Publication Number: 500-04-051
Publication Date: April 2004
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The Hetch Hetchy Water and Power Division of the San Francisco Public Utilities Commission (Hetch Hetchy/SFPUC) has retained GeothermEx, Inc., to provide a portfolio of well-characterized geothermal resources within California and western Nevada that could supply additional power to the California market. This project (Project 1.3) is the geothermal component of the Hetch Hetchy/SFPUC Programmatic Renewable Energy Project, a set of PIER-funded studies to evaluate the potential of a variety of renewable energy sources and options for energy transmission.
The objective of Project 1.3 is to quantify each geothermal resource in terms of its minimum and most-likely generation capacity, estimated costs of exploration and confirmation, and estimated total development costs and unit development costs ($/kW installed), including transmission-line costs as determined by other Hetch Hetchy/SFPUC project participants. Project 1.3 has relied on information in the public domain and such other information as private developers have agreed to contribute. A principal outcome of the work has been the creation of a database (referred to herein as the PIER Geothermal Database) in MS AccessÓ, included on a computer CD accompanying this study. The PIER Geothermal Database includes information about the resource characteristics of 155 separate geothermal projects at 83 resource areas. It also includes embedded documents describing the methodology of the study and tables summarizing results.
To establish a quick way of ranking geothermal projects at varying stages of maturity, this study has defined four development categories as follows:
A - Existing power plant operatingThe geothermal projects have also been classified geographically into four areas to facilitate consideration of options for transmission of power to the California market:
B - One or more wells tested with a potential greater than or equal to (>=) 1 MW, but no power plant in operation
C - Minimum 212°F logged downhole, but no well tests at >= 1 MW
D - Other exploration data and information available (>= 212°F not proven)
Area 1 - Greater Reno, Nevada (including nearby California sites at Honey Lake)
Area 2 - Nevada sites with direct access to the California grid (the Dixie Corridor)
Area 3 - Other Nevada locations
Area 4 - All California locations (excluding Honey Lake)
The results of this study are presented by grouping fields according to these areas. Results are also summarized by state (that is, all California fields and all Nevada fields). Minimum and most-likely estimates of electrical generation capacity have been made for 58 resource areas that have sufficient information in the public domain. The estimates are based on a methodology that has been used by GeothermEx over the past two decades. This methodology is a volumetric reserve estimation approach introduced by the U. S. Geological Survey, modified to account for uncertainties in some input parameters by using a probabilistic basis (Monte Carlo simulation).
Based on the reserve estimates of this study, the electrical generation capacity available to the California market from geothermal sources in California and Nevada has a minimum value of about 4,700 gross MW and a most-likely value of about 6,200 gross MW. After allowances for generation capacity already on line, the incremental generation capacity available from geothermal sources in both states has a minimum value of about 2,800 gross MW and a most-likely value of about 4,300 gross MW. These estimates may be conservative to the extent that they do not take into account resources about which little or no public-domain information is available.
The generation capacity available from fields within California alone has a minimum value of about 3,700 gross MW and a most- likely value of about 4,700 gross MW. The incremental generation capacity available from fields within California alone has a minimum value of about 2,000 gross MW and a most-likely value of about 3,000 gross MW. Geothermal sites in California alone account for about 70% of the combined incremental generation capacity available from both states. Within California, 90% of the incremental generation capacity identified in this study comes from three areas: the Imperial Valley, The Geysers, and Medicine Lake. The Imperial Valley alone accounts for about 65% of the incremental capacity available in California.
For the geothermal sites in both states, the capital cost of incremental generation capacity averaged about $3,100 per kW installed. For California sites alone, the average capital cost of incremental generation capacity was somewhat lower: about $2,950 per kW installed. These cost estimates include the following components:
- Exploration (up to the siting of the first deep, commercial-diameter hole);
- Confirmation drilling (up to achieving 25% of required capacity at the wellhead);
- Development drilling (up to achieving 105% of required capacity at the wellhead);
- Construction of the power plant (including ancillary site facilities); and
- Transmission-line costs.
The capital cost estimates are only approximate, because each developer would bring its own experience, bias, and opportunities to the development process. Nonetheless, the overall costs per project estimated in this study are believed to be reasonable.
The capital cost for specific geothermal projects ranged from about $1,000/kW (for a small expansion at an existing project) to values in excess of $6,000/kW (for deep, low-temperature resources at remote locations). Of the 4,300 gross MW of most-likely incremental capacity available from both California and Nevada, about 2,500 gross MW is available at a capital cost less than the average of $3,100/kW. Considering just fields within California, about 2,000 gross MW of incremental generating capacity is available at a capital cost below the average of $2,950/kW.
For the purposes of this study, a capital cost of $2,400/kW or less is considered competitive with other renewable resources, both for the California/Nevada study area and for the state of California alone. The amount of incremental geothermal capacity available at or below $2,400/kW is about 1,700 gross MW for the California/Nevada study area, and the same amount (after rounding to the nearest increment of 50 gross MW) for the state of California alone. This amount of geothermal capacity available represents a significant opportunity for commercial development to meet the needs of the California electricity market. Resources with higher estimated costs may also be attractive, depending on market conditions and the mechanisms for implementing California’s renewable portfolio standard.
This study identifies remaining undeveloped geothermal resources in California and western Nevada, and it estimates the development costs of each. It has relied on public-domain information and such additional data as geothermal developers have chosen to make available. Reserve estimation has been performed by volumetric analysis with a probabilistic approach to uncertain input parameters. Incremental geothermal reserves in the California/Nevada study area have a minimum value of 2,800 gross MW and a most-likely value of 4,300 gross MW. For the state of California alone, these values are 2,000 and 3,000 gross MW, respectively. These estimates may be conservative to the extent that they do not take into account resources about which little or no public-domain information is available. The average capital cost of incremental generation capacity is estimated to average $3,100/kW for the California/Nevada study area, and $2,950/kW for the state of California alone. These cost estimates include exploration, confirmation drilling, development drilling, plant construction, and transmission-line costs. For the purposes of this study, a capital cost of $2,400/kW is considered competitive with other renewable resources. The amount of incremental geothermal capacity available at or below $2,400/kW is about 1,700 gross MW for the California/Nevada study area, and the same amount (within 50-MW rounding) for the state of California alone. The capital cost estimates are only approximate, because each developer would bring its own experience, bias, and opportunities to the development process. Nonetheless, the overall costs per project estimated in this study are believed to be reasonable.
Table of Contents
1.1. Background and Overview
1.2. Project Objectives
1.2.1. Introduction to Project 1.3
1.2.2. Project Goals
1.2.3. Project Objectives
1.3. Report Organization
2.0 Project Approach
2.1. Prior Research
2.2. Baseline Conditions
2.3. Project Work Plans
2.4. Resource Sites and Geographic Areas
2.5. Task List
2.6. PIER Geothermal Database (MS Access©)
2.6.1. General Description and Organization of the Data
2.6.2. Instructions for Use
2.7. Resource Data
2.8. Generating Potential
2.9. Statistical Correlations For Drilling Costs
2.9.1. Drilling Costs Versus Depth
2.9.2. Well Productivity Versus Temperature
2.10. Exploration and Resource Confirmation Costs
2.11. Development Costs
3.0 Conclusions and Recommendations
3.2. Commercialization Potential
3.4. Benefits to California
Appendix I. Database Figure List by Project
Appendix II. Project Data Summary Report (example)
Appendix III. Methodology of Estimating Generation Capacities (Geothermal Energy Reserves), including
Table III-1: Physical characteristics of producing geothermal fields
Appendix IV. Methodology of Estimating Exploration and Confirmation Costs, including
Table IV-1: Unit costs and other factors for exploration and confirmation
Table IV-2: Totals of full-diameter, production and injection wells at geothermal fields in California and Nevada
Appendix V. Exploration, Confirmation and Development Costs - Detail by Project (example)
Appendix VI. Methodology of Estimating Development Cost
Table VI-1: Summary of estimated costs of site substations, transmission lines and collector/line substations and taps for geothermal projects in Nevada (from Woodford, 2003)
Appendix VII. How to Use the Database / Technical Information
List of Figures
Figure 1 Locations of Geothermal Resource Areas
Figure 2 Startup window for PIER Geothermal Database in MS Access©
Figure 3 “PROJECTS” window (example) from the PIER Geothermal Database in MS Access©
Figure 4 “REPORTS AND DOCUMENTS” window from the PIER Geothermal Database in MS Access©
Figure 5 Local Site Area Map (Example)
Figure 6 Local Site Downhole Temperature Graph (Example)
Figure 7 Probabilistic Calculation Of Geothermal Energy Reserves (Example)
Figure 8 Correlation Of Drilling Cost Vs. Well Depth
Figure 9 Correlation of Well Productivity Vs. Production-Zone Temperature
Figure 10 Producer Price Index for Drilling Oil and Gas Wells (Onshore Drilling)
List of Tables
Table 1. Projects List
Table 2. Projects by Area
Table 3. Estimated Generation Capacities
Table 4. Comments to Estimated Generation Capacities
Table 5. Estimated Generation Capacities - by Exploration-Development Category
Table 6a. Data for Statistical Correlation of Drilling Costs vs. Depth
Table 6b. Data for Statistical Correlation of Well Productivity vs. Temperature
Table 7. Details of Exploration Programs
Table 8. Exploration, Confirmation and Site Development Cost Estimates - Summary with Cost Totals
Table 9. Comments on Confirmation Cost Estimates
Table 10. Comments on Site Development Cost Estimates
Table 11. Confirmation and Site Development Cost Estimates - Drilling Details
Table 12. Exploration, Confirmation and Site Development Cost Estimates - per kW
Table 13. Transmission Line Cost Estimates
Table 14. Site Development, Transmission Line and Total Cost Estimates - Totals and per kW
Table 15. Total and Incremental Generation Capacities for Selected Areas