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Role of royalties in sustainable geothermal energy development

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  • Malafeh, Sam
  • Sharp, Basil

Abstract

Experience with geothermal development for electricity production has shown that use is not sustainable if heat from the reservoir is extracted too rapidly. Examples of unsustainable development are given. Policy aimed at achieving sustainable development at the very least should encompass conditions governing access to reservoirs, the rate at which thermal energy is extracted, monitoring, and re-injection of fluids. An economic model illustrates the application of fiscal instruments to geothermal development for electricity generation. Ad valorem royalties are shown to encourage utilisation of the resource in a more sustainable manner. A variable ad valorem royalty, based on the ratio of the current and original temperature shows a significant change in investment planning, with slower depletion, compared to the application of a non-variable ad valorem royalty.

Suggested Citation

  • Malafeh, Sam & Sharp, Basil, 2015. "Role of royalties in sustainable geothermal energy development," Energy Policy, Elsevier, vol. 85(C), pages 235-242.
    • Handle: RePEc:eee:enepol:v:85:y:2015:i:c:p:235-242
    DOI: 10.1016/j.enpol.2015.06.023
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    References listed on IDEAS

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    Cited by:

    1. Nadkarni, Kabir & Lefsrud, Lianne M. & Schiffner, Daniel & Banks, Jonathan, 2022. "Converting oil wells to geothermal resources: Roadmaps and roadblocks for energy transformation," Energy Policy, Elsevier, vol. 161(C).
    2. Joseph Oyekale & Mario Petrollese & Vittorio Tola & Giorgio Cau, 2020. "Impacts of Renewable Energy Resources on Effectiveness of Grid-Integrated Systems: Succinct Review of Current Challenges and Potential Solution Strategies," Energies, MDPI, vol. 13(18), pages 1-48, September.
    3. McClean, A. & Pedersen, O.W., 2023. "The role of regulation in geothermal energy in the UK," Energy Policy, Elsevier, vol. 173(C).
    4. Melikoglu, Mehmet, 2017. "Geothermal energy in Turkey and around the World: A review of the literature and an analysis based on Turkey's Vision 2023 energy targets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 485-492.
    5. Xue, Zhenqian & Ma, Haoming & Wei, Yizheng & Wu, Wei & Sun, Zhe & Chai, Maojie & Zhang, Chi & Chen, Zhangxin, 2024. "Integrated technological and economic feasibility comparisons of enhanced geothermal systems associated with carbon storage," Applied Energy, Elsevier, vol. 359(C).
    6. Wang, Yuqing & Liu, Yingxin & Dou, Jinyue & Li, Mingzhu & Zeng, Ming, 2020. "Geothermal energy in China: Status, challenges, and policy recommendations," Utilities Policy, Elsevier, vol. 64(C).
    7. Liu, Jian & Cheng, Wen-Long & Nian, Yong-Le, 2018. "The stratigraphic and operating parameters influence on economic analysis for enhanced geothermal double wells utilization system," Energy, Elsevier, vol. 159(C), pages 264-276.
    8. Liliana Topliceanu & Gabriel Petru Puiu, 2016. "Contribution of Geothermal Resources to Energy Autonomy: Evaluation and Management Methodology," Energies, MDPI, vol. 9(8), pages 1-16, August.
    9. Yong Jiang & Yalin Lei & Li Li & Jianping Ge, 2016. "Mechanism of Fiscal and Taxation Policies in the Geothermal Industry in China," Energies, MDPI, vol. 9(9), pages 1-20, September.
    10. Osman Özkaraca & Pınar Keçebaş & Cihan Demircan & Ali Keçebaş, 2017. "Thermodynamic Optimization of a Geothermal- Based Organic Rankine Cycle System Using an Artificial Bee Colony Algorithm," Energies, MDPI, vol. 10(11), pages 1-28, October.

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