The Economics of Heat Mining- an Analysis of Design Options and Performance Requirements of Hot Dry Rock (HDR) Geothermal Power Systems

Abstract

A generalized economic model was developed to predict the breakeven price of HDR generated electricity. Important parameters include: (1) resource quality-- average geothermal gradient ("C/km) and well depth, (2) reservoir performance-- effective productivity, flow impedance, and lifetime (thermal drawdown rate), (3) cost components-- drilling, reservoir formation, and power plant costs and (4) economic factors-- discount and interest rates, taxes, etc. Detailed cost correlations based on historical data and results of other studies are presented for drilling, stimulation, and power plant costs. Results of the generalized model are compared to the results of several published economic assessments. Critical parameters affecting economic viability are drilling costs and reservoir performance. For example, high gradient areas are attractive because shallower well depths and/or lower reservoir production rates are permissible. Under a reasonable set of assumptions regarding reservoir impedance, accessible rock volumes and surface areas, and mass flow rates (to limit thermal drawdown rates to about 10?C per year), predictions for HDR-produced electricity result in competitive breakeven prices in the range of 5 to 9 cents/kWh for resources having average gradients above 5OoC/km. Lower gradient areas require improved reservoir performance and/or lower well drilling costs.