Could hot water from the Earth's core be the key to our energy needs? | Transforming Business

Almost 60 meters high for holes that will be more than 3 kilometers deep. Welcome to geothermal energy garnered from the earth's depths. Local and stable, interest is growing in Germany as a potential to help industries overcome the country's high energy prices and decarbonize at the same time. But is it really an option for Europe's biggest economy and beyond? In 2022, before the Russian invasion of Ukraine, this is what Europe's energy mix looked like. Natural gas made up just over a fifth of the continent's energy mix. And more than 40 percent of that came from Russia. In 2024, gas from Russia made up just under 20 percent of all gas in Europe's energy mix. But the difficulty in access to gas has taken a toll on European electricity prices. And despite them now falling, Germany still has some of the highest industrial prices when compared with the European Union average and the United States. Given that and the pressure to decarbonize, companies in the country are looking at their options. They also have to. Germany aims to be greenhouse gas neutral by 2045, a date enshrined in the country's Climate Change Act. Based in Germany, BASF is the world's largest chemicals producer, with revenues of more than 68 billion dollars, followed by chemical companies Lyondell-Basel, Linde, Hengly and Mitsubishi. So what does it produce? You would know that basically from washing detergents, from cleaning detergents, all different sorts of car coatings, agricultural products. Tilman Hetzel has been working at BASF for 26 years and is responsible for infrastructure at the company's headquarters. BASF is among the 100 biggest historical emitters, meaning the companies that have produced the most pollution since industrialization. That's according to the Carbon Majors report produced by data platform InfluenceMap. In 2023, it says BASF produced around 50 megatons of CO2 equivalent, almost the same as the whole of Greece. For the chemical processes, energy is a key element. We use about 50 million tons of steam every year here at the Lütwisshafen site. And half of that steam we gain from chemical processes, so exothermic chemical processes, and the other half of the steam we need, we produce basically in our natural gas-fired power plant. That's right, gas, a dirty fuel. Due to legal constraints, BASF wants to replace the gas it uses to produce half of its steam with renewables, part of that with geothermal energy. So what exactly is that? Geothermal energy relies on the planet's natural heat. Drilling beneath the Earth's crust, companies can access that heat using pipes, which pump hot water from the underground reservoirs and cold water back down into the Earth in a closed-circuit system. The steam can also be used to generate electricity. Geothermal energy has been around forever. Think about the heat in Roman baths, for example, or the geysers in Iceland. But currently it accounts for less than 1% of the global electricity mix. One of the major problems is location. Traditionally, energy could only be harvested from the most active geothermal areas found in certain regions of the world close to tectonic plates. But newer technology, which does not need underground reservoirs, can tap into the Earth's heat. With more energy potential, the deeper is drilled, as you can see on these maps, making geothermal energy possible all over the world. We'll come back to that later. Another turn-off for businesses has been the high startup costs associated with this type of energy. Exploration and drilling cost time and money. From a price perspective, you're looking at a cost of production that potentially wasn't as good as gas. That's Chris Moreno, who leads geothermal venture Vulcan Energy, the company partnering with BASF in their new energy ambitions. His company has also come up with a novel way to offset the initial costs. Effectively, you're able to subsidise the cost of energy because we've got the lithium inside the brine. Brine is the hot water brought up from the depths of the Earth, and lithium is a sought-after element used in batteries for electric cars. Vulcan Energy extracts lithium from the brine and processes it for use in the batteries. So you have a win-win, which is actually quite unique. We're in Innsheim at a Vulcan Energy geothermal plant. The partnership with BASF is still in its early days, but Vulcan has already proven how the technology can work. Here at its geothermal power plant, it provides around 6,500 homes in the region with carbon-neutral electricity. But where the technology really stands out is in the production of heat, and not only for homes. BASF plans to use it for its processes. Where geothermal can play a really big part is how they decarbonise heat, but also make it cost-effective. While costs for installing geothermal are still relatively high, the International Energy Agency estimates that with policy and innovation support, they could fall by around 80% by 2035, making the energy competitive with renewables like wind and solar. And for BASF, its big advantage is its consistency. It is constantly available as well, so it is baseload heat for us. It does not depend on daylight or winter and summer. Companies like Daimler Truck and automotive giant Stellantis are also exploring the upsides of geothermal. It's not just in Europe that geothermal energy is becoming popular. The United States is the biggest producer of geothermal energy, followed by Indonesia, Turkey, the Philippines and New Zealand. And interest in the U.S. is growing for a very specific reason. Here in the U.S., at least, we've been in a period of reasonably flat electricity growth for the past 20 or 30 years. On a year-by-year basis, it might go up or down a little bit, but on the whole, we haven't seen major increases in demand for electricity. That's changing with this growth in data centers. That's Ben King. He's researched the potential for geothermal in meeting data center electricity demand for the Rhodium Group, an independent research provider. It's part of the fun, right? Yeah. Currently, data centers account for around 5% of U.S. power demand, a figure that's projected to more than double by the end of the decade with the advent of artificial intelligence. Tech giants like Meta, owner of social media platforms Facebook, WhatsApp and Instagram, and also search engine Google, are looking at geothermal energy to try to meet the growth in demand. And in just five years, both companies aim to achieve net zero emissions. Remember we talked earlier about how geothermal energy relies on deep underwater reservoirs? That had been popular in the U.S., but now there are newer technologies, enhanced geothermal systems or EGS, making geothermal possible in more locations. With EGS, you're able to actually create your own heat under the earth. So you drill down, hydraulically fracture the rock so that you're able to expose water or another fluid to the heat that's at that level. And then that water or fluid comes back up to the surface. So you're not reliant on the specific places where those hydrothermal approaches have worked in the past. You're actually able to do this in a lot more places. This approach is giving geothermal energy a huge