Transcript Slide 1

HOT ROCKS: HOT DRY ROCK GEOTHERMAL TECHNOLOGY MODELING AND ANALYSIS
UNIVERSITY OF
PENNSYLVANIA
DEPARTMENT OF
ELECTRICAL AND
SYSTEMS ENGINEERING
ABSTRACT
There is great interest in the
development of electric power generation using
renewable sources of energy given the monetary and
environmental costs associated with fossil fuels. Hot
Dry Rock (HDR) technology generates electricity by
pumping high-pressure water deep into the earth
which is then extracted at very hot temperatures and
converted into electricity. HDR technology provides a
novel approach to geothermal energy production
because, rather than using a pre-existing underground
reservoir, the high-pressure water that is injected into
the earth is able to fracture rocks and create new
reservoirs. This technology provides immense promise
in meeting the growing energy needs of the world
while having zero emissions and drawing on a nearly
ubiquitous resource.
HOT DRY ROCK TECHNOLOGY
Hot Dry Rock technology is a type
of geothermal power production that harnesses heat from
super-hot rock several kilometers underground to produce
electricity. Unlike traditional geothermal power production
methods, which require a pre-existing underground
reservoir, hot dry rock technology uses external water
injected at high pressures to create reservoirs. The creation
of the reservoir is a result of the differences in pressure
and temperature between the hot rock and cool water.
When the two come into contact, tiny cracks, or fractures,
occur within the rocks, increasing the surface area of the
rock that the water comes in contact with. Over time, given
constant pressure, a large reservoir can be created that
remains relatively constant in size.
HOT DRY ROCK SYSTEM DIAGRAM
HISTORY OF FENTON HILL
The first full-scale attempt to explore Hot Dry Rock as a
potentially viable heat extraction resource was undertaken at
Fenton Hill, New Mexico in 1971 by the Los Alamos National
Laboratories. Under the supervision of the Department of
Energy’s (DOE) Geothermal Division, the Fenton Hill project
lasted over 25 years and was partitioned into two main phases of
field tests. A third phase of the project only reached preliminary
status. During Phase I, which took place from 1974 – 1980, two
wells were drilled to 3 km where the rock was 200°C. Phase II
took place from 1980 – 1990 during which time two additional
wells were drilled to more than 4 km, with the cost escalating from
$1-2 million dollars to a range of $7-11 million. The Phase I and
II wells were each two-well systems (one injection well and one
production well), although the increased depth also increased the
extraction temperature to 300°C.
In 1990, a larger facility for long-term flow testing was
constructed, including the addition of a heat exchanger and large
capacity water and injection pumps. Unfortunately, however, by
this time, the Fenton Hill project had became severely
underfunded. As a result, the reduced funding meant that the
HDR team couldn’t perform necessary upgrades and further
testing. By the end of the 1990’s, support for the Fenton Hill
project waned and was later decommissioned by 2000.
HOT DRY ROCK FLOW DIAGRAM
The team worked with a group of investors and
experts in the field to model and assess the technical
and financial feasibility of a five megawatt, $35 million
HDR power plant. The plant will be installed in
Fenton Hill, New Mexico and will utilize three wells,
each at over 12,000 feet deep.
Geothermal (HDR)
AUTHORS
Aaron Jungstein EE ’09
Dan Lindholm EE ’10
Kyle Wang SSE ’09
Jennie Xue SSE ’09
ADVISOR
Dr. Tom Cassel
DEMO TIMES
Thursday, April 23, 2009
10:00, 10:30, 11:00, 2:30
Net Income
Assumptions
2032
$
(2, 650)
20, 000
Assumptions
0. 10 $/ kwh
$
(2, 650)
90.0%
Exit Year
-265046.1%
2016
2020
2024
2028
2032
Equi ty Investment
15,000
17,500
20, 000
22,500
25,000
$ (14,156) $ (12,722) $ (12, 277) $ (11,849) $ (11,437)
$ (12,078) $ (10,676) $ (10, 168) $ (9,686) $ (9,227)
(8,522) $
(6,020) $
(3,552) $
(8, 065) $
(5, 729) $
(3, 498) $
(7,635) $
(5,454) $
(3,435) $
(7,231)
(5,193)
(3,365)
Ini tial Pricing Capacity Factor
-265046.1%
85. 0%
87.5%
0.11 $/kwh $ (2,076) $ (1,078) $
0.12 $/kwh $
(152) $
902 $
90.0%
(81) $
1, 957 $
92.5%
916 $
3,011 $
95. 0%
1,914
4,065
3, 994
6, 032
8, 069
5,105
7,199
9,293
0.13 $/kwh
0.14 $/kwh
0.15 $/kwh
$
$
$
$
$
$
(9,777)
(7,009)
(4,236)
1,773
3,697
5,621
$
$
$
$
$
$
2,883
4,864
6,845
$
$
$
$
$
15
(13,023)
(11,817)
(10,497)
(9,048)
(7,459)
$
$
$
Assumptions
0.0%
$
(2, 650)
20
Depletion
Useful Life
-265046.1%
10
-4% $ (11,782)
-3% $ (10,930)
-2% $ (10,018)
-1% $ (9,040)
0% $ (7,993)
Assumptions
5 hrs
$
(2, 650)
5 KW
Net Output
Peaking Hours per Day
-265046.1%
4.0
4.5
3. 0 $ (7,631) $ (4,129) $
4. 0 $ (7,316) $ (3,774) $
$
$
$
(7,000)
(6,684)
(6,369)
$
$
$
$
$
$
$
$
20
(13, 539)
(12, 083)
(10, 459)
(8, 642)
(6, 607)
$
$
$
$
$
$
$
$
5. 0
(589) $
(195) $
(3,419) $
(3,064) $
(2,709) $
200
594
989
$
$
$
25
(13,646)
(12,024)
(10,187)
(8,100)
(5,342)
$ 6,215
$ 8,366
$ 10,517
$
$
$
$
$
30
(13,753)
(12,043)
(10,089)
(7,844)
(4,544)
5.5
2,951
3,385
$
$
6.0
6,491
6,964
3,819
4,253
4,687
$
$
$
7,438
7,911
8,385
MONTE CARLO SIMULATION
Geothermal (Hydrothermal)
Wind
Natural Gas
Coal
Nuclear
Solar
$0.00
After modeling the technical
factors of the plant, the team built a complex financial
model and performed Monte Carlo simulations to
compute feasibility using repeated random variable
sampling. Two feasibility measures are outputted,
including internal rate of return and net present value
of both the cash flows and the net income. The results
indicate that a commercial HDR plant at Fenton Hill
may be technically feasible, but the financial returns
may not be attractive,GROUP
given today’s
10 environment.
NET PRESENT VALUE
5. 0
6. 0
7. 0
Electricity Prices Per Kilowatt-hour
Source: Geothermal
Explorers Ltd., 2003
FINANCIAL MODEL RESULTS
$0.02
$0.04
$0.06
$0.08
Price per kWh
$0.10
$0.12
$0.14
$0.16
$0.18
Source: U.S. Department of Energy
Source: Don Brown & Dave Duchane, Los Alamos National
Laboratories, 1993
Hot Dry Rock technology involves
a closed loop system so that the water used can be
continually recycled (see diagram). The water is pumped
deep into the ground through an injection well, and when
the water comes into contact with the hot rock, it is heated
to temperatures upwards of 200°C or higher. The water is
extracted through one or more production wells, and then,
when above ground, the geothermal fluid flows through a
heat exchanger and is then injected back through the
injection well. The main purpose of the heat exchanger is
to transfer the thermal energy into a working fluid, such as
ammonia, that immediately vaporizes upon being heated.
This high-pressure ammonia steam is used to drive a
turbine that produces electricity. The steam is then cooled
down back into its liquid state thus completing the cycle of
the working fluid (see diagram). Approximately 7% of the
water is lost throughout this process; therefore, additional
water must be injected from an external watery supply in
order to make up for this difference.
FINANCIAL MODEL
RECOMMENDATIONS
Based off of net present value (NPV) and internal rate of return
(IRR) calculations, the investment in a 5 MW hot dry rock power plant in
Fenton Hill, New Mexico does not yield strong positive results, especially
given the experimental nature of the technology. Through the Monte
Carlo simulations, a random variable sampling process was used to
calculate NPV and IRR results. The net present value for the project
centered around -$7.8 million, whereas the internal rate of return
calculations averaged 3.6%.
It is important to know the dynamic capabilities of the model can
be adapted to different scenarios and sets of assumptions. The
assumptions we used were based on extensive research and technical
modeling performed by the team.
We believe there is great potential for investors and for society as a
whole, given more favorable externalities, such as government subsidies
and easier access to sources of capital. Under these conditions, this
financial model is one tool that will allow society to realize the prospects
of this untapped energy source.