The value of heat and geothermal waters

Abstract

Evaluation of proposed geothermal projects often requires a value to be assigned to waterborne geothermal heat or geothermal fluids. A methodology for valuing low-enthalpy warm fluids (<90°C) is presented: the method uses a reference price for sale of waterborne district heating at a relatively high temperature (in this paper, we have assumed 70°C), and then discounts this price by the value of electricity that must be expended in a heat-pump compressor to transfer heat from the source fluid to the target reference level. An alternative methodology is also presented, based on the exergy content of the geothermal fluid: this is arguably more theoretically justifiable but does not account for the real costs of running a heat pump. Compared with other sources of low-carbon environmental heat, prospecting for deeper warm geothermal fluids will be favoured when drilling costs are low and electricity prices are high; shallow cooler fluids, coupled with the use of heat pumps, are economically favourable when electricity is cheap and drilling costs are high.