IR: There are three more new age renewables that are skirting the fringes of the conversation. Geothermal, tidal, and biomass. Each has their pros and cons, but are seeing inroads in particular cases in the UK and Europe. I asked Harold for a brief overview of each.
HH: Geothermal energy refers to heat below the Earth's surface. Now that can be heat just a few meters below the Earth's surface, or it could be many kilometers below the Earth's surface. Usually in energy economics, when we're talking about geothermal energy, we're referring to the heat deep down in the Earth, rather than the near-surface heat.
And that deep heat, ultimately, is coming from one of two sources. Firstly, the decay of radioactive elements in the Earth's crust. And secondly, heat that is seeping slowly through from the very core at the centre of the Earth itself. One of the pushbacks against geothermal is, frankly, that it is most suited to some specific geographic situations, most clearly in Iceland, for example, when you're close to tectonic plates.
So geothermal is not evenly distributed across the earth in terms of its capability.
IR: What are some of the pros of geothermal as an alternative energy source?
HH: The first that is often overlooked but does get talked about here in Northern Europe is the following. At the end of the day, solar, wind, and hydro are all derived from the sun, either directly in the case of solar, obviously, or indirectly in the case of the others.
Either by air temperature and wind movements or the water cycle itself in the case of hydro. Now that's all very good, but geothermal offers a complete diversification and that's its first advantage. The source of the energy is from the earth itself, as long as you do not extract the heat faster than it is naturally seeping out from the earth's core, geothermal will last for hundreds, if not thousands of years.
The second advantage of geothermal is that when it's harvested, in principle, it's reliable and available. All year round. Often people talk about the intermediacy of wind, solar, and even hydro assets. So you don't have that with geothermal. Geothermal heat can be used for one of two things. It can be used for heating itself, buildings, homes.
Or it can be converted into a traditional steam turbine for electricity generation. And in a country like Iceland, which uses geothermal a lot, it can be used for both. Maybe the last advantage I would point to of geothermal is it can help in some countries bring a high degree of energy independence, and obviously this is something that is being talked about a lot now in Northern Europe, given some supply issues with Russian gas.
And to give an example of this, let's go back to Iceland, which basically generates over 25 percent of its electricity from these geothermal sources. So it is a meaningful technology in some contexts.
IR: As part of the geothermal extraction process, there must be things like drilling, et cetera, that aren't environmentally friendly.
Does that outweigh the sustainability of the source?
HH: Look, let's take a holistic sustainability perspective. And compared geothermal electricity with, for example, electricity generated by oil or gas. Both are leaving a negative environmental footprint, if we want to call it that, through their mining activities associated with the generation of the electricity.
But, for example, relatively, geothermal stacks up pretty well because at least you're adding positively to the environmental card because you're not generating CO2 at the moment of combustion.
IR: So, a place like Iceland has a unique geography that allows it to take advantage of geothermal power, but is it like hydrogen exportable to other parts of the world?
HH: Given that we have high voltage direct current transmission lines between countries in Northern Europe, just because, let's say, Iceland is favorable to geothermal production doesn't mean to say you can't have that in Great Britain, for example. In fact, although there is no high voltage line today between Iceland and the UK, there are development proposals for just such a line.
The reality is we can't have geothermal all over the world in all places, but we can possibly have it in more places than what we think about using the big transmission lines.