Geothermal Financing—too hot to handle? Difficulty getting private industry funding
Do hot rocks and cold water mix? In the world of financing new technologies, the answer is cautiously iffy. Geothermal energy has been around for ages, but harnessing the big bucks that could make it an everyday fact-of-life is proving an on-going struggle. Federal stimulus money chalked up $338 million to test new technology, but private investors are still proving to be reluctant to make large-scale investments in the field.
On the surface, um, make that below the surface, it would seem that geothermal energy is there for the taking. It's clean power that isn't interrupted by becalmed winds or dark of night; so what could make it too good to be true? Earthquakes.
Most geothermal systems pump cold water down into the earth where it absorbs heat. And when the now-hot water returns to the surface, it turns to steam and powers a turbine-powered electrical generator. But when this system is put into operation, unpredictable things have occurred. In just one of the many disturbing examples, in 2007 this technology was blamed with causing a 3.4 magnitude earthquake in Switzerland that resulted in $8.4 million USD in damage. These incidents haven't as yet caused an industry cave-in. But what they have done is cause nearly all private investors to avoid making further investments in geothermal energy research. It seems that until the technological challenges as well as the liability issues are addressed, geothermal energy research will be reliant on government funding.