What to Consider in Setting up a Geothermal Energy Plant?

Geothermal energy is heat generated beneath the earth's crust contained in rocks and fluids. Geothermal energy can be used for cooling, heating, and providing a clean source of energy. For electricity, medium or high temperature is needed, which can be found deep down the earth's surface, generally located near tectonically active regions.

The world is now finding viable sources of clean energy to replace or at least minimize the usage of non-renewable energy sources (coal, oil, natural gas, and nuclear). Geothermal energy is one of the viable options to produce cheaper renewable energy. It is also not dependent on weather conditions, which means continuous operations. Geothermal power plants can supply a baseload of electricity.

4 Major Considerations in Setting-up a Geothermal Project

A geothermal project requires enormous investment. You need to consider every aspect before diving into it. Let's discuss the primary considerations in assessing geothermal energy projects.

1. Exploration

Exploration can take several years. The costs would also depend on the method of exploration. Drilling is the most common and accurate method, but also costly. Exploration can be a hit or miss effort.

Aside from identifying geothermal areas, exploration is also a process of finding low-density and cost-effective regions for drilling.

2. Matching your energy resource with the plant capacity

Your energy resource deteriorates overtime. It means you have to do additional drillings to match the plant capacity to supply your Purchaser's energy requirement. The percentage of deterioration depends on your energy supply turnover and the geothermal reservoir capacity.

3. Securing Power Purchase Agreement (PPA)

It is risky starting a geothermal project without securing a Power Purchase Agreement. Projects such as geothermal, hydropower, and oil exploration projects need to secure a PPA first. Power Purchase Agreement will secure the Developer from price fluctuations and steady demand for energy generated. PPA should be a long-term agreement of more than 20 years. The geothermal project will only be built if a Purchaser is guaranteeing the price.

4. Types of Geothermal Power Plants

Depending on your allotted initial investment, you can build different types of geothermal power plants. It will also depend on the geothermal elements of the energy source.

Three Types of Geothermal Power Plants

There are three types of Geothermal Steam Power Plants:

1. Dry Steam Plant

2. Flash Steam Plant

3. Binary Steam Plant.

1. Dry Steam Plant

Dry steam plant is the first invented and used geothermal power plant. The dry steam plant uses steam from the reservoir to run a low-pressure turbine. Steam is collected from the production well. Turbines then drive the generators to produce electricity. This process eliminates the need for fuel to run turbines. Used steam is then returned to the geothermal reservoir through the injection well.

2. Flash Steam Plant

Flash steam power plant is the most operated geothermal plant nowadays. Flash steam plant operates on the geothermal reservoir at a water temperature greater than 182°C. Water/fluid is pumped under high pressure into a tank. This tank on the surface has a lower temperature, causing some fluid to vaporize or flash. This vapor drives a turbine, which then drives the generator to provide electricity. Unused water and steam are sent back to the reservoir through the injection well.

3. Binary Steam Plant

Binary steam plant is a recent development of geothermal power plant. It is a system that steam and water do not directly contact the turbines and generator. Instead, a binary steam plant utilizes a low to moderately heated (lower than 150°C) geothermal water to heat a secondary (hence, binary) working fluid in a lower boiling point. Heat is transferred from the water to the working fluid through the heat exchanger. The working fluid then vaporizes, which drives the turbines, then the generator. Used fluid passes through the condenser, then back to the reservoir. Water is also injected back through the injection well.

In conclusion:

Renewable energy is the future of energy sources. It makes geothermal energy one of the feasible options. If you consider investing in a geothermal project, be prepared to invest a massive amount for exploring and possible high return or investment losses. Power Purchase Agreement is a must before the construction of a geothermal power plant.

You can use financial model templates, which are carefully planned and presented for a geothermal project. The financial model will help you assess your proposed geothermal project's financial feasibility before investing in the venture.