ECONOMIC CONSIDERATIONS

Geothermal projects require a relatively large initial capital investment, with small annual operating costs thereafter. Thus, a district heating project, including production wells, pipelines, heat exchan­gers, and injection wells, may cost several million dollars. In contrast, the initial investment in a fossil fuel system includes only the cost of a central boiler and distribution lines. The annual operation and

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ECONOMIC CONSIDERATIONS

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maintenance costs for the two systems are similar, except that the fossil fuel system may continue to pay for fuel at an ever-increasing rate, whereas the cost of the geothermal fuel is stable. The two systems, one with a high initial capital cost and the other with high annual costs, must be compared.

Geothermal resources fill many needs, including power generation, space heating, greenhouse heating, industrial processing, and bathing. Considered indi­vidually, however, some of the uses may not promise an attractive return on investment because of the high initial capital cost. Thus, one may have to consider using a geothermal fluid several times to maximize benefits. This multistage utilization, where increas­ingly lower water temperatures are used in successive steps, is called cascading or waste heat utilization. A simple form of cascading employs waste heat from a power plant for direct-use projects (Fig. 19).

Geothermal cascading has been proposed and successfully attempted on a limited scale throughout the world. In Rotorua, New Zealand, after geother­mal water and steam heat a home the owner often uses the waste heat for a backyard swimming pool and steam cooker. At the Otake geothermal power plant in Japan, approximately 165 tonnes per hour of hot water flows to downstream communities for space heating, greenhouses, baths, and cooking. In Sapporo, Hokkaido, Japan, the waste water from the pavement snow-melting system is retained at 65oC and reused for bathing.

Current district heating costs are 0.23-0.42 b/ 1000 kcal (0.27-0.49 b/kWh) in Turkey compared to

3.4 b/kWh for natural gas and 11.2 b/kWh for electricity-based heating. The Klamath Falls district
heating system charges 1.6-2.0 b/kWh. This is 50­80% of the natural gas cost, depending on the efficiency of the gas conversion, and the comparable cost for electricity in the city is 5.5 b /kWh. Con­struction costs for heating in Turkey are $850-1250/ kW and the cost per residence is approximately $2000, an investment that is amortized over 5-10 years. Stefansson reported that an average consumer heating cost in 1995 for four European countries was

2.4 b/kWh.

Other estimates (1990 data) of the capital cost for various direct-use projects in the United States are as follows:

Space heating (individual): $463/kW of installed

capacity

District heating: $386/kW of installed capacity Greenhouses: $120/kW of installed capacity Aquaculture: $26/kW of installed capacity

International data indicate a rate of $270/kW of installed capacity for all projects reported, with a range of $40-1880/kW. In the United States, the annual operation and maintenance cost is estimated to be 5% of the installed cost.

4. FUTURE DEVELOPMENTS

There appears to be a major potential for the development of low to moderate enthalpy geother­mal direct use throughout the world, which is not being exploited due to financial constraints and the low price of competing energy sources. Given the right environment, and as gas and oil supplies dwindle, the use of geothermal energy will provide a competitive, viable, and economic alternative source of renewable energy.

Future development will most likely occur under the following conditions:

1. Co-located resource and uses (within 10 km).

2. Sites with high heat and cooling load density (>36 MWt/km[22]).

3. Food and grain dehydration (especially in tropical countries, where spoilage is common).

4. Greenhouses in colder climates.

5. Aquaculture to optimize growth, even in warm climates.

6. Ground-coupled and groundwater heat pump installation (for both heating and cooling).

SEE ALSO THE FOLLOWING ARTICLES

Cogeneration • District Heating and Cooling • Geothermal Power Generation • Ground-Source Heat Pumps • Ocean Thermal Energy • Solar Thermal Power Generation • Thermal Energy Storage

Further Reading

Boyd, T. L. (1999). The Oregon Institute of Technology Geothermal Heating System—Then and now. Geo-Heat Center Q. Bull. 20(1), 10-13.

Geo-Heat Center (1997.). Geothermal direct-use equipment. Geo­Heat Center Q. Bull. 19(1).

Geo-Heat Center (1999.). Downhole heat exchangers. Geo-Heat Center Q. Bull. 20(3).

Geo-Heat Center Web site: http://geoheat. oit. edu.

Gudmundsson, J. S., and Lund, J. W. (1985). Direct uses of Earth heat. Energy Res. 9, 345-375.

Kavanaugh, S., and Rafferty, K. (1997). ‘‘Ground-Source Design of Geothermal Systems for Commercial and Institutional Build­ings.’’ ASHRAE, Atlanta, GA.

Lund, J. W. (1996a). Balneological use of thermal and mineral waters in the USA. Geothermics 25(1), 103-148.

Lund, J. W. (1996b). Lectures on direct utilization of geothermal energy, United Nations University Geothermal Training Pro­gramme, Report 1. Orkustofnun, Reykjavik, Iceland.

Lund, J. W., and Boyd, T. L. (2000). Geothermal direct-use in the United States, update: 1995-1999. In ‘‘Proceedings of the World Geothermal Congress 2000, Japan.’’ International Geothermal Association, Pisa, Italy.

Lund, J. W., and Freeston, D. H. (2001). Worldwide direct uses of geothermal energy 2000. Geothermics 30(1), 29-68.

Lund, J. W., Lienau, P. J., and Lunis, B. C. (eds.). (1998). ‘‘Geothermal Direct-Use Engineering and Design Guidebook.’’ Geo-Heat Center, Klamath Falls, OR.

Muffler, L. P. J. (ed.). (1979). ‘‘Assessment of geothermal resources of the United States—1978, USGS Circular No. 790.’’ U. S. Geological Survey, Arlington, VA.

Rafferty, K. (2001). ‘‘An Information Survival Kit for the Prospective Geothermal Heat Pump Owner.’’ Geo-Heat Center, Klamath Falls, OR.

Ragnarsson, A. (2000). Iceland country update. In ‘‘Proceed­ings of the World Geothermal Congress 2000, Japan,’’ pp. 363-376. International Geothermal Association, Pisa, Italy.

Updated: March 15, 2016 — 12:08 am