Decarbonizing the Residential Sector with Geothermal District Heating Networks: The Contribution of Hydrocarbon Wells

Abstract

Abstract Climate change and the energy crises are forcing industrialized countries to contain CO2 emissions and use indigenous renewable energy sources. Geothermal energy has great potential, especially thermal energy, given that 48% of the final energy consumption in the EU20 countries in 2021 concerns heating and cooling systems. The studies on the potential development of district heating (DH) in Italy mainly consider using renewable sources and waste heat from industrial plants. This study highlights how the recovery and reuse of existing hydrocarbon infrastructure can contribute to the diffusion of DH projects that implement the principles of the circular economy. The Italian geothermal potential in terms of repurposing oil wells is essential. In the 111 onshore hydrocarbon production concessions, 847 active wells have different operational statuses, including 436 productive wells and 399 potentially productive wells. This study presents two examples of reusing hydrocarbon wells to satisfy the energy demand for heating residential buildings through locally available geothermal renewable energy sources. This study has verified the feasibility, pros, and cons of developing geothermal DH. The context is related to depleted hydrocarbon fields, where oil wells can be converted into geothermal wells. Regarding the economic sustainability of repurposing projects, the results of this study highlight the viability and profitability of DH development. The analysis based on evaluating the payback time (PBT), the project net present value (NPV), and the internal rate of return (IRR) highlights the dependency on the heat tariff. The evaluated levelized cost of heat (LCOH) has been assumed as a key performance index. It should also be noted that LCOH for the two case studies is less than the reference tariff of 100.5 €/kWh. This result is obtained mainly from the reduced capital expenditure for drilling. However, our results show how reusing hydrocarbon wells in geothermal projects constitutes an excellent opportunity to access geothermal resources, significantly reducing the necessary investment and the mining risk and strongly improving the economics of the projects. The solutions adopted in this study can also be optimized by considering the application of a binary system to produce electricity. District heating systems using binary plants achieve greater global energy efficiency. It is necessary to revolutionize the residential heating system through solutions such as the one described in this study, creating DH systems that use a zero-emission energy source as the primary source, such as geothermal. The promotion and diffusion of geothermal district heating networks could significantly contribute to achieving the climate objectives set by the European Union.