Canada's Big Geothermal Potential

Canada has the potential to generate enough clean, low-cost electricity from geothermal sources to power 5M homes, the country's geothermal association said on Monday.

As things stand though, the resource-rich country does not produce a single unit of geothermal energy.

This is a result of a lack of government funding, a shortage of land made available for development, a dearth of knowledge and the existence of other cheap and more traditional power sources like hydro and natural gas, Alison Thompson, chairman of the Canadian Geothermal Energy Association said.

"Geothermal is practically the lowest-cost electricity, not only of the renewables," Thompson told delegates at an industry conference in Vancouver, showing a slide where only coal-generated power was cheaper.

In Canada, as in the United States, most of the geothermal resources are found in the West. Thompson said Canada has at least 5,000 megawatts of geothermal resource in the western provinces of British Columbia, Alberta, Yukon and Northwest Territories.

The industry wants the Canadian federal and provincial governments to invest in mapping studies and provide early stage financial support, as the U.S. has.

Ironically, Canada has an abundance of geothermal developers but most of the companies are active in the U.S.—the world's biggest producer of geothermal energy.

Some 27% of geothermal development in the U.S. is carried out by Canadian-based companies, said Alexander Richter, director of sustainable energy at Islandsbanki, an Icelandic bank active in geothermal financing.

Geothermal companies have set up shop in Canada largely because of the financial community's comfort with financing mining projects, which are similar to the earlier stages of geothermal development.

Canadian-listed geothermal developers include companies such as Magma Energy Corp., Ram Power Corp. (TSX:RPG), Nevada Geothermal Power and Sierra Geothermal Power Corp.