Dig Energy's Small Drill Rig Could Make Geothermal Affordable

Dig Energy Aims to Revolutionize Geothermal with Compact Drilling Technology

Near Manchester, New Hampshire, a demonstration showcased an unexpected sight – a surge of muddy water. This wasn't a setback, but rather a key feature of Dig Energy’s innovative, compact drilling rig, a startup operating in stealth mode for the past five years.

Addressing the High Cost of Geothermal Energy

Dig Energy has developed a water-jet drilling rig with the goal of making geothermal heating and cooling significantly more affordable, ultimately displacing traditional fossil fuel-based systems. The core promise of this technology lies in its potential to reduce drilling expenses by as much as 80%.

On Tuesday, Dig Energy publicly announced a $5 million seed funding round, as exclusively reported by TechCrunch. Azolla Ventures and Avila VC spearheaded the investment, with additional participation from Baukunst, Conifer Infrastructure Partners, Koa Labs, Mercator Partners, Drew Scott, and Suffolk Technologies.

The Potential Impact of Widespread Geothermal Adoption

Heating and cooling account for approximately one-third of total energy consumption in the United States, rising to 40% in data centers. Widespread geothermal adoption could substantially lower HVAC energy usage and potentially save grid operators up to $4 billion annually.

According to research from Oak Ridge National Laboratory, the U.S. will need to drill 6 million feet of geothermal borehole each day by 2050 to adequately stabilize its electrical grid.

The Challenge: Initial Costs Remain a Barrier

Despite its long-term benefits, geothermal energy adoption has historically been limited by high initial costs. Dulcie Madden, Dig’s co-founder and CEO, explained to TechCrunch that geothermal currently represents only 1% of building installations in the U.S., despite its low operating expenses.

Two Approaches to Geothermal Energy

There are two primary approaches to geothermal energy. Enhanced geothermal systems drill to depths of thousands or even tens of thousands of feet, tapping into extremely hot temperatures to generate electricity. Dig Energy, however, focuses on shallow geothermal, typically limited to depths of a few hundred feet.

At these shallower depths, the ground maintains a relatively constant temperature throughout the year, making it ideal for heating and cooling both residential and commercial structures.

Shallow geothermal systems utilize underground piping to circulate water, transferring heat to or from the earth. During summer months, excess heat is released, while in winter, heat is absorbed to warm buildings.

Reducing Installation Costs: The Key to Wider Adoption

The installation of the ground loop – the underground piping network – accounts for roughly 30% of the total cost of a ground-source heat pump system. This represents a major obstacle to broader adoption compared to conventional heating and air-conditioning systems. Dig Energy specifically targeted these costs for reduction.

“When we were getting started, our primary question was, could we engineer a more affordable drill?” Madden stated.

From Previous Startup to Innovative Drilling Technology

Madden and her co-founder, Thomas Lipoma, initiated their exploration of this space five years ago, following the conclusion of their previous venture, Rest Devices. Their research led them to rediscover older studies detailing the use of water jets for earth boring.

While the concept had been researched previously, it wasn’t yet commercially viable. Madden noted that much of existing drilling technology originates from the oil and gas industry, often resulting in equipment that is oversized and excessively powerful for geothermal applications at the depths Dig is targeting.

Rigorous Testing and Refinement

Dig Energy has dedicated years to refining its rig design, conducting extensive test drilling near its New Hampshire facilities. The team has successfully drilled through a variety of soil and rock types, including sandstone, limestone, granite, slate, and shale. Demonstration blocks of dense rock, featuring precisely drilled holes, were presented.

Conventional geothermal drill rigs are capable of similar results, but are significantly larger. Most current models are mounted on large trucks, suitable for accessible sites, but impractical for tight spaces or crowded construction zones.

Dig’s prototype, while not yet ready for commercial deployment, is considerably smaller than traditional rigs. Furthermore, the boreholes created by Dig’s rig are straighter, allowing for closer placement, which is advantageous for developers.

Future Plans and Commercialization

The seed funding will facilitate Dig’s first commercial pilot programs. The rig will undergo slight size adjustments, but will avoid the need for large, double-axle trucks commonly used in the industry.

The company intends to sell its devices to drilling companies, providing them with an additional option for existing projects and potentially unlocking new opportunities. Other companies are also investigating this technology.

A Vision for Universal Geothermal Adoption

“We believe that acquiring a $2 million rig shouldn’t be a prerequisite for entering this business; it should be more accessible,” Madden explained. “Our goal is for geothermal to be implemented in 100% of buildings. Currently, it’s only in 1%. How do we bridge that 99% gap?” she asked, concluding that the market remains largely untapped.