Optimal geothermal resource utilization — A holistic methodological framework

• Published in: Geothermics Vol. 123; p. 103117
• Main Authors: Bjornsson, Sigurdur, Juliusson, Egill, Davidsdottir, Brynhildur, Kristofersson, Dadi Mar
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.11.2024
• Subjects: Net present value maximization; Optimal geothermal utilization; Plant capacity; Stock model; Sustainable utilization; Stock model; Plant capacity; Optimal geothermal utilization; Sustainable utilization; Net present value maximization
• ISSN: 0375-6505
• DOI: 10.1016/j.geothermics.2024.103117

Geothermal resources contribute to transitioning from fossil fuels but can also be vital for local energy production and furthering social development. In this paper, a fundamental methodology for economic evaluation of high temperature geothermal resources, consisting of a constrained net present value maximization model where geothermal system dynamics are represented by a three-parameter stock model, is streamlined and solidified. Definitions of sustainable production from geothermal resources are also reviewed. They tend to be vague and unhelpful for organizing energy production. The goal should be to utilize the resource responsibly by maximizing overall net benefits in a holistic evaluation process where all relevant factors are considered. Two case studies based on full-physics model production simulations for Bjarnarflag geothermal area in Iceland reveal that appropriate production data for stock model calibration are vital to obtain realistic parameters which properly describe the geothermal reservoir and are useable within the framework. In general, the stock model fits better long-term production simulations from full-physics reservoir models which exhibit a production decline phase after a make-up well drilling phase compared to shorter more erratic series which are more likely to yield unrealistic parameter values, especially in terms of excessive recharge. Reservoir heat stock and electricity price are the most important determinants of optimal capacity and production path. Greater stock and higher prices lead to larger plant sizes. Rigorous inclusion of real-life resource uncertainty is needed for more accurate evaluation and practical application of the framework. A future article is in development addressing this need where the model is transformed to a stochastic optimization model, thereby expanding the framework towards a more holistic evaluation methodology. •Fundamental methodology for economic evaluation of geothermal resources.•Stock model used to incorporate resource dynamics.•The stock model must be calibrated with suitable production data.•Heat stock and electricity price fundamental determinants of optimal capacity.•Definitions of sustainable utilization from geothermal are vague and unhelpful.