A new techno-economic analysis by the Cascade Institute finds that enhanced geothermal systems (EGS)—a next-generation geothermal method for generating electricity that taps deep underground heat, even in areas lacking naturally occurring hot-water reservoirs—represent a reliable source of clean baseload power in western and northwestern Canada.
With investments in continued innovation to improve the costs and efficiency of geoscience, drilling, well completion, and reservoir engineering, EGS could soon become a low-cost option for meeting Canada’s growing demand for clean, reliable power, with costs as low as 3–6¢/kWh.
The report, The Deep Heat Advantage: A techno-economic analysis of Enhanced Geothermal Systems in western and northwestern Canada, models the cost of EGS at four hypothetical test sites in Alberta, British Columbia, Saskatchewan, and the Northwest Territories.
Cascade Institute researchers find that EGS technology can already compete with conventional baseload options such as new nuclear and gas peaker plants (plants that operate only at peak demand times). Their modelling shows that continued innovation could drive costs down by 40 to 50 percent, making enhanced geothermal both one of the cleanest and most affordable options for generating baseload power in western Canada. Analysis also shows that targeting deeper, hotter geologic formations results in the lowest levelized cost of energy. In short: deeper is cheaper.
“This is novel work that provides updated cost models for EGS in the Canadian context, and the results are very promising,” said Gordon Brasnett, lead author of the report and a fellow with Cascade’s Geothermal Program. “Our research shows that EGS is already cost-competitive with other firm power sources like nuclear and gas. And investing in innovation today can drive those costs even lower. Next-generation geothermal represents a clean, secure, and affordable piece of Canada’s future energy mix.”
The study was conducted by Brasnett, Megan Eyre (Geothermal Geoscientist, formerly Cascade), and Peter Massie (Director, Cascade’s Geothermal Energy Office). Using the U.S. Department of Energy’s System Advisor Model (SAM) and Geothermal Electricity Technology Evaluation Model (GETEM), the team simulated capital costs, operating costs, and levelized cost of energy (LCOE) under present-day and future scenarios.
Among the report’s promising findings:
- Mt. Meager (B.C.) and Fort Liard (NWT) already show competitive costs with gas peaker and new nuclear plants.
- With innovation, all four sites can achieve LCOE in the range of 3–6¢/kWh, competitive with or cheaper than any other generating technology.
- Anticipated advances in drilling, stimulation, and well-field optimization offer leverage for further cost reductions.
The report is part of the Cascade Institute’s Ultradeep Geothermal program, which examines how breakthrough subsurface technologies can help Canada deliver clean, firm power at scale. By filling critical data gaps, The Deep Heat Advantage enables policymakers, utilities, and energy modellers to integrate geothermal energy into long-term energy-system planning—a vital step in Canada’s clean-energy transition.
The Cascade Institute is also developing a Canadian “heat map” that will extend this analysis, integrating geophysical and heat-flow data to further explore next-generation geothermal potential from coast to coast.
Read the full report and executive summary
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