Geothermal power - cheaper than coal

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With a new combination of existing technologies, we believe it is possible to create a renewable energy source –ultra deep EGS (Enhanced Geothermal Systems)– which is cheaper than coal.

The principle is simple: a higher temperature results in a better electricity conversion efficiency. So there is a double effect: a better conversion efficiency and the amount of available energy is higher. This double effect is stronger than the related cost of ultra deep drilling. Simple calculations demonstrate that ‘deeper is cheaper’.

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Geothermal power - cheaper than coal

  1. 1. Ultra deep geothermal power Renewable energy cheaper than coal 10 January 2010 Mark Gankema version 11 - summary
  2. 2. Contents • Summary • Advantages • The main principle • The ‘deeper is cheaper’ calculations • How cheap is coal? • Proposed configuration • Current status • Other information • Contact details 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 2 © Copyright M.E. Gankema – All rights reserved
  3. 3. With existing technologies a renewable energy source cheaper than coal can be created Summary With a new combination of existing technologies, it is possible to create a renewable energy source –ultra deep geothermal power– which is cheaper than coal. The concept has been verified by industry experts. The principle is simple. There is a double effect at higher temperature ranges: (1) a much better electricity conversion efficiency and (2) the amount of available energy is higher. This double effect is stronger than the related cost of ultra deep drilling. Simple calculations demonstrate that ‘deeper is cheaper’. To be cheaper than coal the investment per electrical MW needs to be less than 3,0 million euro. For attractive North-West European locations the investment per MW is expected to be 2,6 million euro. Of course deep drilling is not that simple. Major issues have been researched and analyzed. Satisfactory solutions have been found and validated by industry experts. A group of partner organisations –Grontmij, IF Technology, Well Engineering Partner and Bright Capital Partners– are building a consortium and making preparations to execute the project. Project management has over 10 years of experience in amongst others energy and engineering industry. 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 3 © Copyright M.E. Gankema – All rights reserved
  4. 4. ADVANTAGES Geothermal power has major advantages Advantage of geothermal power compared to wind and solar energy 1. Financially very attractive - potentially cheaper than coal 2. Indepent from wind and light conditions, power supply can be matched with demand 3. No need for storage facilities. In a sustainable economy based on wind and solar storage facilities will be necessary, these investments can be avoided 4. Supply can be close to the market, decentral generation is possible, no major transport infrastructure needed 5. No landscape pollution (apart from drilling rig during construction) 6. Little footprint, approx. 1 ha 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 4 © Copyright M.E. Gankema – All rights reserved
  5. 5. THE MAIN PRINCIPLE The temperature range determines significantly conversion efficiency and thus electricity output Electricity conversion plant efficiency 'heat-to-power' Super critical 30-35% Single/double flash 20-25% Binary 10-15% Most geothermal plants operate in this temperature range 100 200 300 400 500 Temperature (ºC) 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 5 © Copyright M.E. Gankema – All rights reserved
  6. 6. THE MAIN PRINCIPLE Due to conversion efficiency a double effect applies to electrical output power Thermal and electrical power 400 ºC – 147 MW thermal 200 ºC – 63 MW thermal 4x more 9 MWe electrical power 36 MW electric ‘a bigger cake and a larger piece of the cake’ Based on 1 production well with a flow rate of 100 l/s 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 6 © Copyright M.E. Gankema – All rights reserved
  7. 7. DEEPER IS CHEAPER MW capacity depends not only on temperature, also productivity index (PI) and reservoir size do matter Net capacity - Self flowing well Reservoir size = 5,0 km3 40 30 Net capacity (MW) PI=0,5 20 Capacity limit to avoid reservoir exhaustion Reservoir size PI=1 = 2,5 km3 10 PI=2 0 150 200 250 300 350 400 Temperature (ºC) 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 7 © Copyright M.E. Gankema – All rights reserved
  8. 8. DEEPER IS CHEAPER We used the most conservative estimate, a Well Engineers’ rule of thumb of 3000 euro/meter Drilling costs for geothermal wells 40 Rule of thumb 30 Costs (mln. $) 20 WellCost Lite model * 10 0 2.000 3.000 4.000 5.000 6.000 7.000 8.000 9.000 10.000 Depth (mete rs) * Source: ‘A comparison of geothermal with oil and gas well drilling costs’ by Chad Augustine, Jefferson W. Tester and Brian Anderson. 2006, Massachusetts Institute of Technology (MIT) 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 8 © Copyright M.E. Gankema – All rights reserved
  9. 9. DEEPER IS CHEAPER Investment per MW decreases with drilling depth Temperature Investment per MW - EGS Self flowing 35ºC/km gradient = 35ºC/km 10 PI=0,5 8 PI=1 (million euro/MW) 6 Cheaper than coal PI=2 benchmark 4 2,5 km3 2 5,0 km3 Limit due to reservoir size 0 Depth (meters): 7.000 8.000 9.000 10.000 Temperature: 255ºC 290ºC 325ºC 360ºC Total capacity: 17-41 MW* 35-53 MW* 63-69 MW* 89 MW* * Based on 4 injection + 5 production wells per power plant and reservoir size of 2,5 km3 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 9 © Copyright M.E. Gankema – All rights reserved
  10. 10. DEEPER IS CHEAPER For a temperature gradient of 40ºC/km, investments may be as low as 2,1 million euro per MW Temperature Investment per MW - EGS Self flowing 40ºC/km gradient = 40ºC/km 10 8 PI=0,5 (million euro/MW) 6 Limit due to reservoir size Cheaper than coal PI=1 benchmark 4 PI=2 2,5 km3 2 5,0 km3 0 Depth (meters): 7.000 8.000 9.000 10.000 Temperature: 290ºC 330ºC 370ºC 410ºC Total capacity: 31-53 MW* 58-72 MW* 96 MW* 126 MW* * Based on 4 injection + 5 production wells per power plant and reservoir size of 2,5 km3 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 10 © Copyright M.E. Gankema – All rights reserved
  11. 11. HOW CHEAP IS COAL Google’s ‘cheaper than coal’ investment benchmark is 3,0 million euro per MW electric Cost comparision [euro/kWh] Assumptions 0,054 0,054 – Coal price is 89 $/ton (January 2010) - – Investment life time is 20 years, both for coal and geothermal power 0,021 Investment: – Interest rate is 8% 0,039 3,0 Million – Investment for coal fired plant with CO2 euro per MW Investment: capturing facility is 1,8 million euro 1,8 Million – 1 euro is 1,40 dollar euro per MW 0,023 – Maintenance and operations cost for coal fired power is 0,010 euro/kWh 0,015 – Maintenance and operations cost for 0,010 geothermal power is 0,015 euro/kWh due to a lower degree of economies of scale Coal 89 $/ton Geothermal power Maintenance & operation Capital Fuel 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 11 © Copyright M.E. Gankema – All rights reserved
  12. 12. ULTRA DEEP DRILLING Although ultra deep drilling is difficult, it is not impossible Depth (meter) Depth (meter) Project Project Water Water Earth Earth Total Total Tashen No. 1 Well Tashen No. 1 Well 2006 China 2006 China 8.408 8.408 8.408 8.408 Chuanke No.1 Well Chuanke No.1 Well 2007 China 2007 China 8.875 8.875 8.875 8.875 Kontinentale Tiefbohrprojekt (KTB) Kontinentale Tiefbohrprojekt (KTB) 1994 Germany 1994 Germany 9.101 9.101 9.101 9.101 Knotty Head Well Knotty Head Well Gulf of Mexico Gulf of Mexico 10.420 10.420 Kola Peninsular --SG-3 Kola Peninsular SG-3 1989 Russia 1989 Russia 12.262 12.262 12.262 12.262 Drilling rig Drilling rig Water Water Earth Earth Total Total PPL Shipyard --Deep Driller 1 PPL Shipyard Deep Driller 1 2006 Singapore 2006 Singapore 9.140 9.140 Rig owned by Sinopec Rig owned by Sinopec 2006 China 2006 China 12.000 12.000 Discoverer Clear Leader Discoverer Clear Leader 2009 Gulf of Mexico 2009 Gulf of Mexico 3.658 3.658 8.534 8.534 12.192 12.192 Sevan Driller Sevan Driller 2009 China 2009 China 4.200 4.200 9.300 9.300 13.500 13.500 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 12 © Copyright M.E. Gankema – All rights reserved
  13. 13. PROPOSED CONFIGURATION To reduce risk and optimise well flow rate a configuration with 3 doublets is proposed 150 l/s 150 l/s 150 l/s 150 l/s 10.000 m 150 l/s 150 l/s 1000 m Injection well Reservoir Production well 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 13 © Copyright M.E. Gankema – All rights reserved
  14. 14. CURRENT STATUS Partner organisations are building a consortium and making preparations to execute the project Partner organisations – Grontmij • Experience with engineering, designing and building geothermal power plants • Ability to execute detailed engineering in various area’s • Approx. 8000 professionals, active in many industries – IF technology • Subsurface and Geothermal engineering services • Approx. 60 geologists, hydro-geologists, civil-, mechanical- and well engineers – Well Engineering Partners • Drilling and well engineering services • Managing Directors have over 20 years of relevant Shell experience – Bright Capital Partners • Financial, tax and subsidy services • Created financial structure and arranged financial funding for Q7 off shore windturbine park 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 14 © Copyright M.E. Gankema – All rights reserved
  15. 15. CURRENT STATUS The consortium is preparing to approach potential investors and sponsors Status – Parties are building a consortium in order to realise an ultra deep project – Project plan has been composed – Location selection process has started – Vision on reservoir engineering has been prepared – High level plan on ultra deep drilling has been presented by Well Engineering Partners – Contacts has been established with Dutch ministries of economic affairs (EZ) and environment (VROM) 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 15 © Copyright M.E. Gankema – All rights reserved
  16. 16. More information is available 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 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 16 © Copyright M.E. Gankema – All rights reserved
  17. 17. For more information, feedback or questions, please contact us Contact details Mark Gankema Genter Str. 8, 50672 Cologne, Germany Telephone: +49 (0)221 467 597 35 Mobile: +49 (0)178 1969 963 E-mail: mgankema@gmail.com Thank you very much for your attention! Mark Gankema December 2009 Cologne, Germany 10 Feb 2010 Geothermal power – cheaper than coal – version 11 summary 17 © Copyright M.E. Gankema – All rights reserved

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