Geothermal power -  financial comparison
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Geothermal power - financial comparison

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Looking at the investment per effective MW, geothermal energy is a very attractive investment....

Looking at the investment per effective MW, geothermal energy is a very attractive investment.

In terms of investment per MW-peak, geothermal energy seems not to be especially attractive. However, utilization must also be considered. Taking utilization into account, geothermal energy is a very attractive investment.

Finally, the period after economic life makes geothermal energy really attractive.

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  • Full Name Full Name Comment goes here.
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  • Good Morning Mark,
    Congratulations for this really smart presentation your indicator investment per effective MW/ availability in % ranks (millions €/ MW): Geothermal Sauerlach (D) 3,6 Geothermal Landau (D) 5,9 Wind 6,7 (UE) SolarPV (UE) 34,7 that should convince investors that geothermal electricity is the number one - when geology is OK - to supply base load electricity (more then 75/80 to 99% 24/24h). Thanks for your time on the phone and keep in touch. A sunny day to all readers. At your service to improve any initial situation...
    Cordially,
    HM
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  • Hola Mark,
    Good analysis, very helpful and concise. Have you include the run-off river hydropower to your economic benchmarking of geothermal power against other non conventional renewable energy.
    Rgds,
    Enrique
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Geothermal power -  financial comparison Geothermal power - financial comparison Presentation Transcript

  • Geothermal power - Financial comparison with wind, solar and coal - 2 December 2009 Mark Gankema Version 3
  • HOW DOES GEOTHERMAL POWER WORK By drilling deep wells (>3000 m) thermal energy from the earth is converted into electrical power 1. After drilling wells (>3000 m) hot water (>160 ºC) is pumped up from deep earth levels 3. 2. With a heat exchanger, turbine and 2. generator, electricity is generated 3. The remaining energy can be used for heating buildings, greenhouses or community swimming pools Proven technology: Geothermal power stations are already running 1. for decades in for example Iceland, USA and Germany (~ 20 plants) Diagram source: www. geox-gmbh.de 3 December 2009 Geothermal power – financial comparison – version 3 2
  • ADVANTAGES Geothermal power has superior advantages over wind turbines, solar energy and coal/gas-fired power plants Advantages of geothermal power - compared to other methods Wind turbines Solar panels Coal/gas power plants Wind turbines Solar panels Coal/gas power plants • Average capacity utilisation is • Average capacity utilisation is • Environmentally unacceptable • Average capacity utilisation is • Average capacity utilisation is • Environmentally unacceptable only 40% as the wind speed only 15% as there is no light levels of CO2 emissions only 40% as the wind speed only 15% as there is no light levels of CO2 emissions varies over time during the night and due to varies over time during the night and due to • With the rapid growth of far sub-optimal light conditions • With the rapid growth of far • Full backup capacity in the sub-optimal light conditions East economies, significant • Full backup capacity in the East economies, significant system is needed in case there • Backup capacity in the system cost increase of coal/gas in the system is needed in case there • Backup capacity in the system cost increase of coal/gas in the is no wind is needed for night hours near future (5-10 years) is no wind is needed for night hours near future (5-10 years) • When wind speed and output is • Huge pieces of land are needed • Insufficient supply of coal/gas • When wind speed and output is • Huge pieces of land are needed • Insufficient supply of coal/gas high, market is flooded with (avg. 18 ha / / effective MW) (avg. 18 ha effective MW) on the long term (30-50 years) high, market is flooded with on the long term (30-50 years) large supply, dropping market large supply, dropping market • Investment per effective MW is • Fuel costs are additional costs price per kWh • Investment per effective MW is • Fuel costs are additional costs price per kWh high high • Dependency on international • Investment per effective MW is • Dependency on international • Investment per effective MW is coal/gas markets high coal/gas markets high 3 December 2009 Geothermal power – financial comparison – version 3 3
  • FINANCIALS In terms of investment per MW-peak, geothermal energy seems not to be especially attractive … Investment per MW Average utilisation [mln euro / MW] [%] 80% 80% 4,8 4,7 2,9 2,7 40% 15% Wind Solar Geothermic Geothermic Wind Solar Geothermic Geothermic Landau Sauerlach Landau Sauerlach … however, utilisation must also be considered … however, utilisation must also be considered 3 December 2009 Geothermal power – financial comparison – version 3 4
  • FINANCIALS Taking utilisation into account, geothermal energy is a very attractive investment Investment per effective MW [mln euro / MW] 34,7 6,7 5,9 3,6 Wind Solar Geothermic Landau Geothermic Sauerlach Investment per effective MW = Investment per MW-peak x Average utilisation 3 December 2009 Geothermal power – financial comparison – version 3 5
  • ADVANTAGES Looking at the investment per effective MW, geothermal energy is a very attractive investment Investment per MW Average utilisation [mln euro / MW] [%] 80% 80% 4,8 4,7 2,7 2,9 x/y 40% 15% Wind Solar Geotherm ic Geotherm ic Wind Solar Geotherm ic Geotherm ic Landau Sauerlach Landau Sauerlach Investment per effective MW [mln euro / MW] 34,7 = 6,7 5,9 3,6 Wind Solar Geothermic Geothermic Landau Sauerlach 3 December 2009 Geothermal power – financial comparison – version 3 6
  • FINANCIALS Nobody can predict future coal prices, though recent history shows that prices can easily triple Historical coal prices Coal price NYMEX [$/ton] ‘Every month 3 coal-fired plants are opened somewhere in China’ 160 New York Times, 11 June 2006 140 actual 120 Coal price forecast based on 100 5 year linear trend 80 5 year linear trend ? Year Year $$/ /ton ton 60 2010 2010 84 84 40 2020 2020 139 139 20 2030 2030 193 193 0 2006 2007 2008 2009 For our analysis we will use three prices: $50, $100 and $150 For our analysis we will use three prices: $50, $100 and $150 3 December 2009 Geothermal power – financial comparison – version 3 7
  • FINANCIALS Depending on future coal prices and geothermal parameters, geothermal energy can compete with coal-fired power Cost comparision [euro/kWh] 0,086 0,080 - 0,069 0,053 0,050 0,053 0,033 - 0,017 0,070 0,043 0,026 0,026 0,026 0,010 0,010 0,010 0,010 0,010 Coal 50 $/ton Coal 100 $/ton Coal 150 $/ton Geothermic Geothermic Landau Sauerlach Maintenance & operation Capital Fuel 3 December 2009 Geothermal power – financial comparison – version 3 8
  • FINANCIALS The period after economic life makes geothermal energy really attractive Year 1 – 20 Year 21 – 30/50 (?) Economic life: including capital cost After economic life: no capital cost, (depreciation + interest) investment has been written-off 0,086 0,080 - 0,069 0,060 0,050 0,053 0,053 0,033 - 0,043 0,017 0,070 0,050 0,043 0,027 0,033 0,026 0,026 0,026 0,017 0,010 0,010 - - - - - 0,010 0,010 0,010 0,010 0,010 0,010 0,010 0,010 0,010 0,010 Coal 50 Coal 100 Coal 150 Geothermic Geothermic Coal 50 Coal 100 Coal 150 Geothermic Geothermic $/ton $/ton $/ton Landau Sauerlach $/ton $/ton $/ton Landau Sauerlach 3 December 2009 Geothermal power – financial comparison – version 3 9
  • More information General • A sense of urgency – http://www.slideshare.net/mgankema/sense-of-urgency-climate-and-energy-issues • Comparing wind, solar, coal and geothermal power – http://www.slideshare.net/mgankema/geothermal-power-financial-comparison • Ultra deep geothermal power – cheaper than coal – http://www.slideshare.net/mgankema/geothermal-power-cheaper-than-coal Technical • Ultra deep drilling * • Reservoir Engineering * • Seismic activity * • Production flow rates * • Determining very deep temperatures * Financial • Business case * **For these presentations please contact us For these presentations please contact us 3 December 2009 Geothermal power – financial comparison – version 3 10
  • For more information, feedback or questions, please contact us Contact details Mark Gankema Genter Str. 8, 50672 Cologne, Germany Telephone: +49 (0)221 46759735 mobile: +49 (0)178 1969963 E-mail: mgankema@gmail.com Thank you very much for your attention! Mark Gankema December 2009 Cologne, Germany 3 December 2009 Geothermal power – financial comparison – version 3 11