REDI Regional Clean Energy Business Cases in Northwest Alberta

Attracting Investment for Businesses to Use Geothermal Energy and Heat in Rainbow Lake

Since 2002, the Regional Economic Development Initiative (REDI) of Northwest Alberta has worked to promote and enhance economic growth for its member communities.

In recent years, REDI has commissioned dozens of business cases, which are professional documents that provide important information about a project and offer reasons to implement it.

“We are excited to soon release 11 clean energy business cases,” said REDI Manager Andrew O’Rourke. “Each one explores the specific technical and economic advantages of clean energy solutions in our region, and six of them highlight the community of Rainbow Lake—where there are planned geothermal energy developments already in motion.”

To develop these green energy business cases, REDI commissioned Ground Floor Labs, an Alberta-based consulting company specializing in rural economic development.

How Does Geothermal Energy Work?

Put simply, geothermal energy is heat energy found below the surface of the earth. If extracted efficiently, the energy is renewable and can offer large amounts of heat and power.

According to the Government of Canada, geothermal energy “is extracted by drilling wells and circulating a fluid or brine through an underground reservoir and then using it at the surface as direct heat or using it to produce electricity.

Rainbow Lake: Diversifying with Geothermal Energy

Deep beneath a small oil-patch town of about 500 people, a geothermal reservoir could spark an unprecedented economic transformation for Northwest Alberta.

“For decades, Rainbow Lake has been proud of its energy roots. Now we’re building onto that legacy by diversifying into clean energy, agriculture, technology and tourism,” said former Rainbow Lake Councillor Don Werner.

Rainbow Lake—about 135 km west of High Level—is located above a geothermal reservoir. Research shows that the reservoir reaches 110 degrees Celsius (above the boiling point) at a modest depth of 2.25 km. This accessible heat and power could unlock a diversified, sustainable industrial future for the town and the region.

According to the Alberta Municipalities website (2024), “the Town of Rainbow Lake is undertaking a pilot project to prove enough heat and electricity can be produced for their entire community.”

Mozzy the Mosquito, Rainbow Lake, AB

The project aims to use patent-pending technology, and if things go as planned, they will start building a surface geothermal facility and installing infrastructure throughout the town. Proposed timelines from 2024 suggest this project could be completed as early as 2028.

According to Town of Rainbow Lake CAO Dan Fletcher, who has worked on this project for eight years, the Town plans to use geothermal heat and power to stabilize the regional energy grid, heat local homes and businesses and enhance the efficiency and lifespan of their oil and gas industry.

“Rainbow Lake is a traditional Alberta energy town,” said Fletcher. “Our goal is to use the pressure generated from the geothermal extraction process to release stranded traditional energy resources and continue to support our existing industry. It’s a value add for our production stream, and it has the potential to reshape our town’s economic landscape.”

Geothermal Business Cases

Currently in development, REDI will complete six business cases geared toward the existence of reliable geothermal energy production in the Rainbow Lake area. They are carbon capture and storage, crypto mining, data centres, eco-tourism—such as geothermal hot springs, aquaculture/aquaponics and heat industries involved with crop/lumber drying.

“Our goal is to show how geothermal energy can be integrated into multiple sectors, providing reliable, clean power and heat for everything from industrial greenhouses and aquaponics to data centres and community facilities,” said O’Rourke. “It’s about leveraging what’s beneath our feet for a brighter, greener future.”

Low-cost, reliable geothermal power would be a significant draw for energy-intensive sectors like crypto mining and large-scale data centres, potentially positioning the region as a hub for high-performance computing.

There is also potential for a heat industry—supporting efficient processes in lumber drying, food processing and chemical manufacturing.

A controlled, year-round production for aquaculture/aquaponics could result in a local supply of fish and produce, independent of the northern climate.

Rainbow Lake’s existing infrastructure and geology are ideal for carbon capture and storage projects, supporting regional industrial decarbonization.

A predictable heat source is perfect for developing eco-tourism ventures, such as thermal spas and hot springs resorts, attracting visitors year-round.

These opportunities promise job creation, regional collaboration and a stable, low-carbon economic future.

“Geothermal is the foundation that allows us to attract innovative businesses and create good local jobs,” said Werner.

Non-Geothermal Green Energy Business Cases

Outside of Rainbow Lake’s geothermal area, there are many opportunities for energy diversification and infrastructure. These come with their own economic growth potential as well as contribute to a local resilient, low-carbon energy grid.

The five green, non-geothermal business cases focus on solar farms, blue hydrogen, biomass, micro nuclear plants and bio-gas.

Micro nuclear plants offer a viable, cost-effective source of stable, reliable and clean baseload power, ideal for powering remote industrial operations and stabilizing the regional grid.

The region can capitalize on its agricultural and forestry strengths by implementing solar farming for dual-land use energy generation. And, there are opportunities to harness biogas and biomass to turn organic waste and forest residue into reliable heat and electricity.

Leveraging existing natural gas infrastructure and vast geological storage capacity, the region is strategically positioned to develop blue hydrogen production—the capturing of emissions—to become a major supplier of low-carbon fuel for regional and national markets.

These 11 business cases collectively create a mosaic of sustainable energy opportunities that could provide security for Northwest Alberta’s long-term energy and economic growth needs.