Australian Geothermal August 2009
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Australian Geothermal August 2009

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Geothermal Energy and Australian Possibilities

Geothermal Energy and Australian Possibilities

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Australian Geothermal August 2009 Australian Geothermal August 2009 Presentation Transcript

  • David Zajdlewicz – Energy Project Developer
    My On Going Search For green Field Geothermal Projects...&Australian Geothermal Possibilities
  • disclaimer
    This presentation contains statements that are subject to risk factors associated with geothermal businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions that could cause actual results or trends to differ materially. These include but are not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.
  • I’m On A Mission looking FOR Green Fields Geothermal projectS...
    Heated Ground on Vanua Lava
    Lopevi in 2002
    Me in a 1911 Lava tube on Savi’i
    A derailed holiday looking at geothermal systems...
    Now lets look at some Australian Geothermal possibilities....
    A Basaltic Lava Flow from 1911 – Savi’i
    View slide
  • Australian Geothermal Possibilities
    Classification
    Size of the Industry
    ~50 companies
    10 listed – ea. ~5M Cash
    ~3 X > 10 M Cash
    1 X > 100 Million
    57M + 34M in government funding
    “Small but ambitious”
    ~ 1B AUD work program
    385 tenements
    Exists
    Limited Information
    Do not Exist
    Classification System (Nicholsons 1993)
    Apart from then technical challenges of EGS there is a big commercial problem for these ambitious companies...
    View slide
  • Australia Has Low Cost Electricity – to0 much Coal – The 2008 Pool Price was ~54 AUD/Mwh
    (Gapminder 2009)
    So with technical and commercial challenges why are their 10 listed Australian geothermal companies ...
  • EGS & HSA Geothermal Maybe Possible In Australia AS Power Prices Are Expected to Rise
    Power prices may rise in the next decade (or longer) due to the Australian government/society attempts to introduce new legislation aimed at reducing and eliminating domestic coal power generation and CO2 emissions in the long run.
    The two “proposed schemes” are:
    The Emissions Trading Scheme (ETS) – allows parties to trade carbon credits between carbon reducing and emitting parties under federal reduction target – Has failed its first reading in the parliament.
    The Renewable Energy Target (RET)– Mandates that power users purchase 20% renewable power by 2020 and provides a market between renewable generators and energy users via renewable credits – Passed 2nd reading passed the upper house yesterday the 19th of August 2009.
    In the long run the ETS renders the RET redundant as a single market price for fossil fuels and renewable fuels results and fossil fuels are priced including the CO2 emissions externality as a cost.
    A simplified interpretation Australia Commonwealth Government policy (2009)
  • Hence the Australian Geothermal DRIVERS Today ARE...
    Large hot granite “resource” potential underlying large sections of the continent (Geoscience Australia 2009)
    Societal pressure to reduce reliance on coal power generation which “may increase power prices in the long run”
    This societal pressure is strong but not confident – 55% of Australia’s currently support the ETS (Australian Broadcasting Commission 2009)
  • AUSTRALIAN Geothermal “the NEXT 5 years”
    EGS appears uncertain and is not likely to be commercial inside 10 years:
    The MIT (2007) suggest > 10 years before commercial – technical advances are required
    Geodynamics (2008) has shown Australia has some advantages and is pursuing its proof of concept project – not without difficulties
    Jim Lawless (SKM 2009) –stated no one really knows when EGS will make a commercial contribution
    HSA projects are not clearly a profitable venture today in Australia, however technology does not need to make transformational advances
    HSA is classified as a hot water system - Temperatures in a range of 120 to 160 C (Pannax 2009).
    Power prices will need to appreciate in real terms for these asset to be economic (MclannanMagasanik Associates 2009)
    As EGS is highly uncertain, I will now focus on HSAs as they “may” have a chance of being commercial by ~2015 ...
  • THE Conceptual MODEL for Hot Sedimentary Aquifers (HSA)
    There are hot water sedimentary (sandstone) systems heated by underlying basement and insulated by high thermal gradient coals and shales.
    Insulating Layer with high thermal gradient
    (Petrotherm 2009)
  • Australian HSA what IS “Currently” Holding it Back...
    A commercial reality - energy prices are currently too low:
    Panax, Petrotherm, GeothermEx & MMA (2009) have all stated HSA costs for power between 80 – 100 AUD/MWh -> Current prices are 54 AUD/MWh grid connected.
    “The main assumption is well rates >100 and <200 kg/s, which with a binary plant and hot water geofuilds means ~3 – 6 Net MWe per well”
    Power prices are changing this weeks 20% RET is expected to increase effective renewable power prices to ~100AUD/MWh (MMA 2009)
    Some technical Uncertainties/Constraints Include:
    Downhole pump capacity limitations
    Ability to find high permeability and porosity at depth in an economic manner during exploration and appraisal
    Air cooled Binary Plants with high day time temperatures v higher day time demand power prices
    Maintain tight reservoir pressure control and minimising cool injection fluid returns.
    Lets now look at a selection of technical issues for HSA...
  • HAS Question 1 – Does Permeability and Porosity Exist at depths of 3 – 5km
    The likely k and Φ at depth based on oil and gas experience:
    (Ehrenberg 2005)
  • HSA WELLBORE HYDRAULICS
    Considered the following scenario:
    Reservoir Feed Zone at 3500m
    Reservoir Temperature 140C
    Wellbore Delivery Pressure 4.6 Bara
    Set to maintain single liquid phase to avoid wellbore deposition and dealing with 2 phase fluids in the binary plant heat exchanger (Aksoy 2007)
    Completion Design per diagram
    Darcy’s Law for radial wellbore flow
    Skin factor = 0
    Hydrostatic Reservoir Pressure
    Wellbore Roughness Factor = 0.045mm
    Reservoir Thickness = 500m
    Permeability = 40 md - P50 - Ehrenberg (2005)
    Pure Water Properties
    (Panax 2009)
  • Question 2: What Temperature (T) Loss Will OCCUR in THE WellBORE?
  • Question 3: What IS the Permeability Impact?
  • Question 4: What FEEDZONE Temperature (T) RUnDOWN Impacts FLOW RATE?
  • Question 5: What Reservoir Pressure DRAWDOWN Impacts FLOW RATE?
  • There IS CLEARLY A NEED FOR DownHOLE PUMPS TO MAXIMISE WELL DELIVERY
    As shown, downhole pumps are needed, due to lower than economic flowrates resulting from:
    Eventual reduced feed zone temperatures
    Possible reduced reservoir pressure from ineffective pressure control via injection
    Eventual need to exploit lower permeability regions a the reservoir, or a ability to find relatively high permeability
    However electronic submersible pumps (ESP) are currently built for the oil industry, therefore capacities of >100 l/s are not commercially available.
    Baker Hughes largest commercial oump delivers 50m head at 80l/s [ModelESP1025 (Baker Hughes 2009)]
    Japanese R&D into this problem resulted in an ESP that delivered 50m head at 110 l/s during the late 1990s
    Further Investigation Required
    Need to speak directly with Schlumberger and/or Baker Hughes about this problem and their possible solutions
    Assessment of the impacts/costs of reducing well back pressure to increase well rates (ie wellbore flashing –deposition, plant design problems)
  • Binary PLANT Capacity IS low During The DAY – However Power Prices ARE HIGHEST DURING the Day
  • So where Does this Leave My Search For a Greenfields Geothermal Project
    Internationally I will keep an eye on:
    Indonesia and North America
    In Australia:
    Supportive of EGS though no direct involved yet...
    Wanting to understand the HSA opportunity in more detail
    My “current” opinion about Australian HSA geothermal projects is:
    “There is a possibility of commercial HSA projects inside 7 years – however energy policy remains the main uncertainty”
  • Questions
    “I hope to work with you in the future on greenfield geothermal projects”