
By David Dempsey*
New Zealand’s North Island features a number of geothermal systems, several of which are used to generate some 1,000 MegaWatts of electricity. But deeper down there may be even more potential.
The government is now investing NZ$60 million to explore what is known as “supercritical” geothermal energy, following five years of feasibility research led by GNS Science.
Supercritical geothermal is hotter and deeper than conventional geothermal sources. It targets rocks between 375°C and 500°C, close to – but not within – magma.
Water at these temperatures and depths has three to seven times more energy for conversion to electricity, compared to ordinary geothermal generation at comparatively cooler temperatures of 200°C to 300°C.
The investment is staged, with $5 million earmarked for international consultants to design a super-deep well, and further funds to be released later for drilling to depths of up to six kilometres. Consultation is underway, with resources minister Shane Jones hoping to convince Māori landowners to collaborate.

GNS Science estimates the central North Island might have about 3,500MW worth of this resource, although actually accessing it might be difficult and expensive. The energy consulting firm Castalia was engaged to predict how much would be worth developing, suggesting between 1,300MW and 2,000MW, starting from 2037.
This would be a lot of extra power. Even better, it would reduce the peaks and troughs in generation that arise from more variable solar and wind sources, which are expected to make up a growing share of electricity generation in the future. Supercritical geothermal is reportedly cost effective, which means the technology deserves serious consideration. But such claims should be subject to scrutiny.
Successive governments have supported major state energy projects, including the Manapouri power station, petroleum exploration during the early 2000s, early geothermal drilling and the investigation of a pumped hydro scheme at Lake Onslow. The need for energy security clearly motivates such investments.
But New Zealand has a healthy geothermal industry. In the past two decades, geothermal companies have invested $2 billion in hundreds of new wells and new power plants. The industry already knows how to drill wells and profit from them. So why is the government stepping in now?
In practice, supercritical geothermal exploration and development faces several research, technical and economic risks. Private enterprise seems unwilling to bear them alone, prompting the government to step in to establish feasibility.
How to crack soft rock
One problem supercritical geothermal might encounter is that drilling deeper might find lots of hot rock, but not much water. Drilling experiments in Japan and Italy have shown that reaching 500°C is possible, but in both cases the rock was so ductile (pliable and easily stretched) because of the high temperatures that it couldn’t keep open the gaps needed for water to flow.
However, the experience was different in Iceland where two wells managed to find water above 400°C. At this stage, it’s not clear whether this is because Iceland has special rocks – particularly basalts, which are less ductile – or because the country is being stretched through tectonic forces at a high rate. New Zealand is less able to count on basalts but it does experience rapid tectonic stretching.
Deep drilling would test this key hypothesis: is there permeability (gaps for water to flow through) at supercritical conditions? The only way to know for sure is to drill down.
If there isn’t permeability, the government could either abandon the investment or look into methods to create it. Multi-stage hydraulic fracturing (“fracking”) is an option which has worked overseas in the North American shale gas industry. It has also recently been demonstrated in some US geothermal systems.
Even if we did find permeability, the water produced in Iceland’s supercritical wells was enormously corrosive. A better option then might be to inject cold water into the well, suppressing the corrosive fluids. The injected water would heat up and rise into the overlying geothermal system – flushing the heat upwards.
However, both water injection and fracking can trigger earthquakes, perhaps a magnitude 4-5 every year or a magnitude 5-6 every few decades. This happened in 2017 in Pohang in South Korea where water injection triggered a magnitude 5.5 earthquake. It resulted in the cancellation of the geothermal project.
But there are many other geothermal projects where injection has not led to concerning earthquake activity.
Fierce competition from solar, wind and batteries
The other risk is economic. Supercritical geothermal might one day be technically feasible, but its potential contribution in New Zealand will be limited if it can’t beat other generation technologies on cost.
Worldwide, the renewable energy sector continues to be disrupted by unprecedented cost decreases driven by innovations in utility-scale battery storage and solar photovoltaics.
But the supply chains are largely overseas, mostly concentrated in China. This adds geopolitical complexity to the energy security calculus. Homegrown solutions are a strength.
Nevertheless, the International Renewable Energy Agency reports cost reductions for solar and battery modules of 89% and 86% between 2010 and 2023. Solar costs drop 33% each time the built amount doubles. Drops in battery cost are enabling large deployments for daily smoothing of the peaks and troughs of intermittent solar and wind generation.
This shifting cost landscape creates financial uncertainty for energy investors. While cost declines might not continue forever, it’s hard to pick when they will level off. Meanwhile, geothermal costs have been flat for a long time. A billion-dollar geothermal investment might quickly become uncompetitive.
Despite all these caveats, we shouldn’t overlook the positive signal of the government taking a bet on New Zealand science and innovation. It will be exciting to see what’s happening at six kilometres of depth underground. And although the plan is not to drill for magma, an accidental strike (as happened in Iceland) would lead to some amazing science.
Lastly, energy security deserves to be taken seriously over the long term. While supercritical geothermal won’t fix our immediate vulnerability to winter scarcity, it could help avoid similar issues in the 2040s.
*David Dempsey, Associate Professor in Natural Resources Engineering, University of Canterbury.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
3 Comments
Reasonably balanced comment.
I don't think any of our current parameters will apply in 2040 - geopolitical, economic, supply-chain. So the question is: Can this - or any - proposed technology be maintained on a No8/DIY footing, locally and long-term?
Feels like we’re being too cautious here in terms of both timing and commercial risk. 2037 is unambitious, the drilling technology exists at scale already courtesy of fracking industry. Wind, solar and batteries may all continue getting cheaper but geothermal has the unique advantage of being able to produce near full outputs 24x365. Hydro is effectively fully exploited, demand will continue to increase with population growth and further electrification and fossil fuels must be out of the question. We need all the renewable solutions available and geothermal has unique advantages we should be taking greater advantage of. Good to see govt support but more urgency would be better. And the commercial risk of backing a technology that ends up being a little more expensive than future wind and solar pales into insignificance against the commercial risk of the country running out of power!
IMO 1 billion$ investment out of NZ annual income from exports at roughly 19.4 billion is not an excessive risk for what could be a very valuable long term power generation asset if things work out for the better. On page 5 of the Castalia report https://cdn.prod.website-files.com/5ee80754caf15981698cc972/65430d6dcc0… states that 'The costs to build SCGT generation plants are uncertain and have not yet been estimated for the New Zealand context. The wells will be around twice as deep as the current deepest conventional geothermal wells, with hotter fluids and different chemical characteristics. Even if costs are double the conventional geothermal costs, very significant SCGT could be built in the 100 percent renewable scenario. At 1.5x the cost of conventional geothermal, demand for SCGT will be robust in the renewable or gas-peaker electricity system scenarios'
If a drill site is chosen with plentiful available surface water nearby it possibly could be used for injection to recover heat even if the drilled rock did not have sufficient deep water, or it turns out that the deep rock type and temperature is unsuitable for supercritical steam extraction. Presumably then the site could support more conventional thermal power generation and the investment made be recovered with useful industrial heat and/or electric power to supply the national grid? Another possibility is extraction of minerals from the water as well as the heat. NZ could be lucky or unlucky or somewhere in between in this https://www.cinz.nz/posts/could-new-zealands-geothermal-fields-be-mined… but more likely from this report 'The concentrations of Li and the indicative REEs neodymium and dysprosium in the geothermal fluids, particularly when the ‘consented take’ (i.e., the amount of fluid allowed to be extracted annually) is taken onto account, from the geothermal fields currently being exploited in New Zealand are quite low (Table 1).22 Moreover, the currently low prices for Dy (Fig. 1), Nd (Fig. 1), and Li (Fig. 2) suggest that any economic benefit from ‘mining’ these metals alongside the current use of the fluid as the feedstock for electricity generation would be limited.'
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