Pembina Institute

Geothermal Energy: A no-brainer for Canada?

Geothermal energy generates about 10,000 megawatts of the world's electricity, enough to power 10 million homes. But in a world on fire, Sarah McLachlan and the folks at the Canadian Geothermal Energy Association would like to see this number increase dramatically. McLachlan lent her song of the same name to promote geothermal energy in Canada.

The association says Canada alone could generate 5,000 megawatts of geothermal generated electricity by tapping into already mapped heat sources of Earth energy. The association is hosting an annual conference and investment forum in September 2011 to promote the geothermal industry in Canada.

How much geothermal electricity is generated in Canada today? None, zip, nada! There are serious proposals, pilot projects and ideas, but so far none are producing electricity. 

Geological Survey reportThe Geological Survey of Canada released a report in June 2011 on the geothermal resource potential in Canada and found that the in-place potential for geothermal power could exceed one million times Canada's current electricity consumption. However, what will be produced depends on drilling technology, accessibility to transmission lines, and the desire of governments to see the resource developed.

Government policy and financial support has been weak for this industry as evidenced by the fact that Canadian companies - including four listed on the TSX - are building projects in the U.S. and abroad, but not in Canada. In fact, the Canadian Geothermal Energy Association says 27 per cent of the geothermal projects in the U.S. are being built, managed or financed by Canadian companies!

Just as it supports renewable energy much more than Canada, the U.S. government has created a much more favorable environment for this clean energy industry.

What's so cool about geothermal energy?

Geothermal energy is clean energy that produces almost no air emissions and has a very small footprint. It is produced at a constant rate, which means it can provide baseload power that can supplement other forms of renewable energy such as wind, solar or hydro.

Geothermal energy is scalable from a small one megawatt system that serves a small community to a large-scale project that could provide electricity and heat to an entire city.

Map of gepthermal resource in CanadaThe highest temperature geothermal resources are in British Columbia, Alberta, Northwest Territories and Yukon. Geothermal systems could be connected to local transmission lines and could provide an alternative to diesel-generated heat and electricity systems in small remote communities.

But as we learned in a report we prepared on geothermal energy for the Northwest Territories (NWT), the Canadian geothermal energy industry is still in its infancy. Despite the high potential for geothermal development, particularly in western Canada, there is no electrical production in Canada as of 2010. Electricity has been produced in the past during tests at the Meager Creek facility in British Columbia, but this 100 megawatt project Installed geothermal capacitywas stalled in 2010 and is still not producing energy. A pilot project for production of electricity and heat from oil and gas wells in Swan Hills, Alberta, is under development.

In spite of a lack of political leadership in Canada, interest in geothermal has started to emerge. The proposed Fort Liard Geothermal Demonstration project will provide one megawatt of electricity and one megawatt of heat to this community in the NWT. The project is a joint venture between the Acho Dene Koe First Nation and Borealis GeoPower. Together they qualified for $10 million to $20 million in funding from the Federal Clean Energy Fund.

A major project is proposed for Yellowknife, NWT. The proposed community energy system would produce 52,000 megawatts per year and heat 40 commercial buildings in downtYellowknife proposed geothermal project.own Yellowknife. This would offset the use of 7.5 million litres of heating oil per year. The City qualified for $14.1 million in federal support, but its residents would not approve borrowing the money necessary to get the project up and running. The City is working with a private developer and is presently seeking to confirm whether the federal support is still there. 

The many faces of geothermal energy

So far we have been talking about geothermal-generated electricity, but that is only part of the story. Geothermal heat can be used to produce electricity or it can simply be used to heat the places we live and work or the machines or processes that make things for us.

Geothermal resources are categorized by their temperature range. Throughout Canada, closer to the surface, we have low-temperature heat - 5 C to 12 C just below the surface of the ground - that can be extracted by heat exchangers or heat pumps, called geoexchange systems. Just like the heat pump that takes heat out of your fridge and pumps it into the air, heat pumps can also take low-temperature heat out of the ground and make your house toasty warm.

Geoexchange system under the patioMore than 30,000 geoexchange systems are installed in residences and 6,000 in businesses across Canada. A system generally costs $20,000 to $25,000 for a home but can pay for itself in 3 to 10 years.

The deeper the geothermal resource, the hotter the temperatures. High- and medium-temperature resources are used to generate electricity worldwide. Most electricity installations use geothermal temperatures between 100 and 200 C. However, as technology improves and costs go down, we can do more with our lower-quality resources. A project in Chena, Alaska uses water at only 73.3 C to produce electricity that has replaced their polluting and expensive diesel generators. This is the lowest-temperature geothermal electricity production in the world to date.

In addition to temperature, the geothermal resource must be accessible by drilling, and a fluid must be available to carry the heat to the surface. There are different ways to produce electricity depending upon the resource quality.

Geothermal costs low?

The reliability of geothermal energy is one of its best features. The capacity factor, or the reliability of energy production, for geothermal is up to 97 per cent, which is similar to nuclear. Yet it can also be much cheaper and safer to develop. One study in British Columbia put the cost of geothermal generated electricity at 5.09 cents per kilowatt-hour. This was compared to 32 cents for remote diesel, 7.7 cents for small hydro, and 10.88 cents for wind. One could wrestle over the numbers, but suffice to say geothermal energy could be quite competitive.

Time to turn up the heat with geothermal energy

There is a large role for provincial, territorial and the federal governments in helping to develop geothermal resources in Canada. There are many approaches, both fiscal and non-fiscal, that have proven successful in catalyzing Canadian industries, including clear regulations, research grants, renewable energy targets and more. A full national geothermal resource assessment is needed to help identify the best opportunities for geothermal energy projects in Canada. Similar resource assessments, which have been conducted in United States and Australia, can be used as a basis for regional or national planning exercises to identify the areas for the areas for potential development, the economic and environmental impacts of potential projects, and the highest-priority areas for development.

On paper you'd think geothermal energy would be a no-brainer for Canada. The resource exists, the environmental benefits are significant, the costs can be low, it works in remote locations and geothermal energy plays well with new clean-energy grids. Now is the time to turn up the heat on geothermal energy development in Canada.

Marianne Kostic — Jul 14, 2012 - 08:47 PM MT

We are big supporters of the "green movement" and for that reason we had a Geothermal Heating System installed in our house. It ended up to be a big disappointment. As we live at the water the "Geothermal Leader of Ontario" suggested the closed loop in the water.
The system was installed in summer 2010. In spring of 2011 with the ice melting the loop got destroyed. Luckily it was fixed/replaced at no cost to us. This year we had a mild March, the ice melted early and again our system broke down. Since then we have no heat (although it was bitter cold in April ), nor do we have airconditioning in this extreme hot weather. The "Geothermal Leader" does not seem to care !!!
My question is: how can companies advertise and sell you a system at high cost that is still in its "infant shoes" and does not seem to work. . Should the Government not be informed about this ?
Marianne Kostic

Tim Weis — Jul 17, 2012 - 06:32 PM MT

Sorry to hear that you had a bad experience with the company that installed your geothermal heat exchanger, Marianne.

What we suggest is contacting the Canadian Geoexchange Coalition (you can find them on the web at: to get some advice regarding accredited companies that have a good reputation for installing these types of systems in your region. It's likely that you'll be much happier with this heating option with a professional, accountable service. Unfortunately there really isn't a role for government in this situation. Sadly, there are limited options for these issues, though you can always try the Better Business Bureau, or, if necessary, a Canadian court.

Truth be told, this technology has actually been around for decades and is used all over the world with much success. You can get a lemon of a car, for example, but that doesn't mean the automobile is still in infant shoes.

Thanks for writing.

Tim — Director of Renewable Energy & Efficiency Policy for the Pembina Institute

Thomas — May 18, 2012 - 02:06 AM MT

The case of earthquakes involved enhanced geothermal technology in Basel. Enhanced geothermal involves fracking rock, whereas hydrothermal systems use existing fractures.

Daniel Eden — Aug 29, 2011 - 10:43 AM MT

Dear Peggy,

Thank you for posting this call-for-action article on geothermal energy. I am a recent graduate in civil engineering with a keen interest in renewable energy developments, and your post caught my eye.

I do, however, have a couple of questions that I would like for you to follow-up on, if possible.

- You mentioned at the beginning that 10,000 MW of geothermal energy is being produced worldwide, providing electricity for 10 million homes. Further along, you mention that a community project in Yellowknife could produce “52,000 MW per year and heat 40 commercial buildings”. The units don’t seem to make sense here. Did you mean 52,000 MWh per year? Or simply 52,000 MW? And if so, how can 52,000 MW only produce for 40 commercial buildings while 10,000 MW can produce for 10 million homes?

- You also mentioned that “Canada alone could generate 5,000 megawatts of geothermal generated electricity by tapping into already mapped heat sources of Earth energy”. So, I am guessing that the 52,000 megawatts of the Yellowknife project are not mapped?

- When discussing the costs of geothermal, you mention a study done in British Columbia. Could you source the study?

- Finally, I think it would be valuable to question the ultimate renewability of geothermal. How much effort is being put into evaluating the heat-transfer rate through solid rock at various depths and locations? David McKay makes a strong point of this in his book Sustainability Without the Hot Air ( on pages 96-100.

I am looking forward to your clarifications,

Best regards,


Ming — Jul 11, 2011 - 06:35 AM MT

You never mention about concerns that drilling for geothermal energy may cause earthquakes. I believe that at least one attempt to drill for geothermal energy had to be stopped because it lead to minor earthquakes

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