Deep Geothermal Review Study Final Report Department of Energy & Climate Change (DECC) October 2013 Deep Geothermal Review Study Final Report Notice This document and its contents have been prepared and are intended solely for the Department of Energy & Climate Change (DECC)’s information and use. Atkins Limited assumes no responsibility to any other party in respect of or arising out of or in connection with this document and/or its contents. Document history Job number: 5119440 Document ref: 5119440-RPT-004 Revision Purpose description Originated Checked Reviewed Authorised Date Rev 1.0 DRAFT Report AN/IR PT/NK/OM DS/NA 05/07/13 Rev 2.0 Final Report AN/IR PT/OM DS/NA 31/08/13 Rev 3.0 Re-drafted Final Report DP IR/MH DS DP 27/09/13 Rev 4.0 Re-drafted Final Report DP IR/MH DS DP 18/10/13 Rev 5.0 Corrected Final Report DP IR/MH DS DP 21/10/13 Atkins Deep Geothermal Review Study | Version 5.0 | 21 October 2013 Deep Geothermal Review Study Final Report Table of contents Chapter Pages Glossary of terms i 1 Introduction 1 1.1. Scope and Objectives 1 1.2. Background and Context 1 1.3. Limitations 3 2 UK Geothermal Resource 4 2.1. History of Geothermal Energy Exploration in the UK 4 2.2. UK Geothermal Resources 4 2.3. Major Radiothermal Granites 5 2.4. Hot Sedimentary Aquifers 7 3 Phases of a Deep Geothermal Power Project 14 3.1. Introduction 14 3.2. Preliminary Survey 14 3.3. Exploration Phase 14 3.4. Test Drilling 16 3.5. Well Testing, Tracer Testing and Logging 17 3.6. Reservoir Development 17 3.7. Production and Reservoir Monitoring 17 3.8. Phases of Deep Geothermal Power Project Cost and Risk Profile 18 4 Geothermal Power Generation Systems 21 4.1. Overview 21 4.2. Technologies 21 4.3. Existing Generating Plant Examples – ORC & Kalina Cycle 23 4.4. Case Study – Pump & Well Operation 24 4.5. Case Study – The German Situation 24 5 Lessons Learned From Past Projects 26 5.1. General Considerations 26 5.2. Rhine Valley 26 5.3. Experience from Other EGS Sites 28 6 Environmental, Regulatory & Other Considerations 34 6.1. Environmental Considerations 34 6.2. Regulatory 35 6.3. Other Considerations 36 7 Revenue and Subsidy /Funding Mechanisms 38 7.1. Sources of Revenue for Deep Geothermal 38 7.2. Grants 38 7.3. Commercial Models/ Routes and Types of Investment 39 8 Geothermal Power Schemes Feasibility Analysis 40 8.1. Introduction 40 8.2. Geology 40 8.3. Resource and Reserves 40 8.4. Screening for Geothermal Reserves in the UK 42 8.5. Scenario Analysis for Case Studies 52 8.6. Electrical Grid Connections 52 8.7. Summary of Risks Involved in Developing Deep Geothermal Projects 53 9 Case Studies 58 Atkins Deep Geothermal Review Study | Version 5.0 | 21 October 2013 Deep Geothermal Review Study Final Report 9.1. Rationale 58 9.2. Enhanced Geothermal System (EGS): Cornwall 60 9.3. Deep Hydrothermal (non- EGS) System: Weardale 67 9.4. Hot Sedimentary Aquifer (non-EGS) System: Crewe 72 9.5. Discussion on Modelling Parasitic Loads 76 9.6. Discussion on EMR and RHI Consultations 77 9.7. Discussion on Levelised Cost of Electricity (LCOE) 78 9.8. Sensitivity to Resource Degradation 79 10 Outlook on Opportunities 80 10.1. Innovation 80 10.2. The Supply Chain 81 10.3. Economic Benefit of Sector Development 82 11 Stakeholder Consultation 85 11.1. General Issues 85 11.2. Financial & Investor Issues 85 12 Conclusions 87 13 References 91 Appendix A. Exploration Strategies and Techniques 95 A.1. Introduction 95 A.2. Preliminary Survey 95 A.3. Exploration 98 A.4. Drilling Phase 102 A.5. Well Testing, Tracer Testing and Logging Phase 104 A.6. Reservoir development phase 107 A.7. Production phase 109 A.8. Reservoir management and monitoring 109 Appendix B. Single well/Standing Column Wells (“coaxial tube”) systems 111 B.1. Single well systems 111 B.2. Standing column wells 111 Appendix C. Results of Stakeholder Consultation 112 C.1. DECC Deep Geothermal UK Review Study Stakeholder Engagement 113 C.2. Results of Stakeholder Questionnaire 124 Tables Table 1–1 Summary of Resources and Reserves ...................................................................................... 3 Table 2-1 Summary of UK geothermal resources potentially suitable for electrical power production ... 12 Table 3-1 Geophysical methods .............................................................................................................. 15 Table 3-2 Geothermal gradient boreholes ............................................................................................... 16 Table 4-1 Summary of Existing ORC and Kalina based Generating Plants ............................................ 23 Table 4–2 EGS Soultz Geothermal Project (France): Line Shaft Pump (LSP) performance at two different depths in GPK2 well .................................................................................................. 24 Table 5–1 Summary of lessons learnt from Non-EGS and EGS Projects in Crystalline Rock and Hot Sedimentary Rock Geothermal Projects ................................................................................. 31 Table 8-1 Summary of assessment of resource and reserve areas in the UK (using definitions from the Australian code) ....................................................................................................................... 43 Table 8–2 Typical capital cost breakdown ................................................................................................ 49 Table 8–3 Base Case Modelling Assumptions ......................................................................................... 50 Table 8–4 Minimum parameter geothermal scheme suggested by Paschen et al (Ref. 48) ................... 52 Table 8-5 Summary of Risks Involved in Developing Deep Geothermal Projects .................................. 54 Table 9–1 Cornwall scenario geothermal reservoir parameter................................................................. 60 Table 9–2 Cornwall: Specific modelling assumptions ............................................................................. 62 Table 9–3 Cornwall: Heat sale sensitivity ................................................................................................ 62 Atkins Deep Geothermal Review Study | Version 5.0 | 21 October 2013 Deep Geothermal Review Study Final Report Table 9–4 Cornwall: Capital cost sensitivity (0% heat use) ...................................................................... 64 Table 9–5 Cornwall: Capital cost sensitivity (50% heat use) .................................................................... 64 Table 9–6 Cornwall: Heat Sale Price sensitivity (50% heat use).............................................................. 64 Table 9–7 Cornwall: Opex sensitivity (50% heat use) .............................................................................. 65 Table 9–8 Weardale Scenario Heat Reservoir Parameter ....................................................................... 68 Table 9–9 Weardale: Specific Modelling Assumption .............................................................................. 69 Table 9–10 Weardale: Heat sale sensitivity ................................................................................................ 69 Table 9–11 Weardale: Capital cost sensitivity (0% heat use) .................................................................... 69 Table 9–12 Weardale: Capital cost sensitivity (50% heat use) .................................................................. 69 Table 9–13 Weardale: Heat Sale Price sensitivity (50% heat use) ............................................................ 70 Table 9–14 Weardale: Opex sensitivity (50% heat use) ............................................................................. 70 Table 9–15 Crewe scenario heat reservoir parameter ............................................................................... 72 Table 9–16 Crewe: Base Case Assumptions ............................................................................................. 74 Table 9–17 Crewe: Heat sale sensitivity ..................................................................................................... 74 Table 9–18 Crewe: Capital cost sensitivity (100% heat) ............................................................................ 74 Table 9–19 Crewe: Heat sale price sensitivity (100% heat) ....................................................................... 75 Table 9–20 Crewe: Opex sensitivity (100% heat,) ..................................................................................... 75 Table 9–21 Effect of RHI change on project IRR ....................................................................................... 78 Table 9–22 LCOE comparison table ........................................................................................................... 78 Table 10–1 Geothermal Supply Chain Jobs ............................................................................................... 81 Table 10–2 US Jobs Created by Resource Type (recreated from Deloitte, 2008 (Ref.15)) ....................... 83 Figures Figure 2–1 Heat flow map of the UK (Ref 9) ............................................................................................... 5 Figure 2–2 Location of sedimentary basins and major radiothermal granites (Ref. 3) ................................ 5 Figure 2–3 Distribution and values of heat flow measurements in South West England (Ref. 19) - Heat 2 flow values in mW/m ................................................................................................................