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Fortissat Community Minewater Geothermal Energy District Heating Network

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Fortissat Community Minewater Geothermal Energy District Heating Network Fortissat Community Minewater Geothermal Energy District Heating Network ACKNOWLEDGEMENTS This report was funded by and prepared for the Scottish Ministers under the Geothermal Energy Challenge Fund, part of the Low Carbon Infrastructure Transition Programme (LCITP) which is funded by the European Regional Development Fund. The proJect consortium would like to extend a special thank you to Carole Stewart, Kathleen Robertson, Richard Gachagan and Johann MacDougal of the Scottish Government for their assistance throughout the creation of this report. In addition, we would also like to extend our thanks to the following individuals, whose support and input merits acknowledgement: • John Rattray, Farm Manager at Hartwood Home Farm • Margaret McLean, Allanton Tenants and Residents Association • John McKechnie, SEPA • Lynda Stevenson, NLC Housing and Social Work Services • David Miller, NLC Regeneration & Environmental Services • Alex Neil, MSP, Member for Airdrie and Shotts • Ian Booth, Aberdeen Heat and Power • Ron Tracey, Shettleston Housing Association The proJect consortium would also like to extend gratitude to Fergus Ewing MSP, Minister for Business, Energy and Tourism, for his enthusiasm in supporting the development of Scottish geothermal energy demonstrator proJects, of which this report is a valuable catalysing step. Fortissat Community Minewater Geothermal Energy District Heating Network TABLE OF CONTENTS Preface ............................................................................................................................... I EXECUTIVE SUMMARY ........................................................................................................ I Introduction ................................................................................................................................ I Project Aims ................................................................................................................................ I Site and Study Area ..................................................................................................................... I Geothermal Supply .................................................................................................................... II District Heating Network ........................................................................................................... III Development Options ............................................................................................................... IV Delivery Model .......................................................................................................................... VI Next Steps ................................................................................................................................ XII Chapter 1 – Introduction .................................................................................................... 1 1.1 Overview of Proposal ........................................................................................................ 1 1.2 Project Team and Structure .............................................................................................. 2 1.3 Report Structure ............................................................................................................... 3 Chapter 2 – Environmental Baseline .................................................................................. 5 2.1 Introduction ..................................................................................................................... 5 2.2 Site ................................................................................................................................... 5 2.3 Surrounding Context ......................................................................................................... 8 2.4 Proposed Development ................................................................................................... 11 Chapter 3 - Geothermal Supply ........................................................................................ 13 3.1 Introduction .................................................................................................................... 13 3.2 Minewater Geothermal Energy - Basic Principles ............................................................. 13 3.3 The Resource – The Mine System ..................................................................................... 14 3.4 Geology, Hydrogeology and Drilling ................................................................................. 22 3.5 Option Appraisal for Geothermal System ......................................................................... 28 Chapter 4 – District Heating Network ............................................................................... 32 4.1 Introduction .................................................................................................................... 32 4.2 Heat Demand Analysis ..................................................................................................... 32 4.3 Preliminary Network Analysis .......................................................................................... 36 4.4 Preliminary Scenario Appraisal ........................................................................................ 39 4.5 Final Network Design ....................................................................................................... 43 4.6 Energy Centre Design ....................................................................................................... 47 Chapter 5 – Development Options ................................................................................... 55 5.1 Introduction .................................................................................................................... 55 5.2 Option 1 – ‘Preferred’ ...................................................................................................... 56 5.3 Option 2 – ‘Alternative’ ................................................................................................... 57 5.4 Options Summary Table ................................................................................................... 58 5.5 Option Comparison – Passive Treatment vs Reinjection ................................................... 58 5.6 Risk Management ............................................................................................................ 62 5.7 Opportunities .................................................................................................................. 66 5.8 Carbon Audit ................................................................................................................... 66 Fortissat Community Minewater Geothermal Energy District Heating Network Chapter 6 – Delivery Model ............................................................................................. 68 6.1 Summary ......................................................................................................................... 68 6.2 Overview of Proposal ....................................................................................................... 68 6.3 Project Evolution ............................................................................................................. 70 6.4 Metering and Tariff Options ............................................................................................. 71 6.5 Overview of Business Models and Legal Structures .......................................................... 72 6.6 Delivery Structure Options ............................................................................................... 76 6.7 Pros and Cons of Commercial Structures .......................................................................... 77 6.8 Structure of SPV ............................................................................................................... 80 6.9 Financial Model – Medium Term ...................................................................................... 81 6.10 Revenue Streams ........................................................................................................... 82 6.11 Initial Results of Financial Analysis ................................................................................. 84 6.12 Sensitivity Analysis ........................................................................................................ 86 6.13 Financial Model – Long Term ......................................................................................... 88 6.14 Conclusions from Financial Modelling ............................................................................ 91 Chapter 7 – Next Steps .................................................................................................... 92 7.1 Introduction .................................................................................................................... 92 7.2 Geothermal Resource – Confirming the Heat Supply ........................................................ 92 7.3 Community Engagement – Heat Demand ......................................................................... 96 7.4 District Heat Network (DHN) ............................................................................................ 97 7.5 Business Plan ................................................................................................................... 98 7.6 Indicative Programme .....................................................................................................
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