissions.

Mueller, who once worked for oil behemoth Shell, has become a fierce proponent of low-carbon energy production. “It’s going to take an unparalleled effort to get us where we need to go,” she says. She’s convinced that the Swan Hills project will demonstrate a technical path forward for the oil and gas industry, in Canada and beyond. Grasby agrees.

“Geothermal presents incredible opportunities for Canada’s petroleum industry,” he says, adding that its geological knowledge and technologies will be key to geothermal development.

Beyond power production, geothermal energy is poised to play a significant role in Canadian heating and cooling systems. This makes good climate sense; while our grid is largely low carbon, thanks to an abundance of hydro and nuclear energy, Canada’s heating needs are currently met almost exclusively with fossil fuels. And those needs are great, accounting for some 60% of the country’s total energy consumption.

Sharleen Gale is Chief of the Fort Nelson First Nation, located in northeastern British Columbia and close to Clarke Lake, the province’s oldest natural gas production area. About a decade ago, as Gale was looking for economic development opportunities for her community beyond the depleting gas reservoir, an observation struck her. “When you drove along the pipeline,” she said, “you saw the melted snow all around it.”

For a remote, northern community, this seemed an incredible waste. Gale applied for a provincial grant to study the area’s geothermal potential, and now, with a major investment from the federal government, the Fort Nelson First Nation is using the Clarke Lake infrastructure – roads, well pads and wells – to develop a $100-million geothermal project that will not only produce power for the B.C. grid but also heat 14,000 local homes, as well as greenhouses to grow food.

Gale is hugely excited about what the Tu Deh-Kah (“water steam” in the Dene language) Geothermal project could mean for her community: energy self-sufficiency, food security and economic opportunity. With pride she explains that the project’s first two employees are community members who have returned to the remote First Nation following their university studies. “This project will protect who we are,” she says.

But the potential for geothermal heating in Canada is by no means limited to the North. Unlike geothermal power generation, which requires deep drilling to access temperatures upwards of 100°C, geothermal heating and cooling – also known as geo-exchange systems – involve lower temperatures, shallower wells and smaller bore fields. The idea is to create a kind of thermal piggy bank: sinking surface heat into the earth during hot months, to be extracted with pumps to heat buildings during cold months. The principle can be applied to single dwellings or at the “district” level of a university campus, condo development or subdivision. According to the Sustainable Technologies Evaluation Program, there are currently over 100,000 geothermal heating and cooling systems operating across Canada.

“This project will protect who we are."

–Sharleen Gale, chief of the Fort Nelson First Nation, on the Tu Deh-Kah Geothermal project


The University of Toronto is building a geo-exchange system under its downtown campus, destined to be the largest of its kind in urban Canada and to reduce the university’s greenhouse gas emissions by 15,000 tonnes of carbon dioxide equivalent by 2024 – equivalent to taking 3,260 gas-powered cars out of circulation. According to John Rathbone, a Guelph-based engineering consultant, projects of this kind are proliferating across southern Ontario.

Rathbone runs a low-carbon energy consultancy, and in the four years of its existence, he has seen the interest in geo-exchange systems move from a climate-conscious, progressive fringe toward the bottom-line-driven centre. He attributes the shift to carbon pricing, the private sector’s growing commitment to ESG (environmental, social and governance) principles and the Toronto Green Standard, the city’s increasingly rigorous catalogue of environmental building standards, which is impacting development in other municipalities as well.

“It’s easy to be cynical about climate conferences and targets and posturing,” Rathbone says, “but what I see happening with geothermal is really exciting. I actually think this energy transition represents the greatest economic opportunity in the last century.”

Grasby shares his optimism. “Canada is on the cusp,” he says, citing the number of geothermal project “firsts” on the immediate horizon. He believes that once their success has been demonstrated, the investment floodgates will open and that if provincial governments create proper regulatory frameworks, Canada will enter what some are heralding as geothermal’s golden age.

Naomi Buck is a Toronto-based writer.

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