Скачать или смотреть 50th Stanford Geothermal Workshop & Economic Considerations of Geothermal

Economics of Geothermal and the Diagenesis of Granites
by Magnet Geological (magnetgeological.com)
If someone had told me 40 years ago that I would be listening to talks essentially about the “diagenesis of granites and basalts” I would have fallen off my chair in sedimentology class! The 50th annual Geothermal Workshop at Stanford last week was good, very busy, well attended. The dissolution and reprecipitation of silica in granitic geothermal reservoirs just brings a smile to my face! The appropriate phrase is “hydrothermal alteration process,” or “metamorphic alteration” but, for reservoirs, I like diagenesis better!

Post conference I started building my geothermal economic evaluation tool. One of the things that crops up in science economics is the phrase, or use, that the value is highly determinative by the discount rate. It is very important to remember that the discount rate is a reflection of the investor’s financial circumstances, risk profile, and opportunity costs and not a direct statement about the project’s intrinsic value.

Often, financial experts may not fully grasp the underlying science, while scientists might overlook the subtleties of economic evaluation. Solid, rigorous science is essential for determining a project's intrinsic value, whereas the discount rate serves as a tool for comparing investment options within a single framework. I recommend selecting a consistent discount rate—typically between 5% and 10%—so you focus on the asset's true value rather than how different companies might perceive it. After you get to a site-specific or company specific parameters then think about a tweak to the discount rate.

Hotter and deeper is harder! Geothermal wells were divided into 16 different groupings based primarily on temperature, reservoirs, and production systems. Remember for a geothermal system to work, you need a difference in temperature when your fluid surfaces. Iceland is fantastic. Compared to Texas, Iceland is cold and has very hot magma at the surface and near surface. A lot of temperature difference with a small depth. The hottest regions are referred to as “high enthalpy.” Basically, this means an increase in “energy density.” More heat, more pressure, more density. Think of reservoirs in the range of 500 Celsius, which is above the critical point of water.

The ultimate goal or general thinking is to get to these deep, hot areas with the highest enthalpy. However, this is a very expensive process and there is an uncertainty about the science, what is going to happen with the geochemistry and geophysics of the super-hot reservoirs? What happens to the fractures, do they shrink with cooling or fill up with precipitation of silica or calcite? And if you acidize the calcite, how will that affect the clay mineralogy and stopping up the fractures?

In the economic evaluations, I don’t consider these types of risks, they need to be dealt with outside of the evaluations. Because deeper and hotter is harder, they cost more and the capex and opex cost more which adversely affects the economics of the high enthalpy projects – think of the concept of “a rush to be second,” might be relevant here.


In comparing open-loop and closed-loop systems, open-loop configurations—where water is actively circulated from one well to another through a permeable network of fractures—offer superior heat transfer due to enhanced advective and convective flow. This efficiency largely depends on factors such as the number of fractures and their surface area, which promote greater fluid movement and heat exchange. In contrast, closed-loop systems do not circulate water through the reservoir itself; while they are simpler and encounter fewer operational challenges, they typically provide lower heat transfer efficiency.

Currently, evaluations suggest the best investments seems to be in the mid-range temperatures, think of 100 to 150 Celsius. This is closer to a conventional system for us, lower capex and opex. This is probabilities on probabilities, but, the probability of risk is probably lower – fewer problems with fractures in the mid-range temperatures. Thermal declines might increase, but perhaps there are some mitigations for that in the right areas. Think about how you can reduce thermal decline rate.

Economics was based on initiating a project, a two well system – two closed loop wells or an injection – recovery pairing. After development and 5 years of operations then resell the project at a specific cap rate based on the following year’s income. After going through the science and optimizing the resource at current development prices, the profitability then becomes a function of the price of electricity. Is it $15/MWh or $115/MWh? The suggestion would be to start with the electricity price, what type of a Power Purchase Agreement (PPA) would you have?