Why Geothermal?
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Geothermal energy is an internationally recognized clean, sustainable and renewable source of affordable heat and power. It is obtained by pulling hot water from deep below the earth’s surface and running it through a turbine to produce electricity with low or no emissions. After the hot water is used to make clean electricity, and before the water is reinjected, the remaining heat can be used for a variety of commercial, industrial, or entrepreneurial endeavours, including fish farming, greenhouse heating, district heating, pasteurization, material drying and snow melting. The experience of countries around the world shows us the great potential of geothermal heat and power. With legislative and regulatory support, we can harness the potential of geothermal here in Canada, and use it to create reliable green energy, jobs, and economic prosperity.
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Schematic of a Hydrothermal Binary Power Plant (Source: Augustine et al. Guidebook to Geothermal Power Finance. 2012)
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We send this letter to your MP on your behalf:
Dear Elected Official,
As a voter in your constituency, I’m contacting you to bring Canada’s tremendous untapped geothermal potential to your attention and advocate for its use. Geothermal energy is the Earth’s own internal heat and is incredibly versatile. Some examples of its uses include greenhouse agriculture, refrigeration, space heating, tourism, and electrical generation. While particularly visible in the western Provinces and the Yukon, geothermal resources are found throughout all of Canada. With this renewable form of no-carbon energy, we can use Canadian expertise in sub-surface resource development to create sustainable and permanent jobs for Canada’s net-zero carbon economy.
There is now a critical opportunity to expand our country’s green energy and economic growth in order to meet the Federal goal of net-zero emissions by 2050. Geothermal energy is baseload and can heavily contribute to reducing Canada’s greenhouse gas (GHG) emissions. In order to accomplish this, more action is needed to help level the playing field for no-carbon geothermal developers.
In addition to the changes needed Federally, the Provinces and Territories can also play an important role in helping to level the playing field for the geothermal industry. Local no-carbon geothermal developers need robust Provincial/Territorial regulatory frameworks, as well as direct support matching that which other renewable energy sources such as wind and solar, and low-carbon energy solutions receive. I strongly encourage Provincial and Territorial representatives reading this letter to contact the Canadian Geothermal Energy Association (CanGEA) for further details on the specific policy needs of no-carbon geothermal developers in your area.
CanGEA has identified the following points as key ways for the Federal Government to support geothermal development in Canada:
1. That the Government of Canada provide the same tax incentives offered to CCUS, wind and solar projects to no-carbon geothermal projects.
Geothermal was one of the few energy sources excluded from a 30% capital cost return in Canada’s Investment Tax Credit for Clean Technologies (ITC). This is far behind the initiative of other countries, such as the United States who just included geothermal energy in their Inflation Reduction Act for the same 30% capital cost return to project developers.
The 2022 Canadian Federal Budget established a refundable investment tax credit exclusively for Carbon Capture, Utilization and Storage (CCUS) projects. This incentive joins the growing list of benefits offered to CCUS projects. While CanGEA applauds these decarbonization efforts, we recommend that the government extend tax credits, and other incentives, to other carbon-reducing initiatives, like no-carbon geothermal. The absence of identical tax credits for no-carbon geothermal projects, which effectively achieve the same if not better results in reducing carbon emissions than CCUS, exemplifies the barriers underlying the wide-spread development of no-carbon geothermal energy. The exclusivity of CCUS incentives send the message that the Canadian government is more willing to support the industries that capitalized on contributing to the climate crisis, than they are innovative renewable energy solutions that would transform Canada’s energy supply and climate trajectory.
2. That the Government of Canada can help grow the geothermal industry by offering customer connections and financial support
The diversification of Canada’s heating sources is one of the most effective, efficient, and economical methods to decarbonize and curb the impending threat of GHG emissions. Industrial, commercial, and residential heating comprise one of the largest GHG emitting sectors globally. Around the world, countries are adopting geothermal district heating systems as core solutions in their long-term plans to lower GHG emissions. According to the European Geothermal Energy Council, “Most European countries are seeking to significantly expand their use of this renewable resource as they pursue policies to decarbonize heating and cooling.”[1] Federal and Provincial governments across Canada have adopted the carbon tax as a means to create an incentive for consumers to seek out alternative low or no-carbon energy solutions by making carbon-intensive fuels more expensive. However, these efforts have been undermined by the lack of access to affordable low and no-carbon alternatives to choose from.
In order to increase the availability of low and no-carbon energy alternatives to Canadians and help launch the geothermal industry, the Federal Government should develop programs and incentives for geothermal heat projects and customer connections. A customer connection incentive for geothermal district heating projects will support the transition to no-carbon heating solutions. These types of incentives are consistent with the Canada Green Buildings Strategy and the Canada Greener Homes Loan Program. The significant capital and installation costs, and associated expenses required to convert existing emissions-intensive heating systems to no-carbon district heating connections impede families, communities, businesses, and industries from making these essential changes without sufficient financial support from the Government. The financial burdens of converting traditional heating systems to a no-carbon district energy system necessitate bold government action to support and accelerate these efforts.
3. That the Government of Canada create a geothermal risk reduction program to help mobilize risk capital towards exploratory and production geothermal well drilling.
Geothermal drilling risk reduction programs have a proven record for increasing project developments globally. Developing a geothermal drilling risk reduction program in Canada will help mobilize risk capital and accelerate the development of Canada’s geothermal energy industry. CanGEA recommends a 2-stage geothermal risk reduction program comprised of a cost-sharing exploratory drilling program, and a geothermal resource risk insurance regime. These would greatly benefit the future of Canada’s geothermal energy industry, and the government’s net-zero ambitions.
For the Government of Canada’s consideration, CanGEA has already completed a comprehensive proposal of the 2-stage geothermal risk reduction program. We would be happy to present this proposal and continue discussions with the government on this initiative.
4. The Limitation of Offset Credit Procurement to the Energy System
In response to Canada’s Options to Cap and Cut Oil and Gas Sector Greenhouse Gas Emissions to Achieve 2030 Goals and Net-Zero by 2050, we recommend that the Federal Government limit the acquiring of offsets to the energy system.[2] We anticipate the following benefits should this occur:
First, demand for offset credits is expected to increase as the overall emissions cap is reduced. As demand increases, we will see a significant rise in activity in the renewable sector since implementing renewable energy alternatives would be the only way to acquire offset credits. As large emitters seek to find cleaner and non-emitting ways to conduct their daily business operations, they will be forced to integrate renewable alternatives into their operations. As a result, there will be increased cash flows to the renewable energy sector. This will lead to renewable energy companies having increased funds that they can then spend on new projects.
Second, and in the interest of the Federal Government, is the hastening of Canada’s transition to net-zero. As a consequence of increased cash flows to the renewable and non-emitting energy sector, more renewable energy projects will be undertaken. As more projects come to completion, there will be an overall increase in the supply of efficient, non-emitting and renewable energy alternatives. This increase in supply will both reduce overall prices for users as well as increase the stability of Canada’s energy supply. An abundance of supply, and its accompanied fair prices, is critical to the achievement, and maintenance, of a net-zero Canada.
5. That the Government of Canada provide funding for CanGEA to scale up its geothermal energy literacy pilot into a Pan-Canadian initiative.
A well-informed populace is key to moving forward with the development of renewable energy projects and to meet Canada’s GHG reduction goals. Federal support for renewable energy literacy workshops and a geothermal energy strategy, similar to provincial, territorial, and federal hydrogen and minerals strategies, will go a long way in helping Canadians understand alternative no-carbon solutions to mitigate climate change.
These recommendations will help promote the development of clean, reliable, and affordable no-carbon geothermal energy development in Canada. Climate change mitigation and clean growth are both better served by increased government support for geothermal heat and electricity.
With the utmost necessity to reach our 2050 climate goals in mind, the above measure is in the interest of Canada. While CanGEA advocates for the interests of the geothermal industry, we know that a net-zero Canada will be energy diverse. As such, the above recommendation will hasten the growth of all forms of renewable and non-emitting energy alternatives; not just geothermal.
6. That the Government of Canada can adopt a renewable geothermal heating portfolio standard in all 887 Government of Canada federal buildings.
Currently, the Government of Canada emits roughly 370 kilotonnes of CO2 operationally, and an investment in no-carbon geothermal heating can significantly reduce these emissions. CanGEA has developed a proposal called “Greening of the Government of Canada Federal Buildings through Geothermal Heat”. CanGEA’s proposal seeks to generate more geothermal opportunities, reduce GHGs, and further rural economic development and job creation. This project would pursue these goals by developing a comprehensive white paper that details the benefits of adopting a Renewable Heating Portfolio Standard.
The “Greening of Federal Buildings with Geothermal Heat” white paper will give the federal government information and tools to create an innovative program to support geothermal heat projects across Canada, where the resources exist. This will help reduce the Government of Canada’s 11.2 million GJ/yr natural gas reliance, either directly or through renewable heat credits; this is equivalent to taking 124,500 homes/year off of fossil fuels.
This recommendation is consistent with initiatives seen in the United States to decarbonize federal facilities. The U.S. Department of Energy has invested $6-million to help expand the deployment of geothermal heating and cooling systems at federal sites. “Geothermal heating and cooling is renewable, versatile, and critical to decarbonizing buildings as well as the economy as a whole,” says U.S. Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy Kelly Speakes-Backman. “Scaling up deployment of geothermal heating and cooling technology on federal sites will help reduce costs and energy demand, ultimately saving taxpayer dollars and leading by example to decarbonize our economy.”[3]
For the Government of Canada’s consideration, CanGEA has already completed a comprehensive proposal of the “Greening of the Government of Canada Federal Buildings through Geothermal Heat” program. We would be happy to present this proposal and continue discussions with the government on this initiative.
Sincerely,
Your name.
[1] European Geothermal Energy Council. (June 2021). Geothermal Market Report, Ed. Thomas Garabetian et al., Tenth Edition, p.8 – as of 2020
[2] Options To Cap and Cut Oil and Gas Sector Emissions- Government of Canada
[3] Office of Energy Efficiency & Renewable Energy. (June 3, 2022). DOE Invests $6 Million in Geothermal Heating and Cooling Technologies at Federal Facilities.
As a voter in your constituency, I’m contacting you to bring Canada’s tremendous untapped geothermal potential to your attention and advocate for its use. Geothermal energy is the Earth’s own internal heat and is incredibly versatile. Some examples of its uses include greenhouse agriculture, refrigeration, space heating, tourism, and electrical generation. While particularly visible in the western Provinces and the Yukon, geothermal resources are found throughout all of Canada. With this renewable form of no-carbon energy, we can use Canadian expertise in sub-surface resource development to create sustainable and permanent jobs for Canada’s net-zero carbon economy.
There is now a critical opportunity to expand our country’s green energy and economic growth in order to meet the Federal goal of net-zero emissions by 2050. Geothermal energy is baseload and can heavily contribute to reducing Canada’s greenhouse gas (GHG) emissions. In order to accomplish this, more action is needed to help level the playing field for no-carbon geothermal developers.
In addition to the changes needed Federally, the Provinces and Territories can also play an important role in helping to level the playing field for the geothermal industry. Local no-carbon geothermal developers need robust Provincial/Territorial regulatory frameworks, as well as direct support matching that which other renewable energy sources such as wind and solar, and low-carbon energy solutions receive. I strongly encourage Provincial and Territorial representatives reading this letter to contact the Canadian Geothermal Energy Association (CanGEA) for further details on the specific policy needs of no-carbon geothermal developers in your area.
CanGEA has identified the following points as key ways for the Federal Government to support geothermal development in Canada:
1. That the Government of Canada provide the same tax incentives offered to CCUS, wind and solar projects to no-carbon geothermal projects.
Geothermal was one of the few energy sources excluded from a 30% capital cost return in Canada’s Investment Tax Credit for Clean Technologies (ITC). This is far behind the initiative of other countries, such as the United States who just included geothermal energy in their Inflation Reduction Act for the same 30% capital cost return to project developers.
The 2022 Canadian Federal Budget established a refundable investment tax credit exclusively for Carbon Capture, Utilization and Storage (CCUS) projects. This incentive joins the growing list of benefits offered to CCUS projects. While CanGEA applauds these decarbonization efforts, we recommend that the government extend tax credits, and other incentives, to other carbon-reducing initiatives, like no-carbon geothermal. The absence of identical tax credits for no-carbon geothermal projects, which effectively achieve the same if not better results in reducing carbon emissions than CCUS, exemplifies the barriers underlying the wide-spread development of no-carbon geothermal energy. The exclusivity of CCUS incentives send the message that the Canadian government is more willing to support the industries that capitalized on contributing to the climate crisis, than they are innovative renewable energy solutions that would transform Canada’s energy supply and climate trajectory.
2. That the Government of Canada can help grow the geothermal industry by offering customer connections and financial support
The diversification of Canada’s heating sources is one of the most effective, efficient, and economical methods to decarbonize and curb the impending threat of GHG emissions. Industrial, commercial, and residential heating comprise one of the largest GHG emitting sectors globally. Around the world, countries are adopting geothermal district heating systems as core solutions in their long-term plans to lower GHG emissions. According to the European Geothermal Energy Council, “Most European countries are seeking to significantly expand their use of this renewable resource as they pursue policies to decarbonize heating and cooling.”[1] Federal and Provincial governments across Canada have adopted the carbon tax as a means to create an incentive for consumers to seek out alternative low or no-carbon energy solutions by making carbon-intensive fuels more expensive. However, these efforts have been undermined by the lack of access to affordable low and no-carbon alternatives to choose from.
In order to increase the availability of low and no-carbon energy alternatives to Canadians and help launch the geothermal industry, the Federal Government should develop programs and incentives for geothermal heat projects and customer connections. A customer connection incentive for geothermal district heating projects will support the transition to no-carbon heating solutions. These types of incentives are consistent with the Canada Green Buildings Strategy and the Canada Greener Homes Loan Program. The significant capital and installation costs, and associated expenses required to convert existing emissions-intensive heating systems to no-carbon district heating connections impede families, communities, businesses, and industries from making these essential changes without sufficient financial support from the Government. The financial burdens of converting traditional heating systems to a no-carbon district energy system necessitate bold government action to support and accelerate these efforts.
3. That the Government of Canada create a geothermal risk reduction program to help mobilize risk capital towards exploratory and production geothermal well drilling.
Geothermal drilling risk reduction programs have a proven record for increasing project developments globally. Developing a geothermal drilling risk reduction program in Canada will help mobilize risk capital and accelerate the development of Canada’s geothermal energy industry. CanGEA recommends a 2-stage geothermal risk reduction program comprised of a cost-sharing exploratory drilling program, and a geothermal resource risk insurance regime. These would greatly benefit the future of Canada’s geothermal energy industry, and the government’s net-zero ambitions.
For the Government of Canada’s consideration, CanGEA has already completed a comprehensive proposal of the 2-stage geothermal risk reduction program. We would be happy to present this proposal and continue discussions with the government on this initiative.
4. The Limitation of Offset Credit Procurement to the Energy System
In response to Canada’s Options to Cap and Cut Oil and Gas Sector Greenhouse Gas Emissions to Achieve 2030 Goals and Net-Zero by 2050, we recommend that the Federal Government limit the acquiring of offsets to the energy system.[2] We anticipate the following benefits should this occur:
First, demand for offset credits is expected to increase as the overall emissions cap is reduced. As demand increases, we will see a significant rise in activity in the renewable sector since implementing renewable energy alternatives would be the only way to acquire offset credits. As large emitters seek to find cleaner and non-emitting ways to conduct their daily business operations, they will be forced to integrate renewable alternatives into their operations. As a result, there will be increased cash flows to the renewable energy sector. This will lead to renewable energy companies having increased funds that they can then spend on new projects.
Second, and in the interest of the Federal Government, is the hastening of Canada’s transition to net-zero. As a consequence of increased cash flows to the renewable and non-emitting energy sector, more renewable energy projects will be undertaken. As more projects come to completion, there will be an overall increase in the supply of efficient, non-emitting and renewable energy alternatives. This increase in supply will both reduce overall prices for users as well as increase the stability of Canada’s energy supply. An abundance of supply, and its accompanied fair prices, is critical to the achievement, and maintenance, of a net-zero Canada.
5. That the Government of Canada provide funding for CanGEA to scale up its geothermal energy literacy pilot into a Pan-Canadian initiative.
A well-informed populace is key to moving forward with the development of renewable energy projects and to meet Canada’s GHG reduction goals. Federal support for renewable energy literacy workshops and a geothermal energy strategy, similar to provincial, territorial, and federal hydrogen and minerals strategies, will go a long way in helping Canadians understand alternative no-carbon solutions to mitigate climate change.
These recommendations will help promote the development of clean, reliable, and affordable no-carbon geothermal energy development in Canada. Climate change mitigation and clean growth are both better served by increased government support for geothermal heat and electricity.
With the utmost necessity to reach our 2050 climate goals in mind, the above measure is in the interest of Canada. While CanGEA advocates for the interests of the geothermal industry, we know that a net-zero Canada will be energy diverse. As such, the above recommendation will hasten the growth of all forms of renewable and non-emitting energy alternatives; not just geothermal.
6. That the Government of Canada can adopt a renewable geothermal heating portfolio standard in all 887 Government of Canada federal buildings.
Currently, the Government of Canada emits roughly 370 kilotonnes of CO2 operationally, and an investment in no-carbon geothermal heating can significantly reduce these emissions. CanGEA has developed a proposal called “Greening of the Government of Canada Federal Buildings through Geothermal Heat”. CanGEA’s proposal seeks to generate more geothermal opportunities, reduce GHGs, and further rural economic development and job creation. This project would pursue these goals by developing a comprehensive white paper that details the benefits of adopting a Renewable Heating Portfolio Standard.
The “Greening of Federal Buildings with Geothermal Heat” white paper will give the federal government information and tools to create an innovative program to support geothermal heat projects across Canada, where the resources exist. This will help reduce the Government of Canada’s 11.2 million GJ/yr natural gas reliance, either directly or through renewable heat credits; this is equivalent to taking 124,500 homes/year off of fossil fuels.
This recommendation is consistent with initiatives seen in the United States to decarbonize federal facilities. The U.S. Department of Energy has invested $6-million to help expand the deployment of geothermal heating and cooling systems at federal sites. “Geothermal heating and cooling is renewable, versatile, and critical to decarbonizing buildings as well as the economy as a whole,” says U.S. Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy Kelly Speakes-Backman. “Scaling up deployment of geothermal heating and cooling technology on federal sites will help reduce costs and energy demand, ultimately saving taxpayer dollars and leading by example to decarbonize our economy.”[3]
For the Government of Canada’s consideration, CanGEA has already completed a comprehensive proposal of the “Greening of the Government of Canada Federal Buildings through Geothermal Heat” program. We would be happy to present this proposal and continue discussions with the government on this initiative.
Sincerely,
Your name.
[1] European Geothermal Energy Council. (June 2021). Geothermal Market Report, Ed. Thomas Garabetian et al., Tenth Edition, p.8 – as of 2020
[2] Options To Cap and Cut Oil and Gas Sector Emissions- Government of Canada
[3] Office of Energy Efficiency & Renewable Energy. (June 3, 2022). DOE Invests $6 Million in Geothermal Heating and Cooling Technologies at Federal Facilities.
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powEARTHful is a public engagement initiative of the Canadian Geothermal Energy Association (CanGEA). CanGEA is the collective voice of Canada’s geothermal energy industry. As a non-profit association, we engage in advocacy and public outreach efforts that promote the exploration and development of geothermal resources in Canada. Geothermal energy can provide competitively priced, renewable, round-the-clock energy in Canada.
Be part of the change. Be powEARTHful.
Copyright © 2023, CanGEA.
Be part of the change. Be powEARTHful.
Copyright © 2023, CanGEA.
