Geothermal is too expensive, but Dig Energy’s impossibly small drill rig might fix that

In a farm located near Manchester, New Hampshire, I witnessed a surprising sight: a burst of muddy water. For Dig Energy, however, this muddy spectacle is a highlight rather than a setback. The innovative startup, which has quietly been developing its technology for the past five years, is on a mission to revolutionize geothermal heating and cooling by introducing a compact water-jet drilling rig. This groundbreaking rig aims to significantly lower drilling expenses, potentially reducing costs by up to 80%. Recently, Dig Energy announced it has secured $5 million in seed funding, with contributions from prominent investors such as Azolla Ventures and Avila VC, along with other partners including Baukunst and Conifer Infrastructure Partners. The company’s goal is ambitious yet crucial, as heating and cooling account for nearly one-third of energy consumption in the United States. In data centers, this figure can soar to 40%. By harnessing geothermal energy, Dig Energy hopes to drastically reduce HVAC energy usage and save utility operators around $4 billion annually. The urgency for geothermal energy is underscored by a report from the Oak Ridge National Laboratory, which states that the U.S. needs to drill six million feet of geothermal boreholes daily through 2050 to stabilize its aging electrical grid. Despite the long-term benefits, geothermal energy has historically faced challenges due to high initial costs. As noted by co-founder and CEO Dulcie Madden, geothermal installations have only constituted about 1% of building projects in the U.S. for decades, primarily due to the hefty upfront investment required. There are two main types of geothermal energy: Enhanced geothermal systems that drill deep into the Earth to access extreme temperatures for electricity generation, and shallow geothermal systems, which Dig Energy specializes in. Shallow geothermal systems typically extend only hundreds of feet underground, where temperatures remain stable year-round, making them ideal for residential and commercial heating and cooling. The process involves burying pipes underground to facilitate heat exchange between the water and the earth. During summer, the system expels excess heat, while in winter, it absorbs warmth to heat buildings. Unfortunately, the installation of these ground loops accounts for approximately 30% of the overall cost of ground-source heat pumps, contributing to the higher price compared to traditional HVAC systems. To address these financial barriers, Dig Energy focused on developing a more affordable drilling solution. Madden and her husband, co-founder Thomas Lipoma, began their journey into this field five years ago, building upon their previous startup experience. They discovered promising research on employing water jets instead of conventional cutting bits for drilling. While existing drilling technology has its roots in the oil and gas industry, making it bulky and costly for geothermal applications, Dig Energy has spent years perfecting its rig design by conducting tests on various soil and rock types. Their prototype is significantly smaller than traditional geothermal rigs, which are often mounted on large trucks. This compact design allows for better maneuverability in tight spaces, making it suitable for residential backyards and crowded commercial sites. Although Dig Energy's prototype is not yet ready for commercial deployment, its smaller size and ability to drill straighter boreholes present advantages for developers. The company plans to refine the rig further before initiating commercial trials, aided by the recent funding round. With a vision to democratize geothermal energy, Madden emphasizes the need for lower-cost options that can encourage widespread adoption. Currently, geothermal systems exist in only 1% of buildings in the U.S., and Dig Energy aims to change that by tapping into this largely unexploited market.