A $10-million geothermal project under construction in central Alberta is being hailed as a "game-changer" because it doesn't need to use fracking or water and creates no greenhouse gas emissions.

Alberta Infrastructure Minister Prasad Panda called the pilot project a "game-changer" after visiting its site near Rocky Mountain House on Wednesday.

The project — which has been dubbed the Eavor-Loop — is the first of its kind, said John Redfern, president and CEO of Calgary-based Eavor Technologies.

Geothermal energy is a form of renewable energy that comes from heat stored in the earth. The closed-loop geothermal project works kind of like a radiator, Redfern said.

"It's using a lot of traditional building blocks but rearranging them in unusual fashion," said Redfern.

"For example, we're doing a lot of the stuff opposite what you usually do. You know, usually when you're drilling a well you're trying to avoid hitting another well. In our case, we're trying to intersect with another well…. We're starting a few kilometres apart, drilling down a few kilometres, then turning right and drilling toward each other and connecting one well with the other to create this huge U-shaped well.

"So, it creates this radiator effect."

The project recently received $1 million in funding from Alberta Innovates and from Emissions Reduction Alberta.

Canada is not Hawaii or Iceland. But we do have the quality of geothermal energy resources that can actually be used to generate electricity. -Christal Loewen, policy manager for CanGEA

Drilling is underway at both wells for the project, and the loop is expected to be closed in the next week or so. The pilot project will be completed by the end of the year.

Redfern said the project benefits from Alberta's expertise in drilling and abundance of drilling equipment, and is a scalable source of emissions-free power.

It has no GHG emissions, no fracking and no water use, unlike other geothermal projects. It circulates a proprietary fluid that collects heat from below the earth's surface in its 2.5-kilometre loop.

"It's just a much more benign system and it's something that you can implement across 80 per cent of the world instead of five per cent of the world like traditional geothermal," he said.

"You can put it almost anywhere. It's not like a windmill or solar panel … almost everything's underground so you can literally put it in someone's backyard."

After the pilot, Redfern said the company will be focusing on a dozen or so commercial projects in Canada and around the world.

Christal Loewen, policy manager for the Canadian Geothermal Energy Association. (Radio-Canada)

"It's very exciting and we're really hoping for the best from this demonstration project," said Christal Loewen, policy manager for the Canadian Geothermal Energy Association.

Loewen said Canada hasn't been at the forefront of geothermal energy production in the past, partially due to the country's access to many other affordable energy sources, but there's lots of potential.

"Now Canada is not Hawaii or Iceland. But we do have the quality of geothermal energy resources that can actually be used to generate electricity," she said.

Her organization is pressing the Alberta government to create a regulatory framework for geothermal energy development, like B.C. or Saskatchewan.