Economic review of the geopressured-geothermal resource with recommendations

This report presents the results of an economic study conducted by the INEL under DOE Contract No. AC07-76ID01570 to evaluate the breakeven price to market energy from a geopressured-geothermal resource. A breakeven price is a minimum, per unit charge required for the developer to recover all direct and indirect costs and a rate of return sufficient to compensate the developer for depreciation, the time value of money, and the risk of failure. The DOE Geopressured-Geothermal Research Program and the DOE well testing and operations at three locations in the Gulf Coast region provide the bulk of resource and economic characteristics for this study. A menu-driven model was developed in LOTUS-123 to calculate the breakeven price to market gas and electricity from a geopressured-geothermal resource. This model was developed using the present value methodology and conservative assumptions. Assuming present well constraints and current off-the-shelf conversion technology, the breakeven price for electricity is about $0.26/kWh using only the thermal energy from a Hulin-type resource. Assuming identical resource and technology constraints, the breakeven price is reduced to about $0.15/kWh when using all available energy forms (methane, hydraulic, and thermal). Assuming the use of available advanced technologies, the breakeven price is reduced to about $0.10/kWh. Assuming the higher quality resource (with higher temperature and gas content) in the South Texas cases, the breakeven cost is about $0.095/kWh. Using advanced technology, this cost is further reduced to about $0.05/kWh. Both costs are within program goals. The results of this study suggest that the future direction of the Geopressured-Geothermal Program emphasize (a) selection of higher quality resource, (b) advanced energy conversion technology, and (c) total energy utilization.