The Geothermal Resource Clock – What’s the Time?

Abstract

Managing the time value equation is key to generating better value from a geothermal project. This paper explores timelines for the development of geothermal resources. Various case studies identify the timelines that have been achieved on geothermal projects at Ohaaki and Ngatamariki in New Zealand, and Southern Negros and Tiwi in the Philippines. Material is presented on ways to streamline the geothermal exploration and development processes considering the economic time value equation. Too long and the business case is not robust enough, too short and the information for decision making likely contains gaps that could be crucial to a robust project. Key to timely geothermal resource development is a structured decision schedule that progressively refines the project viability. Establishing a core team who drive the process with a clear understanding of the bounding parameters and the information requirements at each decision step is essential. Relevant expertise applied in a way that appropriately considers risk is important. The information capture around the geothermal resource must focus on characterisation of the energy production aspects of the resource and the development of robust reservoir simulation models to assist in determining plant capacity from scenario modelling. This is an aspect which a number of the older facilities were unable to benefit from as these modeling techniques were not available having only been developed since the mid 1980’s. Timely peer review will assist in increasing the robustness of the decision making, decreasing risk that might otherwise be present. The case studies identify that the time taken from commencing exploration to energy production from a facility is of the order of ten years with four or five years taken from the commencement of serious exploration drilling until commencement of energy production. The high level activity schedule developed suggests seven years is possible from commencing exploration to having a facility producing energy.