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Impact of technical and economic uncertainties on the economic performance of a deep geothermal heat system

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  • Daniilidis, Alexandros
  • Alpsoy, Betül
  • Herber, Rien

Abstract

This paper presents a techno-economic analysis of a deep, direct use geothermal heat system in a conductive geological setting (Groningen, NE Netherlands). The model integrates the previously discussed uncertainties of the initial reservoir state, geological and operational conditions with the economic uncertainties. These uncertainties are incorporated in the form of probability distributions and 20,000 iterations of the model are performed over a project lifetime of 40 years. A combination of Ex-Ante and Ex-Post criteria are used to evaluate the economic performance of the system based on the Net Present Value (NPV), Levelised Cost of Heat (LCOH) and Expected Monetary Value (EMV). The sensitivity analysis highlights the load factor (effective flowrate) as the most important parameter for the economic performance and energy costs. However, the differences between the NPV and LCOH sensitivities highlight the importance of using both metrics for the economic performance of such systems. The presented project remains economically challenging, exhibiting a 50% probability of marginal revenues over its lifetime. Systematic insights are drawn with regard to potential improvements of technical and economic aspects of such geothermal heat systems.

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  • Daniilidis, Alexandros & Alpsoy, Betül & Herber, Rien, 2017. "Impact of technical and economic uncertainties on the economic performance of a deep geothermal heat system," Renewable Energy, Elsevier, vol. 114(PB), pages 805-816.
    • Handle: RePEc:eee:renene:v:114:y:2017:i:pb:p:805-816
    DOI: 10.1016/j.renene.2017.07.090
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    19. Gascuel, Violaine & Rivard, Christine & Raymond, Jasmin, 2024. "Deep geothermal doublets versus deep borehole heat exchangers: A comparative study for cold sedimentary basins," Applied Energy, Elsevier, vol. 361(C).
    20. Galina S. CHEBOTAREVA & Wadim STRIELKOWSKI & Viktor A. BLAGININ, 2019. "The renewable energy market: Companies’ development and profitability," Upravlenets, Ural State University of Economics, vol. 10(3), pages 58-69, July.
    21. Knoblauch, Theresa A.K. & Trutnevyte, Evelina, 2018. "Siting enhanced geothermal systems (EGS): Heat benefits versus induced seismicity risks from an investor and societal perspective," Energy, Elsevier, vol. 164(C), pages 1311-1325.
    22. Dusseault, Bernard & Pasquier, Philippe, 2021. "Usage of the net present value-at-risk to design ground-coupled heat pump systems under uncertain scenarios," Renewable Energy, Elsevier, vol. 173(C), pages 953-971.
    23. Tomasz Topór & Małgorzata Słota-Valim & Rafał Kudrewicz, 2023. "Assessing the Geothermal Potential of Selected Depleted Oil and Gas Reservoirs Based on Geological Modeling and Machine Learning Tools," Energies, MDPI, vol. 16(13), pages 1-19, July.
    24. Zhang, Sheng & Liu, Jun & Zhang, Xia & Wang, Fenghao, 2024. "Properly shortening design time scale of medium-deep borehole heat exchanger for high building heating performances with high computational efficiency," Energy, Elsevier, vol. 290(C).

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