BP and Chevron have made a landmark expansion into geothermal energy on Tuesday, betting on a new technology that could prove to be the world’s first scalable clean energy derived from a constant source: the natural heat of the earth. Source: MarketWatch

The two major oil companies have headlined a $40 million funding round into a Canadian geothermal energy firm called Eavor. Based in Calgary, Eavor has pioneered a new form of technology that could feasibly be deployed in many places around the world.

The investment marks a key move into an area otherwise ignored by energy companies, which have largely looked to wind and solar projects in their efforts to diversify away from fossil fields.

It is the first investment into geothermal energy for BP BP, 3.23% and a re-entry into the field for Chevron CVX, +2.70%, which sold its geothermal assets in 2016.

Eavor has previously only accepted angel investment and venture capital. The $40 million injection will be used to further research and development to help scale the power system to be price-competitive.

We see Eavor’s potential to be complementary to our growing wind and solar portfolios. Technology such as Eavor’s has the potential to deliver geothermal power and heat and help unlock a low carbon future.

Felipe Arbelaez, Senior Vice President of Zero Carbon Energy, BP

Eavor has developed a new type of geothermal technology that, in very simple terms, creates an underground “radiator.” 

The Eavor “Loop” consists of a closed-loop network of pipes installed typically 3 kilometers to 4 kilometers below the earth’s surface, originating and terminating in the same aboveground facility. The pipes are installed using advanced drilling techniques perfected in the oil patch.

Liquid travels in the pipes from the aboveground facility through the hot ambient underground environment, before naturally circulating back to the top of the loop. The hot liquid is then converted into electricity or transferred to a district heat grid.