Impact of technical and economic uncertainties on the economic performance of a deep geothermal heat system

Alexandros Daniilidis, Betül Alpsoy and Rien Herber

Renewable Energy, 2017, vol. 114, issue PB, 805-816

Abstract: This paper presents a techno-economic analysis of a deep, direct use geothermal heat system in a conductive geological setting (Groningen, NE Netherlands). The model integrates the previously discussed uncertainties of the initial reservoir state, geological and operational conditions with the economic uncertainties. These uncertainties are incorporated in the form of probability distributions and 20,000 iterations of the model are performed over a project lifetime of 40 years. A combination of Ex-Ante and Ex-Post criteria are used to evaluate the economic performance of the system based on the Net Present Value (NPV), Levelised Cost of Heat (LCOH) and Expected Monetary Value (EMV). The sensitivity analysis highlights the load factor (effective flowrate) as the most important parameter for the economic performance and energy costs. However, the differences between the NPV and LCOH sensitivities highlight the importance of using both metrics for the economic performance of such systems. The presented project remains economically challenging, exhibiting a 50% probability of marginal revenues over its lifetime. Systematic insights are drawn with regard to potential improvements of technical and economic aspects of such geothermal heat systems.

Keywords: Direct use geothermal; Economic uncertainty; Reservoir uncertainty; Heat; Probability; Techno-economic model (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:114:y:2017:i:pb:p:805-816

DOI: 10.1016/j.renene.2017.07.090

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