BP and Chevron have become part-owners of Eavor, the Canadian start-up that offers unlimited, on-demand renewable energy anywhere in the world through an innovative deep-geothermal solution.

The two oil majors were among six strategic investors who took part in a $40m funding round, and both are now likely to further assist Eavor financially and practically as the company builds out its first commercial projects.

“We see Eavor’s potential to be complementary to our growing wind and solar portfolios,” said Felipe Arbelaez, BP’s senior vice-president for zero-carbon energy. “Our expertise and experience also makes BP well equipped to support Eavor’s growth.”

Eavor has invented a method of turning sub-surface heat from the Earth’s core into unlimited renewable energy, without the need to discover underground hot-water reservoirs (like conventional geothermal power), or to use huge amounts of energy to pump injected water to the surface (like so-called low-enthalpy geothermal energy).

In simple terms, Eavor creates a gigantic underground radiator using vertical and horizontal drilling techniques perfected in recent years by the oil & gas industry. It creates eight-inch-wide (20cm) tunnels that go 3-5km deep before making a 90 degree turn and running for a few kilometres horizontally, before making a sharp turn and doubling back on itself and looping back to the surface.

The tunnel is then filled with a water-based working fluid, which is then heated by the underground rocks as it moves, driving an electricity-generating organic Rankine cycle turbine on the surface. The heat generated can also be sold to industry or for district heating.

The dry geothermal well in Geretsried, southern Germany, owned by Enex, which looks set to be Eavor's first commercial-scale project. Photo: Enex

The beauty of this “Eavor-Loop” solution is that this cycle essentially powers itself due to thermodynamics, with cold water pushing less-dense hot water towards the surface, causing the fluid to circulate without the need for a pump — a phenomenon known as a thermosiphon. And the more loops that a system has, the greater the amount of energy produced.

By adjusting the pressure within these closed loops, the amount of electricity generated can be reduced or increased, so the technology is both baseload and dispatchable like a natural-gas or coal-fired power plant, but with zero emissions. It could thus provide back-up energy in terms of low wind and solar power, like a gas peaker plant, or work around the clock at full power, much like a baseload gas-fired power station.

Eavor has already proved that its technology works at a pilot project in Alberta, Canada, known as Eavor-Lite.

Michael Liebreich, the founder of Bloomberg New Energy Finance, who is chairman of Eavor's advisory board, told Recharge last year: “It would be as pretty damn close to the holy grail as you can get... if it can be done at an affordable price. Affordable clean load-following power is the missing link in lots of markets. It has the potential to change the world.”

The technology has sparked so much interest that the Calgary-based company is now in discussions to build scores of commercial projects around the world — from Europe, North America and Asia to the Caribbean, South Pacific and even the Antarctic, Eavor chief executive John Redfern tells Recharge.

“Hell, we even got a lead in Bhutan for a heat project… and we got a lead in Antarctica, [at] one of the research stations.”

Eavor’s first commercial plant is set to be in Geretsried, Germany, at the site of a dry geothermal well. The initial 10MW project seems likely to go ahead, despite a final investment decision not due to be made until the third quarter of this year, with drilling due to begin next January, explains Redfern.

“To get drilling in the ground come January 2022, we’ve got to start ordering stuff now and making millions of dollars of expenditure this year.”

Eavor CEO John Redfern. Photo: Eavor

He adds that the financing is already lined up if the company receives a particular grant from the EU.

“If that comes through, then we’ve got everything ready to go. If it doesn’t come through, we’ve got some alternative ways of financing.”

The Geretsried site could later be scaled up to 200MW by simply drilling more Eavor-Loops underground, at an estimated cost of more than €2.4bn ($2.9bn).

Redfern admits that this sounds expensive, “but the price you get for the offtake — both the heat and the power — makes it worthwhile”.

In Germany, dispatchable geothermal energy receives more than €200 per MWh under the country’s Renewable Energy Sources Act. This is why Germany is the number-one market for Eavor, which has already lined up about 50 potential projects in the country.

Sites with dry geothermal wells — where developers had already received permission to build facilities and already investigated the local geology — are prime sites for Eavor.

While individual Eavor projects will each be funded separately through their own project-development companies, the company also plans to set up a billion-dollar-plus fund called Eavor Green to help finance multiple facilities around the world.

“People may not necessarily want to invest in that particular Eavor-Loop right there, but the idea is that there's going to be a curated list to fund 20% in all of them or something like that,” explained Redfern.

The $40m in Eavor’s latest funding round came from six investment companies: BP Ventures, Chevron Technology Ventures, Temasek, BDC Capital, Eversource and Vickers Venture Partners.

The money will be used for research and development — particularly for field trials on drilling into deep, hot igneous rocks — as well as general business development, namely feasibility studies and preparing projects to the point where drilling can begin.

The above-ground facilities at the Eavor-Lite pilot project in Alberta, Canada. Photo: Eavor

But reading between the lines, Redfern seems more interested in the resources that BP and Chevron can bring to the Eavor table.

“Obviously, we bring a few unique technologies to the table and some modeling software and some optimisation techniques, but most of what's done in implementing [the Eavor-Loop] is pretty generic drilling. So we want the BPs and Chevrons of this world to come in and do what they do best, which is to implement and scale up big projects… to anticipate and absorb the sub-surface risk — a little over budget here, a little under budget there. They’re good at doing that sort of thing.

“They also have very large data sets that show what the world looks like in the sub-surface around the globe. We’re assuming that each one of these strategic partners will be able to bring their own set of opportunities once they know exactly what to look for.”

He adds that with oil & gas exploration and production in long-term decline, individuals within the hydrocarbons sector are excited that their geological and drilling skills can be put to use for large-scale zero-emissions energy.

“I'm not sure who's more excited, the actual companies themselves or the employees,” says Redfern. “They're getting slaughtered on the oil & gas side. And the people, you know, in places like Calgary or Houston who are unemployed as geophysicists, drilling engineers, etc, they look at this and they really do seriously hope it can scale.”