Razor Energy Corp. with FutEra Power Corp., a subsidiary of Razor, has successfully constructed, commissioned, and is now operating its co-produced geothermal power project in Swan Hills, Alberta. The project combines an Organic Rankine Cycle (“ORC”) Turbine, which captures geothermal heat from the production fluid, and a Natural Gas Turbine (“NGT”).
About the Projects
Both the ORC and the NGT have grid interconnections that enable direct sales of electricity to the Alberta electricity grid at merchant power prices. Neither the ORC nor NGT is subject to hedging for pricing or commitments to any level of power generation beyond voluntary dispatch commitments. Both systems have been running in a steady state while optimization efforts are underway.
The final construction cost of the project is estimated to be $49 million and was privately financed by Razor and Arena Investors. An institutional asset manager, Arena Investors has $2.2 billion of committed assets that specialize in providing capital solutions for middle market companies.
Challenges Alberta is Facing
Legacy oil and gas fields in Alberta face challenges with lower production levels and high fixed costs. However, these fields also have practical advantages when considering the existing infrastructure, reservoir characteristics, wells, and operational footprints. To meet the objectives of creating lower carbon electricity while leveraging oil and gas operations, the project produces and injects large volumes of hot production fluids into the system. This technique carries heat as a renewable form of geothermal energy on a daily basis as part of its ongoing conventional oil and gas operations and waterflood activities. As a result, the hot fluid provides FutEra with the opportunity to capture geothermal heat energy and generate power with zero GHG emissions.
Benefits of Co-Production
Using existing assets yields cumulative, and substantive, effects of reducing typical geothermal project capital outlay, improving the security of heat supply, as well as economic returns. In addition, the co-production approach enables Alberta’s fledgling geothermal industry to develop alongside Alberta’s well-respected, world-class oil and gas operations, safety standards, and regulatory best practices.
FutEra’s next phase of the Project will see the addition of solar, and potentially carbon capture with usage and/or sequestration. Ultimately, creating a net negative carbon emitting traditional oil and gas asset.