All of the suppliers who are normally digging for oil are now eager for new business. Energy Information Administration revised its short-term outlook for crude oil production, predicting a steep decline through 2021. They’re getting pummeled by the largest oil price crash in decades, the result of plunging demand due to the pandemic and a glut in supply because of a price war between Saudi Arabia and Russia. That’s because they are the same suppliers the oil industry uses, but oil companies are idling drilling rigs and cutting contracts left and right.
But now, the companies that supply the machinery and services for drilling are starting to slash rates. Plants generate electricity by pumping steam or hot water up from those reservoirs to spin a turbine which powers a generator.Įxperts told Grist that drilling can account for anywhere between 25 to 70 percent of the cost of a project, depending on where it is, the method of drilling, and the equipment required. Engineers have to drill thousands of feet into the ground to reach reservoirs of water and rock hotter than 300 degrees F in order for the plants to be economical. costs more than double that of a utility-scale solar farm.
The cost can range from $2,000 to $5,000 per installed kilowatt, and even the least expensive geothermal plant in the U.S. But compared to wind and solar farms, geothermal power plants are expensive to build. Unlike wind and the sun, subsurface heat is available 24/7, perpetually replenished by the radioactive decay of minerals deeper down. In a report released last year detailing the growth potential of geothermal energy, the Department of Energy called it “America’s untapped energy giant.” Geothermal energy comes from heat beneath the earth’s surface that we can tap into to generate electricity and to heat and cool our buildings. There’s another form of renewable energy, however, that might see a benefit from the recent global economic upheaval and emerge in a better position to help the United States decarbonize its electricity system: geothermal. Disruptions to supply chains and slowdowns in permitting and construction have delayed solar and wind projects, endangering their eligibility for the soon-to-expire investment tax credits they rely on.
The coronavirus pandemic has mostly yielded bad news for renewable energy.
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