Techno-economic assessment of repurposing oil & gas wells for Enhanced Geothermal Systems: A New Mexico, USA feasibility study

Abstract

Enhanced Geothermal Systems (EGS) produce renewable power that can complement variable renewable sources such as wind and solar, but EGS is expensive to deploy due to high cost of drilling geothermal wells. Repurposing abandoned or declining oil and gas wells for use in EGS is one option that can lower project capital costs by making use of existing wells and infrastructure. We assess the feasibility of this option using an oil and gas well database for the state of New Mexico. We begin by defining physical and geographic criteria for selecting existing wells suitable for EGS. We then identify clusters of nearby wells that could support separate EGS projects. Finally, we use the National Renewable Energy Laboratory’s System Advisor Model to estimate the performance and costs of these potential projects. Through our analysis, we find that 543 existing oil and gas wells in the state, comprising 0.4 % of the total number of oil and gas wells drilled in New Mexico, could be used to form 113 EGS projects with a cumulative generating capacity of 361 MW. The modeled Levelized Cost of Electricity of the repurposed EGS projects was 31–70 % lower than that of identical projects using newly drilled wells at the same locations, with the most cost-effective projects having the highest number of wells that can be clustered for higher power output. A major reason for the relatively low number of suitable wells is that oil and gas reservoirs are typically located in cooler geothermal systems, constraining harvestable energy and conversion efficiencies. Nonetheless, potential EGS projects drawing upon fewer existing wells still produce significant heat energy even if it is not enough to generate electricity, so exploring other ways this energy might be used economically is important. The method we present for assessing first-order feasibility and costs of well repurposing for EGS can be applied to any oil- and gas-producing region to identify well clusters where additional site-level investigations are warranted.