Sustainable operation of geothermal power plants: why economics matters

Fynn V Hackstein,Reinhard Madlener

doi:10.1186/s40517-021-00183-2

Abstract

This paper, based on a novel hybrid techno-economic model for geothermal power plants with endogenized plant lifetime, investigates the economic feasibility of a sustainable exploitation of geothermal resources for electricity generation. To this end, standard terminology and classifications from the literature are reviewed, such as “sustainability”, “sustainable operation”, “renewability”, “recovery”, “recharge”, and “regeneration”. An illustrative conventional, convective high-enthalpy hydrothermal system is contrasted with an enhanced, conductive low-enthalpy petrothermal system. Furthermore, different (mostly geophysical) sustainable operation criteria for the use of geothermal energy are derived from the literature. The conditions for complying with these criteria are compared with the economic criteria of cost minimization (levelized cost of electricity, LCOE) and profit maximization (net present value, NPV), respectively, revealing differences that vary in intensity, particularly depending on the type of reservoir and their respective properties. For the two case studies, LCOE of 2.9 €-ct/kWh and 16.9 €-ct/kWh are found, which are further scrutinized by a detailed sensitivity analysis. The hydrothermal system, in contrast to the petrothermal system investigated, is found to be able to meet several of the sustainability criteria examined (extraction equals recharge, operating lifetime of 100 to 300 years), whereas economically optimal operation leads to excessive overexploitation in both cases, showing a distinct trade-off between profit maximization and sustainable operation that has not been discussed in the literature so far.

Highlights

To meet the challenges of climate change, renewable energy sources will have to replace fossil fuels at a massive scale well before the end of this century (Bauer 2014a: 27)
The conditions for complying with these criteria are compared with the economic criteria of cost minimization and profit maximization, respectively, revealing differences that vary in intensity, depending on the type of reservoir and their respective properties
The hydrothermal system, in contrast to the petrothermal system investigated, is found to be able to meet several of the sustainability criteria examined, whereas economically optimal operation leads to excessive overexploitation in both cases, showing a distinct trade-off between profit maximization and sustainable operation that has not been discussed in the literature so far

Summary

Introduction

To meet the challenges of climate change, renewable energy sources will have to replace fossil fuels at a massive scale well before the end of this century (Bauer 2014a: 27). The vast and ubiquitous energy stored in the earth’s interior offers an immense potential to which more attention should be paid (Mongillo et al 2010: 9). The heat and power generation from geothermal sources is continuously available and base-load capable, which is an important advantage over most other renewable energy sources (Zhang et al 2014: 788). Hackstein and Madlener Geotherm Energy (2021) 9:10 everywhere” (Barbier 2002: 56f ) because the heat stored in the bedrock is supplied both by radioactive decay within the rock and by the heat flow from the earth’s interior all around the world (Bauer 2014b: 7). With 16 G We of installed capacity in 2020 (Hutter 2020: 2), geothermal energy represents only a tiny share of world total electricity generation

Findings

Discussion

Conclusion