Economic Performance Of Direct Use Geothermal, Considering Technical And Economic Uncertainty

Abstract

District heating and heat energy networks are gaining importance in the provision of renewable energy. At the same time market penetration of direct use geothermal energy remains relatively restricted and a large potential for direct use geothermal remains untapped. As the scientific understanding of a diversity of low enthalpy fields and analysis methods are evolving , the interaction between the technical and the economic aspects becomes more pertinent for successful project implementation and wider dissemination of installed deep geothermal systems for direct use. The importance and impact of technical and economic parameters remains crucial for the realization of planned systems. In this work, a techno-economic analysis is presented. of a deep, direct use geothermal heat system in a conductive geological setting (Groningen, NE Netherlands). The model expands on the uncertainties of the initial reservoir state, geological and operational conditions. These uncertainties are quantified by means of 4,536 3D reservoir simulations. Using the numerical reservoir simulation results, the economic uncertainties are further incorporated in the form of probability distributions. 20,000 iterations of the model are performed over a project lifetime of 40 years. The analysis also includes the current renewable subsidy scheme in the Netherlands. A combination of ExAnte and Ex-Post criteria are used to evaluate the economic performance of the system based on the Net Present Value (NPV), Levelised Cost of Heat (LCOH) and Expected Monetary Value (EMV). The sensitivity analysis highlights the load factor (effective flowrate) as the most important parameter for the economic performance and for the energy costs. However, the differences between the NPV and LCOH sensitivities highlight the importance of using both metrics for the economic performance of such systems. The presented project remains economically challenging, exhibiting a 50% probability of marginal revenues over its lifetime. Systematic insights are drawn with regard to potential improvements of technical and economic aspects of such geothermal heat systems.

AAPG Datapages/Search and Discovery Article #90345 © 2018 AAPG European Region, Geothermal Cross Over Technology Workshop, Part II, Utrecht, The Netherlands, April 17-18, 2018