Canada warming up to geothermal energy, but still lags other countries

Mark Lowey
August 17, 2022

NOTE: This is part one of a two-part Research Money series on developing Canada’s geothermal energy resource. Part one focuses on “shallow” (less than five kilometres deep) projects, including government and private sector investment and innovation. Part two, to be published August 24, examines the potential for “deep enhanced geothermal” (five km deep or more).

Canada is finally waking up to geothermal energy and its potential for reducing greenhouse gas emissions although we still lag many countries in developing the underground resource, say industry leaders and researchers.

Natural Resources Canada (NRCan) has scaled up its funding support for geothermal projects during the last five years, in alignment with federal clean energy and climate goals, says André Bernier, director general, NRCan’s Electricity Resources Branch.

“One of our main motivators [for supporting geothermal] is to increase the supply of renewable energy, specifically renewable electricity,” Bernier said in an interview.

Along with the drive to decarbonize, there’s a lot of overlap between oil and natural gas development and geothermal energy, he said. Oil, gas and geothermal resources are often located in the same place, and there’s potential for using oil and gas wells and associated infrastructure for geothermal.

“We think of this [geothermal] as something that could build off the strength of those supply chains, but also — looking over the long term at pressures on the oil and gas sector — being something that can create opportunities for those supply chains to benefit and grow in a different direction,” Bernier said.

To date, NRCan has contributed a total of more than $109 million to a variety of geothermal projects in Canada (see table accompanying story). This includes funding from the Smart Renewables and Electrification Pathways initiative, a four-year, $964-million program supporting smart renewable energy and electrical grid modernization projects.

NRCan’s funding includes support for three cornerstone geothermal power projects, one each in British Columbia, Alberta, and Saskatchewan. The Western Sedimentary Basin area is underlain with highly porous rocks, such as sandstone and limestone, which allow oil, gas and geothermal brine (salty water) to be brought to the surface.

All three projects are defined as “shallow” (less than five kilometres below the surface) underground reservoirs, versus "deep", enhanced geothermal (five km or more below the surface).

The projects are: the Tu Deh-Kah project in northeast B.C.; Alberta No. 1 in northwest Alberta, and DEEP in southeast Saskatchewan.

“We see those three projects as ideally located, one in each province, so that we have a benchmark for regional challenges,” said Darlene Macy, senior policy advisor in NRCan’s Renewable and Electrical Energy Division.

Bernier noted that the three projects are in various stages of development, and none has yet reached commercial operation, although NRCan is considering support for more geothermal initiatives. “But we would proceed with more confidence once we see the results of that first big wave of projects.”

Ottawa, provinces lack cohesive geothermal strategy

Despite the increase in funding support, neither the federal government nor the provinces have a geothermal strategy that focuses on using this resource to address multiple problems, including social issues, said Alison Thompson, chair and co-founder of the Canadian Geothermal Energy Association, a not-for-profit organization promoting geothermal in Canada.

According to her, the real value-add of geothermal is producing heat that can be used for residential and industrial heating. “Making electricity is not the best use of the resource in Canada. We’ve skipped over just using heat for heat.”

That heat could replace heat generated by fossil fuels, which represent 70 percent of the country 's greenhouse gas emissions. Since the federal government has a declared goal of reducing these emissions, geothermal would help by replacing the burning of natural gas.

“If you want to take on the incumbent natural gas industry, you could be substituting a lot of natural gas heating and have a very deep greenhouse gas reduction," she said. “One of our problems here is we just have so many choices for fuel that we don’t really have the needed policy for doing something with geothermal."

Thompson, an engineer who worked in the oil and gas industry for several years, is also president and CEO of Borealis Geothermal. Her company and Kitselas Development Corp., owned by the Gits’llaasu (pronounced Kitselas) First Nation, have a formed a joint firm, called Kitselas Geothermal, to develop a multi-phase geothermal project near Terrace, B.C.

She added that supporting geothermal development strategically in targeted locales could address multiple issues in Canada, including:

  • use of polluting diesel-fuelled for power and space heating in northern Canada;
  • food security in the North (use geothermal heat to create a greenhouse industry, like in the Netherlands, the world’s No. 2 exporter of food — just behind the U.S.;
  • economic alternatives for struggling communities that once depended on coal mining;
  • partnerships that advance Indigenous reconciliation.

Canada needs a federal ministry that understands geothermal and all the things the industry can accomplish, including skills transfer and repurposing jobs, Thompson said.

The most environmentally friendly of environmentally friendly energy sources

After Canada's 10-year national geothermal program ended in 1985, says Stephen Grasby, the country fell behind others that have been developing this technology, such as the U.S., Indonesia, Philippines, Turkey, New Zealand, and Mexico.

“If we compare our geology and where the country sits, we’re the only country on the Pacific Ring of Fire that hasn’t developed geothermal yet. We see many countries that have,” said Grasby, president of Geothermal Canada (a non-profit working to advance geothermal energy) and a senior research scientist at the Geological Survey of Canada.

The Ring of Fire, a belt of intense seismic activity that runs beneath Pacific Rim countries, has one of the hottest underground temperatures and stores more than 40 per cent of the world’s geothermal resources.

Canada’s in-place potential geothermal power could exceed 1 million times the country’s current electricity consumption, according to a 2012 Geological Survey of Canada report, “Geothermal Energy Resource Potential of Canada.”

Grasby contrasted geothermal's dependable, always-available character with intermittent, renewable energy sources like wind and solar. Geothermal also is dispatchable, meaning it can be ramped up and down quickly to meet peak power demands. And compared with other renewables, geothermal has the smallest footprint on the landscape.

“It’s the most environmentally friendly of the environmentally friendly sources of power,” Grasby says.

Like Thompson, Grasby points to the advantages of geothermal for heating, since Canada's abundant hydropower has made the country's electricity grid one of the world's cleanest. Geothermal for heat rather than electricity also presents fewer risks.

“It’s harder to find the high-temperature waters underground that you need for electrical production, but much easier to find waters you need for heating buildings or industrial heat sources,” he said.

And there may be more potential than we already know, he added. Data gathered from Canada’s original geothermal program addressed only about 40 per cent of Canada. “So for 60 per cent of the country we probably can’t say much at all, other than we don’t really know.”

CanmetENERGY Ottawa is conducting laboratory research on the thermal and hydraulic properties of rocks and rock-fluid interactions, to help advance geothermal in Canada.

The biggest risk of geothermal is finding a source in the right reservoir and with sufficient temperatures that enable an economic project, Grasby said. And the only way of doing that is to drill an expensive, deep well.

“We need some more intense research efforts and collecting the geoscience information we need to reduce the exploration risk,” he said.

Project in Saskatchewan uses first-of-its-kind innovation

One of the three cornerstone geothermal projects that NRCan has invested in is DEEP Earth Energy Corp.’s project near Estevan, Saskatchewan.

The project is in the final engineering stage and on track to start producing, initially, 35 megawatts of electricity by 2025 (with plans to expand to 140 MW), along with heat for greenhouses, says Kirsten Marcia, president and CEO of DEEP Earth Energy. Each 35-MW facility would be enough to power 35,000 households

“We’ve spent over $50 million to date advancing this project,” said Marcia, who has a background in the mining industry.

The project also includes two innovations that are the first of their kind in the world for geothermal development. DEEP’s wells are drilled horizontally, like those in the “fracking” business, to unlock natural gas in geologically “tight” underground formations. In DEEP’s project, these wells enable cold water to be pumped into and slowly percolate through the sandstone formation, reload with heat and be at 120 degrees C when pumped to the surface.

The project features Organic Rankine Cycle technology, which employs fluid with a boiling point below that of water, which provides an energy-efficient capture and conversion of heat into electricity.

“Drilling horizontally gives us the productivity rates that support an economy project,” Marcia said.

The other innovative aspect of the project is DEEP’s plan to use natural gas-fired power to run the water pumps and an air-cooling facility, but to sequester (permanently store underground) the resulting carbon dioxide in the same geological reservoir.

“We believe that the integration of horizontal drilling, supported with natural gas and carbon sequestration, will have transferability to other sedimentary basins around the world,” Marcia said.

She noted that DEEP started its project in 2010, but struggled with it until 2018 when NRCan contributed $25 million through its then-new Emerging Renewable Energy Program. “That funding provided the confidence and de-risking so that we could attract the private equity,” she said, referring to another $25 million that has been raised.

According to Marcia, geothermal development in Canada could be accelerated with more funding for exploration and drilling, such as federal or provincial incentives to oil and gas industry to drill their wells a bit deeper and do some testing for the geothermal heat resource.

Grasby agreed: “There’s no one better skilled to look for geothermal resources than industries that have been drilling and developing the deep subsurface for a long time. There’s a lot of expertise in Canada that can be applied to this.”


Natural Resources Canada funding and other investment in geothermal projects

Project name Name of developer

Project location


NRCan funding program name

NRCan funding and other investment


Project description
Williston Basin geothermal project DEEP Earth Energy Production Corp. (Saskatoon) SK Emerging Renewable Power Program

$25.6 million (NRCan)


Link to project announcement


$175,000 in provincial funding


More than $25 million in private equity

A geothermal power project using 120-degree C water to generate, initially, 35 MW of electricity (with potential to expand to 140 MW). Six wells drilled to a depth of 3.5 km, with a 2-km lateral length loop; power purchase agreement signed with SaskPower; commissioning of first 35-MW facility scheduled for early 2025.
Alberta No 1 geothermal project

Terrapin Geothermics Inc. (Edmonton)



AB Emerging Renewable Power Program

$25.4 million (NRCan)


Link to project announcement

A geothermal power project using a well drilled to 4 km deep, near Grande Prairie in northern Alberta. Scheduled for completion by 2025. The project aims to generate 10 MW of power for the grid, along with heat from a nearby industrial district. Terrapin has partnered with the University of Alberta and NRCan’s CanmetENERGY on a feasibility study to combine  geothermal energy production with carbon sequestration.
Tu Deh-Kah (“water steam” in the Dene language) geothermal project (previously called the Clarke Lake geothermal project)

Deh Tai Corporation

Fort Nelson First Nation economic development corporation

BC Emerging Renewable Power Program

$38.2 million (NRCan)



Link to project announcement


About $2 million from Western Economic Diversification Canada


About $1 million  in provincial government funding

A geothermal power project near Clarke Lake, B.C., using 120-degree C water 2-2.5 km deep to generate, initially, 7 MW of electricity (with potential to expand to 15 MW, along with heating year-round greenhouses. First round of well testing completed in two full-size geothermal wells.

Project on geothermal resources associated with crustal-scale fault systems in Canada


Government of Yukon YK Emerging Renewable Power Program

$2 million (NRCan)


Link to project announcement

To explore the potential of geothermal energy as a long-term source of renewable energy for communities currently powered by diesel fuel. Led by Yukon Geological Survey, the regional assessment will support funding for drilling at least two temperature-gradient wells along the Denali Fault near the Kluane Lake First Nation.
Latitude 53 geothermal project Novus Earth (Calgary) AB Smart Renewables and Electrification Pathways Program

$5 million (NRCan)


Link to project announcement


Mitacs National Research Organization is also contributing about $1.6 million

A geothermal power project using water run in a 4-km, closed-loop pipe system to generate 3.1 MW of electricity for the grid. The heat generated will be used in the company’s modular facilities for growing produce and for aquaculture, and potentially for a district heating and cooling system in Hinton. Plans to drill its first exploratory well in fall of 2022.
Front End Engineering Design (FEED) study: Williston Basin low temperature geothermal demonstration DEEP Earth Energy Production Corp. SK Eco-Energy Innovation Initiative

$1 million (NRCan)


Link to project announcement

In 2012, NRCan’s eco-Energy Innovation program provided funding for a front-end engineering design study for constructing a geothermal power production study in the Williston Basin. The study provided critical information that was required to demonstrate the feasibility and reduce risks associated with the construction of DEEP Earth Energy Production’s first-of-its-kind in Canada geothermal power facility.

Williston Basin geothermal power generation FEED study


DEEP Earth Energy Production Corp.


SK Energy Innovation Program

$350,000 (NRCan)


Link to project announcement


$175,000 in provincial funding

Building on the DEEP pre-feasibility study funded through the eco-Energy Innovation program, in 2018 NRCan’s Energy Innovation Program provided funding to support drilling and testing to assess the proof of concept and to better understand reservoir characteristics in the Williston Basin. The project helped to demonstrate the viability of DEEP Earth Energy geothermal power facility.
“Sustainaville” GeoPark Borealis Geopower Inc. (Calgary) BC Energy Innovation Program

$1.54 million



Link to project announcement


A front-end engineering design study and drilling program for a geothermal power and heat demonstration project at an industrial park in Valemount, B.C. A test well identified a geothermal heat resource, but not sufficiently hot for geothermally driven electricity. The project scale and scope is being re-examined, to determine if an alternative viable project can be developed.

Fuel for Reconciliation geothermal project


Kitselas Geothermal – a joint company owned by Gits’llaasu (pronounced Kitselas) First Nation near Terrace and Borealis Geothermal (Calgary)





$500,000 from the B.C. First Nations Clean Energy Business Fund


A multi-phase geothermal energy project located near Terrace, B.C. The first phase will provide industrial-scale geothermal heating.
Eavor- Loop demonstration project Eavor Technologies Inc. (Calgary) AB Clean Growth Program

$2.5 million (NRCan)


Link to project announcement


$4.2 million from Sustainable Development Technology Canada


$1 million from Emissions Reduction Alberta, plus $1 million from Alberta Innovates


$62.57 million in private equity

A geothermal power demonstration project, using vertical wells 2.4 km deep and horizontal wells, in a first-of-its-kind closed-loop system. The project uses a proprietary heat-conducting fluid, so no water is pumped to from the surface into the reservoir. Located near Rocky Mountain House in west-central Alberta, the project is designed to generate 10 MW of electricity. Drilling and construction began in August 2019. The company will likely build its first commercial plant in Germany, mainly due to the higher market price of electricity in Germany compared with Alberta.

Sources: Natural Resources Canada; Geothermal Canada, Renewable Energy World


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