Tuesday, 28 June 2011

Geothermal Renaissance (continued from 16 June)

In the previous entry (16 June, the one before the Solar Flagship funding announcement), I mentioned a series of projects mostly in USA aiming step-change improvements in geothermal productivity. These can be added under three headings:

• Projects aiming to increase the production flow rate
• Projects aiming to reduce the cost of drilling geothermal wells
• Projects aiming to increase brine productivity, i.e. more electricity from the same brine stream

The first group of projects is receiving the most attention and the largest share of funding. Rightfully so because the single most important improvement that will make an impact on the commercial feasibility of EGS electricity is increasing the flow rate from an EGS reservoir. At the present, my estimate of the cost of EGS electricity is about 27 cents/kWh. I arrived at this figure using the DoE's GETEM model. This is based on a flow rate of 30 kg/s at a temperature of 250^oC. The values I picked for some of the other critical parameters and the make-up of this cost is shown in the following figure.

Figure 1 - The present cost of EGS electricity using DoE GETEM model

 

If the flow rate is doubled, using the same model and other assumptions remaining the same, this levelised cost of electricity estimate would come down to 15.9 cents/kWh. This would go a considerable way in making the geothermal electricity the cheapest renewable electricity but by itself would not be enough to make it commercially feasible at the current electricity prices. Even if we triple the flow rate to 90 kg/s, using the GETEM model and all other things being the same, the cost of electricity would still be 12.1 cents/kWh. Progress in the other headings, however, will bring it down to the levels where it will be competitive with natural gas.

I believe the following are achievable in the next several years:

• triple the flow rate from one well to 90 kg/s
• reduce the cost of geothermal drilling so that we can use the medium-cost model in GETEM
• develop better plant technology
  • using natural draft dry cooling towers so that we do not lose 10% of our generation to drive fans (accepting an extra $400/kWe of capital cost to build the tower); and
  • using supercritical cycles so that we improve our brine effectiveness (even though this increases the plant capital cost by 30%)

These improvements will bring the cost of geothermal electricity down to 8.5 US cents/kWh, where it will be a viable contender against natural gas as a baseline option.

The effect of different technology advances on the cost of geothermal electricity is shown in Figure 2.

Figure 2 - Effect of new technology on EGS Electricity Cost (using DoE GETEM model; see above for technology definitions)

The numbers in Figure 2 are not stabs in the dark. There are genuine projects aiming to achieve these objectives and more and they have a good chance of success. That is why I am very optimistic about the future of geothermal energy. However, it will be very important for the sector to realise that significant improvements are needed before EGS becomes commercially feasible. These improvements are achievable and there are pathways to achieve them but nevertheless it will take some time and substantive funding to achieve them. Private sector will not be able to generate the funding levels to develop and demonstrate these improvements. You may ask then why I feel still optimistic. I feel optimistic because these facts have been accepted overseas and very strong EGS programs are occurring in USA and soon in Europe. The initial enthusiasm in Australia could not be sustained because too much risk-taking was being expected from the private investors. I think this is being realised now and Australian geothermal energy sector will catch up with the rest of the world.

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