Optimal Timing of Geothermal Energy Extraction

Abstract

This paper is concerned with the optimal time to commence extraction of energy from a hot-water geothermal reservoir. economic models that we have presented in the past have the common characteristics that the extraction program starts immediately (see [l] and [2]). Based on this assumption, we determined optimal extraction strategies and planning horizons such that the present values of total profits were maximized. In this study we relax the requirement that extraction be undertaken immediately, seeking instead the delay in starting time that along with the other decision variables maximizes the present value of total profits over the economic life of the reservoir. Of course, optimal starting time, economic life of the reservoir, optimal extraction rate, and optimal injection temperature are interrelated, and therefore, we analyze their effect on the overall planning strategy simultaneously.