Geothermal power - cheaper than coal

Ultra deep geothermal power

10 January 2010

Mark Gankema

version 11 - summary

Renewable energy cheaper than coal

10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary© Copyright M.E. Gankema – All rights reserved

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Contents

• Summary• Advantages• The main principle • The ‘deeper is cheaper’ calculations• How cheap is coal?• Proposed configuration• Current status• Other information• Contact details


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With existing technologies a renewable energy source cheaper than coal can be created

Summary

With a new combination of existing technologies, it is possible to create a renewable energy source –ultra deep geothermal power– which is cheaper than coal. The concept has been verified by industry experts.

The principle is simple. There is a double effect at higher temperature ranges: (1) a much better electricity conversion efficiency and (2) the amount of available energy is higher. This double effect is stronger than the related cost of ultra deep drilling. Simple calculations demonstrate that ‘deeper is cheaper’.

To be cheaper than coal the investment per electrical MW needs to be less than 3,0 million euro. For attractive North-West European locations the investment per MW is expected to be 2,6 million euro.

Of course deep drilling is not that simple. Major issues have been researched and analyzed. Satisfactory solutions have been found and validated by industry experts.

A group of partner organisations –Grontmij, IF Technology, Well Engineering Partner and Bright Capital Partners– are building a consortium and making preparations to execute the project. Project management has over 10 years of experience in amongst others energy and engineering industry.


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Geothermal power has major advantagesADVANTAGES

Advantage of geothermal power compared to wind and solar energy

1. Financially very attractive - potentially cheaper than coal

2. Indepent from wind and light conditions, power supply can be matched with demand

3. No need for storage facilities. In a sustainable economy based on wind and solar storage facilities will be necessary, these investments can be avoided

4. Supply can be close to the market, decentral generation is possible, no major transport infrastructure needed

5. No landscape pollution (apart from drilling rig during construction)

6. Little footprint, approx. 1 ha


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Electricity conversion plant efficiency'heat-to-power'

100 200 300 400 500

Temperature (ºC)

The temperature range determines significantly conversion efficiency and thus electricity output

Binary

Single/double flash

Super critical

10-15%

20-25%

30-35%

Most geothermal plants operate in this temperature range

THE MAIN PRINCIPLE


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Due to conversion efficiency a double effect applies to electrical output power

Thermal and electrical power

400 ºC – 147 MW thermal

200 ºC – 63 MW thermal

36 MW electric9 MWe4x more

electrical power

Based on 1 production well with a flow rate of 100 l/s

‘a bigger cake and a larger piece of the cake’

THE MAIN PRINCIPLE


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Net capacity - Self flowing well

0

10

20

30

40

150 200 250 300 350 400

Temperature (ºC)

Net

cap

acity

(MW

)

MW capacity depends not only on temperature, also productivity index (PI) and reservoir size do matter

PI=0,5

PI=1

PI=2

Capacity limit to avoid reservoir exhaustion

Reservoir size= 5,0 km3

Reservoir size= 2,5 km3

DEEPER IS CHEAPER


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We used the most conservative estimate, a Well Engineers’ rule of thumb of 3000 euro/meter

* Source: ‘A comparison of geothermal with oil and gas well drilling costs’ by Chad Augustine, Jefferson W. Tester and Brian Anderson. 2006, Massachusetts Institute of Technology (MIT)

Drilling costs for geothermal wells

0

10

20

30

40

2.000 3.000 4.000 5.000 6.000 7.000 8.000 9.000 10.000Depth (meters)

Cos

ts (m

ln. $

)

Rule of thumb

WellCost Lite model *

DEEPER IS CHEAPER


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Investment per MW - EGS Self flowing 35ºC/km

0

2

4

6

8

10

7.000 8.000 9.000 10.000

(mill

ion

euro

/MW

)

Investment per MW decreases with drilling depth

PI=1

PI=2

255ºC 290ºC 325ºC 360ºC17-41 MW* 35-53 MW* 63-69 MW* 89 MW*

Temperature:Total capacity:

Depth (meters):

PI=0,5

Limit due toreservoir size

2,5 km3

5,0 km3

* Based on 4 injection + 5 production wells per power plant and reservoir size of 2,5 km3

Temperature gradient = 35ºC/km

DEEPER IS CHEAPER

Cheaper than coal benchmark


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Investment per MW - EGS Self flowing 40ºC/km

0

2

4

6

8

10

7.000 8.000 9.000 10.000

(mill

ion

euro

/MW

)

For a temperature gradient of 40ºC/km, investments may be as lowas 2,1 million euro per MW

410ºC290ºC 330ºC 370ºC31-53 MW* 58-72 MW* 96 MW* 126 MW*

Temperature:Total capacity:

Depth (meters):

* Based on 4 injection + 5 production wells per power plant and reservoir size of 2,5 km3

PI=1

PI=2

PI=0,5

Limit due toreservoir size

2,5 km3

5,0 km3

Temperature gradient = 40ºC/km

DEEPER IS CHEAPER

Cheaper than coal benchmark


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Cost comparision [euro/kWh]

0,0100,015

0,023

0,039

0,021

-

Coal 89 $/ton Geothermal power

Maintenance & operation Capital Fuel

Google’s ‘cheaper than coal’ investment benchmark is 3,0 million euro per MW electric

HOW CHEAP IS COAL

0,054 0,054Assumptions

– Coal price is 89 $/ton (January 2010)

– Investment life time is 20 years, both for coal and geothermal power

– Interest rate is 8%

– Investment for coal fired plant with CO2

capturing facility is 1,8 million euro

– 1 euro is 1,40 dollar

– Maintenance and operations cost for coal fired power is 0,010 euro/kWh

– Maintenance and operations cost for geothermal power is 0,015 euro/kWh due to a lower degree of economies of scale

Investment: 1,8 Million

euro per MW

Investment: 3,0 Million

euro per MW


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Although ultra deep drilling is difficult, it is not impossibleULTRA DEEP DRILLING

Depth (meter)

Project Water Earth Total

Tashen No. 1 Well 2006 China 8.408 8.408

Chuanke No.1 Well 2007 China 8.875 8.875

Kontinentale Tiefbohrprojekt (KTB) 1994 Germany 9.101 9.101

Knotty Head Well Gulf of Mexico 10.420

Kola Peninsular - SG-3 1989 Russia 12.262 12.262

Depth (meter)

Project Water Earth Total

Tashen No. 1 Well 2006 China 8.408 8.408

Chuanke No.1 Well 2007 China 8.875 8.875

Kontinentale Tiefbohrprojekt (KTB) 1994 Germany 9.101 9.101

Knotty Head Well Gulf of Mexico 10.420

Kola Peninsular - SG-3 1989 Russia 12.262 12.262

Drilling rig Water Earth Total

PPL Shipyard - Deep Driller 1 2006 Singapore 9.140

Rig owned by Sinopec 2006 China 12.000

Discoverer Clear Leader 2009 Gulf of Mexico 3.658 8.534 12.192

Sevan Driller 2009 China 4.200 9.300 13.500

Drilling rig Water Earth Total

PPL Shipyard - Deep Driller 1 2006 Singapore 9.140

Rig owned by Sinopec 2006 China 12.000

Discoverer Clear Leader 2009 Gulf of Mexico 3.658 8.534 12.192

Sevan Driller 2009 China 4.200 9.300 13.500


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To reduce risk and optimise well flow rate a configuration with 3 doublets is proposed

PROPOSED CONFIGURATION

1000 m

10.000 m

ReservoirInjection wellProduction well

150 l/s 150 l/s

150 l/s 150 l/s

150 l/s 150 l/s


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Partner organisations are building a consortium and making preparations to execute the project

CURRENT STATUS

Partner organisations

– Grontmij

• Experience with engineering, designing and building geothermal power plants

• Ability to execute detailed engineering in various area’s

• Approx. 8000 professionals, active in many industries

– IF technology

• Subsurface and Geothermal engineering services

• Approx. 60 geologists, hydro-geologists, civil-, mechanical- and well engineers

– Well Engineering Partners

• Drilling and well engineering services

• Managing Directors have over 20 years of relevant Shell experience

– Bright Capital Partners

• Financial, tax and subsidy services

• Created financial structure and arranged financial funding for Q7 off shore windturbine park


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The consortium is preparing to approach potential investors and sponsors

Status

– Parties are building a consortium in order to realise an ultra deep project

– Project plan has been composed

– Location selection process has started

– Vision on reservoir engineering has been prepared

– High level plan on ultra deep drilling has been presented by Well Engineering Partners

– Contacts has been established with Dutch ministries of economic affairs (EZ) and environment (VROM)

CURRENT STATUS


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More information is available

General• A sense of urgency

– http://www.slideshare.net/mgankema/sense-of-urgency-climate-and-energy-issues• Comparing wind, solar, coal and geothermal power

– http://www.slideshare.net/mgankema/geothermal-power-financial-comparison• Ultra deep geothermal power – cheaper than coal

– http://www.slideshare.net/mgankema/geothermal-power-cheaper-than-coal

Technical• Ultra deep drilling *• Reservoir Engineering *• Seismic activity *• Production flow rates *• Determining very deep temperatures *

Financial• Business case *

* For these presentations please contact us* For these presentations please contact us


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For more information, feedback or questions, please contact us

Contact details

Mark Gankema Genter Str. 8, 50672 Cologne, Germany

Telephone: +49 (0)221 467 597 35Mobile: +49 (0)178 1969 963E-mail: [email protected]

Thank you very much for your attention!

Mark Gankema

December 2009Cologne, Germany

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Geothermal power - cheaper than coal

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