Role of royalties in sustainable geothermal energy development

Sam Malafeh and Basil Sharp

Energy Policy, 2015, vol. 85, issue C, 235-242

Abstract: Experience with geothermal development for electricity production has shown that use is not sustainable if heat from the reservoir is extracted too rapidly. Examples of unsustainable development are given. Policy aimed at achieving sustainable development at the very least should encompass conditions governing access to reservoirs, the rate at which thermal energy is extracted, monitoring, and re-injection of fluids. An economic model illustrates the application of fiscal instruments to geothermal development for electricity generation. Ad valorem royalties are shown to encourage utilisation of the resource in a more sustainable manner. A variable ad valorem royalty, based on the ratio of the current and original temperature shows a significant change in investment planning, with slower depletion, compared to the application of a non-variable ad valorem royalty.

Keywords: Geothermal; Policy; Property rights; Economics; Sustainability (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421515002414
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:85:y:2015:i:c:p:235-242

DOI: 10.1016/j.enpol.2015.06.023

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().