january 2008 geo-heat center quarterly bulletin

8/8/2019 JANUARY 2008 Geo-Heat Center Quarterly Bulletin

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GEO-HEAT CENTERQUARTERLY BULLETIN

OREGON INSTITUTE OF TECHNOLOGY KLAMATH FALLS, OREGON 97601-8801 (541) 885-1750

VOL. 28 NO. 4 JANUARY 2008

ISSN 0276-1084

GEOTHERMAL DISTRICT HEATING


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CONTENTS

Protability Analysis and Risk Managemento Geothermal Projects ....................................... 1

Dipl. Volks. Dr. Tomas Reif

Te Role o the Communities in the Utilizationo Subterranean Geothermal Energy................... 5

Dr. Erwin Knapek

Te Concept o Hybrid Power Plants inGeothermal Applications .................................... 8

Dr. Ing. H. KreuterDipl. Ing. B. Kapp

Geothermal Energy Use Compared to OtherRenewables ....................................................... 10

John W. Lund

Nevada Geothermal Utility Company: NevadasLargest Privately Owned Geothermal Space

Heating Districts .............................................. 13Dennis rexler

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GEO-HEA CENEROregon Institute o echnology

3201 Campus DriveKlamath Falls, OR 97601

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ypesetting/Layout Debi CarrCover Design SmithBates Printing & Design

WEBSITE:

http://geoheat.oit.edu

FUNDING

Te Bulletin is provided compliments o the Geo-

Heat Center. Tis material was prepared withthe support o the U.S. Department o EnergyRenewable Energy Laboratory. However, any opin-ions, ndings, conclusions, or recommendationsexpressed herein are those o the authors(s) and donot necessarily refect the view o USDOE.

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Vol. 28 No. 4 JANUARY 2008

GEO-HEAT CENTER QUARTERLY BULLETINISSN 0276-1084

A Quarterly Progress and Development Report on the Direct Utilization o Geothermal Resources

Cover: Figures rom: District Heating

Development Guide, Vol. I, prepared by R.G.

Bloomquist, J.T. Nimmons, and K. Raerty,

Washington State Energy Ofce, Olympia,

Washington


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1GHC BULLETIN, JANUARY 2008

STARTING POINT

Bavaria is experiencing a boom in geothermal energy.While only a ew claims had been staked in 2003, by theend o 2006, there were already about 75 exploration and

exploitation permits or searching or hydrothermal sourc-es o geothermal energy and exploiting them or districtheating and/or generating electricity. The search or geo-thermal sources in the Molasse [a group o Miocene sedi-mentary deposits in the Alpine region] has turned out tobe substantially more complex than originally suspected.The numerous technical, economic, and legal questionsare only really coming into ocus now that projects are tobe implemented. In addition, the environment or heat andelectricity projects has changed signicantly in the pasttwo years: thus, heat projects benet rom the increasedprices o oil and gas, and rom the concern over depen-

dence on the classical energy media. On the other hand, allprojects are suering rom the sharply increased prices odrilling and steel, and rom the increased expense o pur-chasing electricity or auxiliary power requirements. Theprotability simulations or municipal and private districtheating and electricity projects agree that the leeway be-tween a protable and an unprotable geothermal-energyproject has become very small. From the point o view oenergy and environmental policies, it would be worthwhileto exploit the Bavarian geothermal potential, since renew-able sources o energy that are carbon-dioxide-ree andcan be used or base-load power are hardly plentiul. Sothere must be a ocus on the economic aspects rom the

start o the project.

INVESTMENT AND FINANCING

For the protability analysis, an electricity and a districtheating project standardized or the Molasse region areconsidered. In the electricity project, a geothermal poten-tial o about 38 megawatts is to be exploited by means o atriple geothermal well at a drilling depth o 3,500 metres,with an annual average generating capacity o about 4.5MW being installed, using a Kalina cycle. In the case othe district heating project, a thermal potential o about 19MW is to be utilized, at a depth o about 3,200 m, by

means o a twin geothermal well, in order to provide a to-tal connected capacity o about 35 MWt to heat customerswhen the expansion is complete, and supply about 66 GWho heat, as part o a local district-heating scheme.

For the electricity project, investments o about 33million are required. The individual items o drilling andpower plant alone account or 82% o the total investment.The nancing volume whose structuring is to be optimizedamounts to about 40 million, since the planning expen-ditures (easibility studies, seismic analysis, discovery in-surance, etc.) and the negative cash-fow also need to be

nanced. The banks apply very strict standards to this, notonly with respect to the protability analysis and coverageo the risks in the project. Depending on the discovery in-surance concept, enough unds to cover most o the drill-

ing costs, or about 25-30% o the investments in xed as-sets, are regularly demanded. Obtaining these unds pres-ents considerable diculties, because o the decreasedprotability o such projects (more on this below).

District-heating projects involve higher volumes o in-vestment, unless an existing district-heating network canbe used. In the example, they amount to about 46 mil-lion, o which about 42% is accounted or by the distribu-tion network, and 23% by the drilling. Ater the large ini-tial expenses or drilling, the thermal-energy plant, and

the basic network, the investments continue or the ve toten years o the networks enlargement and increasingdensity. The unds or nancing must fow accordingly.Besides the investments, the planning expenses and thenegative cash-fow during the phase o establishing thenetwork, amounting to at least 5 million, must be cov-ered in this case, too. I only because o these initial losses,about 20% o a district heating project must be sel-und-ed. Apart rom this, district heating projects have been -nanced externally at low rates o interest, due to municipalguarantees or the loans. It remains to be seen to what ex-tent and under what conditions this can still be done aterthe reorm o EU rules on subsidies. Without a surety

rom the municipality, banks nd it dicult to nance adistrict heating project as well, because o the uncertain-ties o discovery, drilling, and sales.

PROJECT PROFITABILITYIn the electricity project, proceeds o 150.00 per mega-

watt-hour or supply to the grid under the Renewable EnergyAct [Erneuerbare-Energien-Gesetz = EEG] are obtainedor outputs up to 5 megawatts. In this example, annualelectricity sales amount to about 5.4 million. The main ea-tures on the expenditure side are service o the capital

PROFITABILITY ANALYSIS AND RISK MANAGEMENT OF GEOTHERMAL PROJECTS

Dipl.-Volksw. Dr. Thomas Reif, Scheidle & Partner, Augsburg, Germany


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2 GHC BULLETIN, JANUARY 2008

(depreciation and interest), and the material or station servicepower. Assuming a planning, construction, and commission-ing phase o three years, an electricity project achieves thebreak-even point when normal operation commencesin the ourth year (= rst year o operation). In the dia-gram, this is shown by the act that the EBT (earningsbeore taxes) curve is positive rom the start. Because

the payment or supply to the grid remains constant overthe period o the project, the prots do not rise in theelectricity project until the interest expense drops aterinstallments have been repaid. Increasing electricitycosts, which are to be expected, will cause a contrarytrend. The declining EBITDA curve (earnings beore in-terest, taxes, deprecation, and amortisation) is thus typi-cal o electricity projects. The EBITDA is also an im-portant parameter or bank nancing, since it should al-ways be signicantly higher than the payment burdenor debt repayment, interest, and re-investment, in orderto ensure the long-term credit rating o the project. Thecloseness o the EBITDA curve to the nancing payment

burden during the rst ten years o the project showshow dicult the nancial situation o electricity proj-ects is, at present. During the 21-year period o paymentor supply to the grid under the Renewable Energy Act,the return on equity is only about 9%. This is not con-sidered adequate in view o the project risks, so that it isdicult to acquire equity capital or geothermal proj-ects on the capital market. The main reason or this poornancing situation is the costs o drilling, steel, andelectricity, which have risen by up to 50% rom those in2004. Beore this cost increase, marketable project re-turns o about 15% could be presented. In order to re-

store the promotion eect intended by the amendment othe Renewable Energy Act in 2004, the payment or sup-ply o geothermal electricity would have to be raised to 175-180 per MWh.

In the case o the district heating project, the sales arethe product o the heating capacity provided in the net-work, the amount o heat sold, and the heat price ratesapplied. A natural limit is imposed on the price by thecompeting sources o energy oil, gas, wood chips, etc.And the rate scale must be designed so as to give an in-centive to switch to geothermal heating. Here too, the

capital costs dominate the expenditure side. The expendi-ture on supplies, which is also signicant, eatures, in addi-tion to the operating power or the geothermal and networkpumps, the energy inputs or peak-load, standby-load, andpossibly intermediate-load supply. In contrast to the elec-tricity project, in a district heating project it is not possibleto break even upon commissioning. The EBT curve in thediagram shows that the break-even point can be reached a-ter about ten years. During this lean period in the district-heating project, the EBITDA is also less than the install-ment, interest, and re-investment payments, so that the proj-ect can only be kept in a nancial equilibrium by a singlehigh input or successive inputs o equity capital. Because othe high starting losses, the (municipal) providers o equitycapital obtain a return o about zero percent during the ini-tial years o the project, and only about 6.7% over the thirty-year duration imputed or cost accounting. In contrast toelectricity projects, district-heating projects have a risingEBITDA curve. The expansion o sales by means o increas-ing the density o the network only causes minor additionalexpenses or material, as long as the available geothermaloutput is substantially higher than the intermediate load.The heating utility thereore benets rom the economies o

scale per MWh in labour, administrative, and other operat-ing expenses as the volume o sales increases. In addition,there are the economies o scale or depreciation and inter-est, which are refected in a considerable increase in EBT.However, all this presumes that the prices or close-by dis-trict heating will rise moderately over the longer term, inour example by about 2.7% per annum. Without price in-creases, district-heating projects do not reach the break-evenpoint at present. Prices or geothermal heat that cover costsrom the start are not (yet) competitive at this time. The util-ity can prot rom the assumed rise in the prices o compet-


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ing sources o energy by an appropriate structuring othe escalation clause, while limiting the eect o this riseon the customer. In this way, both parties benet. It willbe necessary to make sure that the prices o geothermalheat increase only moderately in the longer term, so as toprovide a continuing incentive to utilize this practicallyCO

2-ree source, and not orce the customers to insulate

more thoroughly or lower their room temperatures orbudget reasons. Such negative quantity eects would en-danger the protability o the project or the utility again.I oil and gas prices continue to increase substantially inthe next ew years, the starting conditions or geothermaldistrict-heating projects would improve considerably,due to the higher initial sales prices or heat.

CRITICAL PARAMETERS SENSITIVITY ANALYSIS

In order to evaluate the sensitivity o the protabilityo such projects to changes in the relevant parameters, acomprehensive project simulation, with more than tygeological, technical, and management variables is em-

ployed. The results are shown in separate diagrams orthe electricity project and the district-heating project.The project protability is shown on the Y axis, and theparameter variations in steps o one percent rom +10%to -10% on the X axis. The steeper the curves shown are,the more strongly the project reacts to even small chang-es (other things being equal).

In the case o the electricity project, the initial return oninvestment is 9%. A reduction o the delivery temperatureby 4%, o the discharge rate or the eciency o the powerstation by 7%, o availability by 10%, or an increase in to-tal investment by 10% suce to make the project unprot-able (zero rate o return). The development o electricityprices, the costs o borrowed capital, and the debt-equityratio are at least not critical or the project.

The case o the district-heating project presents a dierentpicture. The initial return on investment is 6.7%. A reductiono the price or heat by 8% or an increase in the invested sumby about 12% make the project unprotable (zero rate o re-turn). A reduction in the nal density o customer service con-nections by 10% also has a strong eect. The reduced heatsales lower the rate o return to about 3.5%. The other param-eters, on the other hand, are at least not critical to the project inthis example.

The point to keep in mind is that the underground opera-tional actors, namely the richness o the eld, drilling tech-nology, and drilling costs are decisive. Even slightly lessrich discoveries make an electricity project unprotable.Since excess drilling costs, i.e. investments, reduce the re-turn on an electricity or district-heating project substantial-ly, particular attention must be paid to the planning o thedrilling, the selection o the drilling company, and so on.Insurance coverage or this aspect would be desirable (seethe ollowing section).

RISK AND THEIR MANAGEMENT

The sensitive response o the projects rate o return tochanges in the parameters o the computer simulationsmakes it clear that geothermal projects are nancially risky.For one thing, every project aces the usual business risks,such as budget over-runs, increases in interest rates, delays,etc. The classical instruments o project management mustbe used to limit these risks. The initiators o the project mustrun protability simulations in order to analyse varying sce-narios beore implementing the project, and update the re-sults as the project progresses. Reserves must always beplanned or in the nancing. Business risks can also be lim-

ited urther by suitable structuring o the contracts with thepartners in the project (drilling companies, power-plantsupplier, civil-engineering companies, et al.).

When the project is implemented, its initiators rst bearthe drilling risk, that the drilling company will not achievethe objective at all, or not within the time predicted, and thuswithin budget, or that the well proves not to be usable orpumping the thermal water. Part o this risk can be passed onto the drilling company in the contract (e.g. by means oturnkey contracts, instead o the usual day-rate contracts).


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But the act must not be overlooked that such a displace-ment o the risk, i possible at all in the conditions prevail-ing in the drilling market, will result in considerably high-er drilling costs in the tenders. What strategy is promisingmust be decided rom case to case. It remains to be seenwhether it will be possible to insure against the drillingrisk. Marsh, the insurance broker, inorms us that the drill-ing risk will at least in the uture be covered in his com-prehensive geothermal policy.

The geological risk (non-discovery, partial or other dis-covery) is the main risk o an electricity project. It can bereduced by reprocessing old seismic analyses and prepar-ing new ones. The remaining risk must be covered eitherby equity capital or by a discovery insurance policy.This orm o insurance is not yet generally available. Asar as we know, upgrading measures or wells have beeninsured by Munich Re-Insurance (Mnchner Rckversich-erung). The approach chosen by the author, in collabora-tion with Swiss Re, is aimed at comprehensive insuranceo both the thermal potential to be utilized by means o thewell, and also the absorption capacity o the injection wells

and any upgrading measures.

Because o the still insucient data available, a rela-tively high premium o 5% to 20% o the net drilling costs depending on the site-specic risks must be paid orthis comprehensive discovery policy. In addition, thereare the engineering and operating risks related to the gen-erating station and/or the district-heating network. Thereare standardized insurance solutions to the classical oper-ating risks. And, as or any other major acility, particularattention must be paid to the know-how o the planner and/or the plant manuacturer.

Specically or the generating stations, the project ini-tiators will demand a guarantee o plant availability andquantities o electricity generated or the rst years o op-eration, backed up by securities rom the manuacturer. Inorder to deal with the nancial risks o a ailure o thedelivery or injection pumps, almost all projects have be-gun to keep standby pumps or themselves, or in combina-tion with neighbouring projects.

LEGAL ASPECTSThe typical questions o contract, tax, and company law

orm part o the background o every successul geother-mal project. Unnecessary burdens should be avoided, and

arrangements made to ensure confict-ree project man-agement, especially i several initiators are collaboratingas partners or shareholders. This applies both to privateconsortia and to intermunicipal geothermal projects, withtheir necessarily diverging local needs and nancial lee-way. Particular attention must be devoted to the projectand contract structures in the case o public-private part-nerships, such as i private exploration and municipal con-struction and operation o the piping network are to belinked via a long-term district-heating contract. That themajor investments in drilling, power station, etc. require a

suitable contractual basis has already been mentioned.When acquiring the plots o land and running the pipe-lines, one must make sure that the utility obtains a perma-nently secured legal position. The structuring o the pricescales or the district-heating projects takes place in amedley o energy, contract, and anti-trust law, and ormsthe essential basis or the nancial success o a district-heating project. It should also be mentioned that the mu-nicipal projects are subject to the regulations governingawards o public contracts and EU rules on subsidies. Ocourse, questions o mining law, rom the application oran exploration licence to the exploitation licence and theocial monitoring o well operation, also play a role; andthe necessary permits or building and operating the pow-er plant, including the cooling process, are also needed.

CONCLUSIONSIn the Molasse region o southern Bavaria, especially in

the greater Munich region, avourable prerequisites orgeothermal district heating and/or power generation existin principle. Project initiators can rely on support rom

competent contacts or geology, engineering services,business concepts, and legal arrangements in the manioldtechnical, commercial, and legal challenges. Furthermore,one can hope or urther engineering developments o theOrganic Rankine Cycle (ORC) and the Kalina cycle in therelevant temperature range o 110C to 140C.

The sensitivity analyses show that changes in eciencyor generating-plant availability have a substantial positiveeect on a projects protability. Pumping conditions canalso be improved. A District Heating Act governing inputo heat generated rom renewable sources o energy intothe grid is provided or in the agreement establishing thecurrent Christian-Democrat/Social-Democrat coalitiongovernment; its concrete structure is currently under dis-cussion, and a drat bill is expected in the medium term.Evaluation o the Renewable Energy Act and its amend-ment, including the payment rates, is pending. A deep-well bonus or locations at which it is necessary to drill tounusual depths to exploit geothermal heat is also beingdiscussed. The projects in the Molasse region would ben-et rom this. Increased subsidies or innovative concepts,such as hybrid ones, is also possible. Thereore, there is noreason or pessimism, despite all the nancial dicultiesand risks o geothermal projects described. The utilizationo this very promising source o energy is only begin-

ning.

ACKNOWLEDGEMENTReprinted with permission rom Geothermal Energy

in Bavaria, 2007. Walter Frst, Managing Director, b-werbeservice, Munich, Germany.


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THE ROLE OF THE COMMUNITIES IN THE UTILIZATION

OF SUBTERRANEAN GEOTHERMAL ENERGY

UNTERHACHINGS GEOTHERMALPROJECT

According to Clause 83 o the Bavarian Constitution,

towns and communities in Bavaria are required to providebasic living standards in areas under their jurisdiction.Clause 28 o the Federal German Constitution also reers tothis undamental obligation on part o the community.

Among other actors, a reliable supply o energy contrib-utes to ones living standards. Communities can mange thisin accordance with the principle o subsidiarity. They caneither realize this on their own or use the resources o out-side institutions and companies. The essential charge o theconstitution is to guarantee the basic necessities to the citi-zens. This oten results in setting up municipal or commu-nity works which apart rom guaranteeing an adequate wa-

ter supply, garbage and sewage disposal, also provides elec-trical energy and heating within its areas. A supply o en-ergy by the community occurs especially in areas when itcan rely on its own resources.

Due to the act that the provision o usable energy in anyorm is connected with the transormation o primary en-ergy and depending on the choice o the latter source resultsin climate relevant emissions. Communities are thereoreobliged to adopt precautions regarding climate protection.The conservation o an intact climate is an extremely im-portant part o ones living standards. The Bavarian Consti-tution does not stipulate this explicitly as the duty o thecommunity, but it is seen as a communal responsibility asmentioned in the concluding document o the United Na-tions Conerence on Environmental Protection and Devel-opment (UNCED) held in 1992 in Rio Agenda 21.

The community o Unterhaching (just south o Munich)has been dealing with the problem o climate protectionsince the 1990s and the supply o an ecient and alterna-tive source o energy.

Important measures towards realizing this included -nancial support or using potential energy saving methods,the promotion o alternative orms o energy or domestichouseholds, the construction and development o inter-con-

nected power-heating systems as well as solar thermal andphotovoltaic plants, nally setting up the Geothermie Un-terhaching GmbH & Co. KG, a communal company or theutilization o deep subterranean geothermal energy.

A requirement or the exploitation o subterranean geo-thermal energy in Unterhaching and in general in the Al-pine oothills is the avourable geological ormation o sotlight sandstone in southern Bavaria. This is suitable or theeective use o calcareous limestone as a high yield aquier.The expected temperature in the aquier exceeds 100C es-pecially in regions in a line south o Munich.

On the basis o a easibility study by the Institute orGeological Community Tasks (GGA, Hannover) dealingessentially with the analysis o the results o oil and gas

drillings carried out in southern Bavaria until 1990, thelocal council decided to go ahead with the task o realiz-ing the two stage usage o a hydrothermal source o energy(Fig. 1). The requirements or a successul realization un-der viable economic conditions were as ollows: watertemperature in excess o 115C, a yield o 150 l/s, the con-struction o a closed thermal water cycle on the basis otwin boreholes, as well as building o power stations withpower-heat coupling or the ecient conversion o the sub-terranean geothermal energy to electrical and thermal en-ergy or local supply, independent as ar as possible o os-sil energy suppliers. This would guarantee energy suppliesand at the same time make a signicant contribution to

climate protection.

A decisive actor in deciding to adopt this orm o ener-gy was the economic saeguard provided by the Renew-able Energy Law (EEG) o the Federal Republic o Ger-many which over a period o 20 years guarantees a xedpayment by the regional energy supplier or the delivery oelectricity generated by geothermal energy.

Figure 1. Schematic view of a geothermal power plant

for the operation of a power-heat coupling system.

Dr. Erwin Knapek, Mayor of Unterhaching, Germany


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Planning began in the spring o 2002 ater being allocatedan exploratory area by the Bavarian State Ministry or Eco-nomics, Inrastructure, Trac and Technology (BStM-WIVT). The hydrogeological values or temperature andyield were xed in the allocated text. This was certainly cou-rageous, but it provided to be right.

could cover a basic minimum power supply. Reduced heat-ing requirements in sparsely populated areas, would resultin a loss o a source o income thereby preventing theachievement o a better economic result. This economic as-pect has also to be urgently considered by the communities.

Furthermore the location o the borehole in the limestoneaquier is decisive or the drilling plan and or the economicsuccess o the project. The analysis o seismic proles or

the region around Unterhaching is helpul. This resultedrom earlier investigations o exploratory oil drillings. Thisprocedure is certainly advisable in order to increase thechances o realizing a high yield, because rom the seismicprole analysis one can localize gaps in the limestone whichcan then be accurately targeted when drilling. Boring inlimestone can become a risky business.

In order to cover any risks involved, the local council re-quested an insurance or the Project Unterhaching to coverthe success o the undertaking. This was achieved aterlengthy negotiations. The BStMWIVT supported this rstever insurance or a private enterprise thereby saeguarding

the success or partial success o an exploratory drilling inUnterhaching. For the insurance company, rm tempera-ture orecasts and a data based evaluation concerning thesouthern Bavarian sandstone (Molasse) were the determin-ing actors. The drillings were carried out with the ollow-ing results: approx. 123C and >150 l/s. The expectations othe easibility study were exceeded. Consequently there wasno need to make any claims on the insurance. Despite wide-spread knowledge o geology and success o the project, itmust be mentioned that technical diculties were encoun-tered when drilling as a result o which schedules were ex-ceeded. A discussion o these technical diculties would beoutside the scope o this article. Basically they are avoidable

as shown by some very successul drillings in the Molasse.They were also carried out within the allotted time rame inorder to limit the technical risks it would be necessary tokeep in mind all previous diculties and setbacks.

Derrick with 54m height for drilling the reinjection drill-

hole. At the rear side one can see the assembled drilling

rods with a length of 27m.

View upward to the top of the derrick along side the

drilling rod. In order to gain time for the round trip

three drilling rods of 9m each are assembled.

The planning o the boreholes is decided by the data orthe expected water temperature and yield set down to theeasibility study. In order to generate electricity with a yieldin excess o 100 l/s, a larger borehole is necessary than onerequired or a similar geothermal project with a lower yield.In other words the easibility study or a project o this kindis extremely important or deciding or or against the use ohydrothermal primary energy in a power station based onpowerheat coupling. The water temperature is the decisiveparameter or this decision. I it is too low, a two stage utili-sation o hydrothermal energy is impossible thereby signi-cantly restricting the chances o long term economic suc-

cess. The easibility study is decisive or the economic via-bility and the overall eciency o the plant.

This meant, or example, that or the Project Unterhachingthe aquier had to be tapped with an 8-1/2 inch diameterborehole with meant an outer bore diameter o 22 inches orthe upper pipe. Using hydrothermal energy or supplyingheat only an e.g. 6-inch bore diameter in the aquier wouldhave been sucient. A subsequent correction o the drillingresults is either virtually uneasible or cannot be expressedin economic terms. One cannot or only to a slight extentrealize the ecient transormation to electrical energy which


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quirements. For periods o low heat demand, geothermalenergy is optimal or generating electricity. A urther ap-plication or the use o this energy would be the delivery oheat in the summer months to operate absorber rerigerationplants. Furthermore it is certain that ater re-injecting thethermal water ollowing its usage or energy transormation,heat energy which is not required is not dissipated by bal-ance coolers. Ater its usage as an energy supplier, thermalwater is returned to the limestone energy storage via a closedcircuit.

For the successul transormation o the powerheat cou-pling it is o primary importance that the working o theentire plant is in the hands o one operator in order to guar-antee reliable delivery o heat energy. In accordance withEEG conditions, a avourable return on capital is to beachieved alone by generating electricity. Above all this ap-plies when signicant investments have to be made whensetting up long distance networks. Splitting the generation oelectricity and heat delivery between two operators (compa-nies) should then be carried out when both partners contrac-tually on the prior importance o heat delivery.

Heat is utilizable primarily in one location, because trans-port over very long distances results in a signicant loss oheat. Consequently communities play a very important roleas partners or private investors, especially those who wantto invest in the generation o electricity. They are oten theonly partner as they are also customers or residual heat a-ter the generation o electricity. Ater the allocation o ex-ploratory sites by the BStMWIVT, the utilisation o hydro-thermal energy or heat supply is o great signicance, butits transormation to electrical energy is o prior importance.In this case a denite participation o the communities re-garding the allocation o exploratory rights is indispensable

and has to be accorded top priority. Until now successulheat energy projects based on subterranean geothermal en-ergy in the Molasse region were carried out with communi-ties.

Unterhaching is an example that only the community is ina position to build geothermal power stations even i such aproject has to be nanced only with bank credits. Economicoperation can certainly be achieved on a long term basis. Aurther advantage regarding communities is that they do nothave to realize a high return on capital expenditure rom thestart. Their main priority is to provide their inhabitants witha reliable supply o energy at moderate prices. Geothermal

projects run by the community are the best possible guaran-tee or achieving this.

ACKNOWLEDGEMENTS

Reprinted with permission orm Geothermal Energy inBavaria, 2007. Walter Frst, Managing Director, b-werbeservice, Mnich, Germany. Inormation on Unter-haching can be ound on their website: www.unterhach-ing.de.

Disassembly o drilling rods ater fnishing a drilling tour.

Based on the exploratory drilling the Geothermie Unter-haching GmbH & Co. KG built a power station working ona powerheat coupling modus. The central plant is based oninfow technology according to the Kalina process, the real-

ization o which is promoted by the Federal EnvironmentalMinistry (BMU). Further important elements are the heatexchanger or the supply o heat over long distances (districtheating), a peak load and redundant heating plant, a longdistance heat network and a thermal water system or re-in-jection.

Delivery o heat is o prime importance as required by acoupling o power and heat. Optimum usage o the Kalinaprocess or generating electricity requires a temperature oapproximately down to 60C or the thermal water whichhas to be reheated to approximately 85C when used or dis-trict heating. This must not be carried out using ossil pri-

mary energy. For the operation o a powerheat coupling ornormal heat requirements a constant volume o the thermalwater required or reheating is conducted via a by-pass to theheat exchange plant (fow plant). In case o long periods overy cold weather, the operation o the Kalina plant can becut back or shut down completely. Consequently instead obuilding a 4 MW power plant, a reduced unit with a 3.35MW output is adequate. As a result a geothermal wattage o40 MWt is sucient or providing 60% o private householdheating in Unterhaching, a community o 22,500 citizens.

Moreover heat supply on the basis o powerheat couplingand transormation o hydrothermal energy in electrical en-

ergy is CO2 ree. This means a possible reduction o CO2emissions in Unterhaching by 40,000 tons per year, or up to2/3 o the emission value dened in the heat atlas o 1998 orUnterhaching. The eciency o the total plant can be in-creased to approx. 85% using the principle described above.The delivery o heat energy is a major economic actor andlocation in Unterhaching would be o great uture benet toits inhabitants. The community can be supplied with heatenergy at a avourable price. The energy is virtually inde-pendent o ossil energy sources except or redundant orpeak load energy or repair operations or extreme heat re-


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CONCEPT OF HYBRID POWERIn many regions in Germany, the temperature o geo-

thermal brine that can be tapped in natural reservoirs gen-

erally stays below 120C. The production o electricity is

economically not easible in most o these areas, because

with low temperatures the degree o eciency and thus

the amount o produced power is small. With the new

hybrid concept, it is now possible to eed in energy rom a

second renewable energy source into the geothermal pow-

er cycle while raising the temperature at the same time.

Electricity generation out o a geothermal energy source

depends on the local geological situation. Reservoir tem-peratures lower than 120C are usually ound i reservoir

rocks are not deep enough or i the temperature gradient is

too low.

The hybrid concept was developed to help a community

in the Upper Rhine Valley realize a geothermal power

project in spite o these unavorable circumstances. There,

the geothermal power plant will be coupled with a biogas

power plant. This project is now being implemented in the

village o Neuried or the rst time worldwide.

In a ermentation process, methane is produced and thencombusted in gas engines. These engines drive a generator

which eeds electricity into the grid. With the help o a

heat exchanger, the heat o both the mufers and the cool-

ing system o the engines are ed into the power-producing

cycle o the geothermal power plant. I the temperature o

the geothermal power cycle amounts to e.g. 105C, the

cycle can be heated up to about 120C, depending on the

size o the biogas plant. This increase o eciency is cal-

culated or a power plant built under the local conditions

o the Upper Rhine Valley. A temperature rise o more

than 10C results in increasing the gross degree o e-ciency o the geothermal power production by 0.8%. In

addition, up to 2.4 MW o heat can be supplied or the

geothermal power process. Thus, by the hybrid concept,

the geothermal plant will generate about 500 kW more

power leading to an increase o 10% compared to the com-

mon stand-alone solution.

In addition to this improvement o eciency, more syn-

ergy eects arise: The waste heat rom the thermal power

process can be sold to neighboring customers. The heat

THE CONCEPT OF HYBRID POWER PLANTS IN GEOTHERMAL APPLICATIONS

Dr. Ing. H.Kreuter, GeoThermal Engineering GmbH, Karlsruhe, GermanyDipl. - Ing. B. Kapp, Aufwind Schmack, Regensburg, Germany

Geothermal power plant Unterhaching (Siemens I+S).


11/20


can be used in many dierent ways: or example or

private or oce heating, swimming pools or even or veg-

etable production in greenhouses. Heat is mainly needed

during winter time. In contrast to this seasonal usage, the

waste heat o the biogas plant is ed into the geothermal

power plant year round. The waste heat o the geothermal

power plant is available or the customers.

The hybrid plant in the Upper Rhine Valley will gener-

ate up to 44,000 MWh o power per year supplying up to

28,000 people with electric power. In comparison to a con-

ventional natural gas power station, the emission o CO2

can be reduced by up to 18,000 tons per year.

By combining a geothermal power plant with another

renewable energy source, the generation o geothermal en-

ergy can be extended regionally. Geothermal reservoirs

with temperatures below 120C can thus be made prot-

able. This doesnt only apply to parts o the geothermi-

cally avored Upper Rhine Valley but even more so to

other regions in Germany. Especially in the Molasse Basin

in Bavaria, where the temperatures o the brines in the

Malm Karst reservoir average between 80C and 120C,

the hybrid concept provides a high potential. Hence, proj-

ects, that wouldnt be protable being based on geother-

mal energy only, can now be realized by using the hybrid

concept.

Geothermal power plant detail (exorka).

Biogas power plant (Schmack Biogas).

Geothermal power plant Husavik, Iceland (exorka).

To guarantee a constant heat supply, back-up systems

need to be installed, usually basing on conventional heat

sources like oil and gas. By combining two renewable en-

ergy sources, there will always be a renewable back-up

system available in case one o the two sources should be

out o order, e.g. in case o servicing. Hence, there is no

more need or a conventional back-up system. I the geo-

thermal power plant is down, the biogas waste heat, which

is normally being ed into the geothermal cycle, can then

be used or direct heating. The waste heat o the geother-mal power plant itsel suces or the direct heat use sys-

tem.

Both renewable energy systems produce base load elec-

tricity. An uptime o more than 8,000 hours a year is pos-

sible (91% load actor). Thereore, a complex control sys-

tem is necessary which has to adjust the geothermal

power circuit to the variation in load o the biogas sys-

tem, o the direct heat use system and to the variation o

the ambient temperature.

Biogas power plant (Schmack Biogas).

ACKNOWLEDGEMENTS

Reprinted with permission rom Geothermal Energy in

Bavaria, 2007. Walter Frst, Managing Director, b-

werbeservice, Mnich, Germany.


12/20


GEOTHERMAL ENERGY USE COMPARED TO OTHER RENEWABLES

John W. Lund, Geo-Heat Center

Renewable energy, which includes production rom geo-

thermal, wind, solar, biomass, hydroelectric and wave/

ocean/tides, is gaining interest rom politicians and devel-

opers due to global warming predictions and the high cost

o oil. Development is also stimulated by the establish-ment in many states o Renewable Portolio Standards

(RPS) that are to be implemented over the next 10 to 30

years. We in the geothermal industry tend to look only at

our resource, but putting geothermal energy production in

perspective with the other renewables, helps to understand

their place in the market along with strengths and weak-

nesses. Thus, this article is an attempt to compare the

development o all renewable energy types. Data on re-

newables are available or the world rom the International

Energy Agency (IEA), but, unortunately the latest data

are rom 2004 with some estimates or 2005 (IEA, 2006).

The ollowing tables are based on data rom the IEA pub-

lication, supplemented by several other sources.

World energy is described in terms o Total Primary En-

ergy Supply (TPES), which is all energy consumed by end

users, excluding electricity but including the energy con-

sumed at electric utilities to generate electricity. (In esti-

mating energy expenditures, there are no uel-associated

expenditures or hydroelectric power, geothermal energy,

solar energy, or wind energy, and the quantiable expendi-

tures or process uel and intermediate products are ex-

cluded.)

To put ossil uels and nuclear in context with renew-

ables, the world TPES was 11,059 Mtoe (million tonnes o

oil equivalent; one Mtoe = 4.1868 x 104 TJ = 3.968 x 107

MBtu = 11,630 GWh), o which 13.1% or 1,448 Mtoe was

produced rom renewable energy sources in 2004. This is

equivalent to 463.4 million TJ (128.7 million GWh) and

60.6 million TJ (16.8 million GWh) respectively. The

various shares o energy are as ollows:

Table 1. 2004 Fuel shares in World Total Primary

Energy Supply.

waste, and gas rom biomass reerred to as biomass in

this paper) accounts or 79.4% o the total as shown in the

ollowing table.

Table 2. 2004 product shares in world renewable energysupply.

Looking at renewables in more detail, we nd that re-

newable combustibles and wastes (including solid bio-

mass/charcoal, liquid biomass, renewable municipal

I we just consider electricity production, then the rela-

tionship between renewables and other uel types are

shown in Table 3.

Table 3. Fuel shares in world electricity production in

2004.

Within the renewables share (17.9%), a majority, or16.1%, is produced rom hydro, 1.0% rom biomass and

0.8% rom geothermal, wind, solar and tide combined

(one third o which is rom geothermal).

Unortunately, capacity actors (number o equivalent

ull-load hours o operation per year or electricity genera-

tion) and energy generated or each o the renewables, are

only available rom IEA and OECD (Organization or

Economic Co-operation and Development) countries

which include most o western Europe, Czech Republic,

Hungary, Slovak Republic, Canada, United States, Austra-

lia, New Zealand, Turkey, Japan, Korea, and Mexico. A

summary o renewables or OECD countries is shown in

Table 4. The majority, 80.5% o the generated energy

(around 1,650,000 GWh/yr) came rom hydro, ollowed

by 12% rom biomass, 5.4% rom wind, 2.0% rom geo-

thermal, 0.12% rom solar and 0.04% rom tides. OECD

countries supply only 21.8% o world renewables while

consuming 49.8% o world TPES. However, when consid-

ering new renewables, OECD countries account or most

o the production o wind, solar and tide energy in 2004

(86.3%).


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EXAMPLES OF RENEWABLESDEVELOPMENT IN SELECT COUNTRIES

As examples o the use o renewables, data rom the

United States, Germany and China are provided (IEA

2006):

United States: Total renewables produced are 97.76

Mtoe or 4.2% o TPES (2,319 Mtoe); electricity: 393,918

GWh/yr or 9.3% o total electricity produced, which

comes mainly rom hydro and biomass.

GROWTH OF RENEWABLES

Since 1990, renewable energy sources have grown at an

average annual rate o 1.9%, as compared to the world

TPES o 1.8% per annum. Wind has had the highestgrowth rate o 24.4%; however, rom a small base in 1990.

The second highest growth was rom non-solid biomass

combustible renewables and waste, such as renewable mu-

nicipal waste, biogas and liquid biomass, averaging 8.1%

annually since 1990. Solid biomass grew at a rate o 1.6%

per annum. The bulk o the solid biomass (87.4%) is pro-

duced and consumed in non-OECD regions, where these

developing countries such as in South Asia and Sub-Saha-

ran Arica use non-commercial biomass or residential

cooking and heating (IEA, 2006).

Most o the growth in hydro power took place in non-OECD regions, where it had a rate o 3.3% annually, com-

pared to OECD countries at 0.6% annually. The remain-

ing hydro potential appears to be in non-OECD countries,

as indicated by Chinas Three Gorges Dam which repre-

sents a 1 to 2% increase in the world production, estimated

at 18,200 MW o additional capacity.

Renewable electricity generation grew on average 2.1%

per annum worldwide, which is lower than the total elec-

tricity generation at 2.8%. The total rom renewables was

19.7% o global electricity in 1990, but ell to 17.9% in

2004. This is due to the slow growth o renewables, espe-

cially hydro power in OECD countries.

Based on data rom the World Geothermal Congress

2005 (WGC2005), the capacity growth (MWe) since 1995

o geothermal energy was almost two-old or direct-use

(6.6% annually without heat pumps) and 1.3 times or

electric power capacity (2.7% annually). In terms o en-

ergy production (GWh/yr), the growth or direct-use was

almost two-old (6.6% annually without heat pumps)

and 1.5 old (4.1% annually) or electricity generation

Germany: Total renewables produced are 6.66 Mtoe or

11.3% o TPES (59 Mtoe); electricity 73,350 GWh/yr or

14.3% o total electricity produced, which comes mainly

rom wind and hydro.

China: Total renewables produced are 250.90 Mtoe or

15.6% o TPES (1,609 Mtoe); electricity: 356,129 GWh/yr

or 20.7% o total electricity produced, which comes main-

ly rom hydro and biomass.


14/20


REFERENCESBertani, R., 2005. World Geothermal Power Generation inthe Period 2001-2005, Geothermics, Vol. 34, No. 6 (Dec.),Elsevier, Amsterdam, Netherlands, pp. 651-690.

EIA, 2004. Energy Inormation Agency, Washington D.C.www.eia.doe.gov.

IEA, 2006. Renewables Inormation 2006 IEA Statistics,International Energy Agency, Paris, France, 247 p.

Li, J., Z. Wang, L. Ma, and J. Fan, 2007. Renewable EnergyMarkets and Policies in China, Proceedings of the ISES SolarWorld Congress 2007, Beijing, China.

Lund, J. W., D. H. Freeston and T. L. Boyd, 2005. WorldwideDirect-Uses o Geothermal Energy 2005, Geothermics, Vol.34, No. 6 (Dec.), Elsevier, Amsterdam, Netherlands, pp.691-727.

(Lund et al., 2005; Bertani, 2005). Geothermal (ground-

source) heat pumps have been the leader to worldwide

growth, with the installed capacity growing at 23.6% an-

nually and the annual energy use at 19.6% annually

mainly in the North America and Europe.

Estimates or the uture point to major growth in wind

and solar electricity generation, with slower growth in

geothermal, hydroelectric and biomass. Tide/ocean/wave

are in their inancy with unknown growth. By 2010 the

expected electrical generation capacity or wind will be 74

GW, solar 20 GW and geothermal 11 GW. Hydroelectric

will grow primarily in non-OECD countries such as Chi-

na, India and in Latin America. Biomass growth will be

strong, especially in OECD countries. By 2004, 48 coun-

tries had adopted some sort o policy aimed at encourag-

ing renewable development o which 14 were rom devel-

oping countries. These policies include: 1) eed-in taris,

2) renewable portolio standards, 3) direct capital invest-

ment subsides or grants, and 4) tax incentives. Europe

will most likely lead in developing renewable energy, dueto strong commitments by the various European Union

members.

SUMMARY AND CONCLUSIONS

In summary, each o the various renewables have cer-

tain limitations, some are better suited or electric energy

production and others or direct heating. Some such as

solar panels and wind machines can be installed easily and

in a short period o time, whereas hydro and geothermal

can oten take more time, especially with large projects.

Solar obviously depends on daytime sun light and night-

time storage; wind can be intermittent and also dependson storage; hydro is subject to drought as recently experi-

enced in east Arica and New Zealand and limited sites

especially in OECD countries; biomass depends on a sup-

ply o uel and can contribute to greenhouses gases and

particulate emission; tide and ocean is limited to areas

where sucient changes are available and where it does

not interere with navigation; and even though geothermal

is base load or power and can supply the ull load or heat-

ing, it is site specic. Thus, all renewables have limita-

tions, but must be supported as they can complement each

other. Only geothermal heat pumps have worldwide ap-

plication or both heating and cooling.

Renewable resources as a total have a signicant impact

o the Total Primary Energy Supply (TPES), currently

providing 13.1% o the TPES installed capacity and 17.9%

o the electrical energy production in 2004. Growth over

the period 1995-2004 o installed capacity o renewables

has been 1.9% annually, and or geothermal it has been

2.7% annually or power generation and 6.6% or direct-

use (without geothermal heat pumps). Geothermal heat

pumps have increased 23.6% annually over the same pe-

riod.


15/20


ABSTRACT

Since the early 1980s Nevada Geothermal Utility Com-

pany has provided space heating and domestic hot water tohomes in a southwest Reno neighborhood. The system not

only heats 110 homes, but also provides heat or domestic

hot water, heat or 21 swimming pools, seven hot tub spas,

and one driveway de-icing. Four wells have been drilled or

production and injection o geothermal fuids. Two wells,

WE-1 and WE-2 are the geothermal supply wells. Well

WE-3 serves as the primary injection well. Geothermal

fuid at a temperature near 200F (190-205F) is pumped

rom production well WE-2. The 40 hp turbine pump sup-

plies the pressure to orce the geothermal fuid through the

fat-plate heat exchangers and down the injection well. Cus-

tomers currently pay 75% o the price o natural gas orspace and hot water heating. A comparison o homes heated

with natural gas and homes heated with geothermal energy

show a savings between 17 and 22 percent or homes heated

with geothermal energy.

BACKGROUND

Nevada Geothermal Utility Company (NGUC) was in-

corporated in Nevada on April 20, 1981. On March 11, 1983,

the public service commission o Nevada issued Geother-

mal Operating Permit (GOP-001) to Nevada Geothermal

Utility Company or a geothermal space-heating district.

From its humble beginnings in 1983 using a down hole heatexchanger to heat 10 homes to the present, where one pro-

duction well supplies 400 gallons per minute (gpm) during

peak load. The system not only heats 110 homes, but also

provides heat or domestic hot water, heat or 21 swimming

pools, seven hot tub spas, and one driveway de-icing.

The space-heating district is located in southwest Reno, in

what is known as the Moana geothermal resource area. A

hot spring, known as Moana Hot Springs, was the site o rst

use o the geothermal resource in a swimming pool in the

early 1900s. Several hundred homes, three churches, and a

nursery, in addition to NGUC, currently use geothermal fu-ids rom this resources or space and hot water heating.

Mr. Frank Warren, a real estate developer rom southern

Caliornia, envisioned heating homes with geothermal en-

ergy and was instrumental in providing the impetus or de-

velopment o the space-heating district. The rst phase o

the heating district consisted o a 60 home subdivision

known as Warren Estates. The rst homes in this subdivi-

sion used hot water heated by geothermal fuid to heat their

homes and supply hot water in 1983. The second phase o

the district heating system is known as the Manzanita Es-

tates and was developed in 1986. It consists o 102 lots sup-

plied with geothermally heated hot water. The subdivisionshad all utilities including electrical, water, gas, phone, sewer

and cable installed underground. Since geothermal heating

was the new kid on the block it was relegated to the bottom

o the trench.

GEOTHERMAL RESOURCE

The original Moana Hot Springs were centered in the NE

o section 26, T19N R19E. The area o known elevated

temperature in the near surace covers an area o approxi-

mately 3 square miles. The area extends rom the intersec-

tion o Plumb Lane and Virginia Street in the northeast,

south to South McCarran Blvd., then west to Skyline Blvd.,as shown in Figure 1.

NEVADA GEOTHERMAL UTILITY COMPANY: NEVADAS LARGEST

PRIVATELY OWNED GEOTHERMAL SPACE HEATING DISTRICT

Dennis T. Trexler, Nevada Geothermal Utility Company, Reno, Nevada

Figure 1. Sketch map of Reno-Sparks showing Nevada

Geothermal Utility Company (NGUC) service area and

the Moana Geothermal Area (not to scale).

Bateman and Scheibach (1975) studied the Moana geo-

thermal resource. They canvassed the known users o the

resource and determined that at the time o their study 35

homes were heated with the geothermal energy. Most used

individual wells with a down hole heat exchanger, a U-

shaped tube inserted in the well, in which municipal drink-

ing water was circulated. The heated water was then

pumped through baseboard radiators or orced air systems

to heat the homes. Well depths ranged rom 100 to 500 eet.

Wells with the highest temperatures (210F) are associated


16/20


with a series o north-trending aults zones. Garside and

Schilling (1979) provide a general overview o the geology

and geothermal resources o the area. A more detailed de-

scription o the controlling geologic actors and description

o the resource are provided by Flynn and Ghusn (1984).

In the vicinity o the Warren Estates wells, the geother-

mal reservoir appears to be associated with a highly perme-

able racture zone. Flynn (1985a) characterizes the zone,which was intercepted in both production wells, as being a

highly porous and permeable intravolcanic fow breecia o

the Kate Peak ormation. The Hunter Creek sandstone, a

sedimentary sequence consisting o sands, gravel, conglom-

erate and a thick section o diatomaceous siltstone overlies

the Kate Peak ormation. It is Miocene to Pliocene in age

(approximately 24 to 1.8 million years old) and varies wide-

ly in thickness and composition rom place to place. Locally

alluvium and glacial outwash overlie the Hunter Creek

sandstone.

GEOTHERMAL WELL FIELDFour wells have been drilled or production and injection

or Nevada Geothermal Utility Companys system. The

wells are located in the SW1/4 NW1/4 section 26, T19N

R19E M. D. B. & M.. Two wells, WE-1 and WE-2 are the

geothermal supply wells. Well WE-1 also serves as a sup-

plemental injection well. Well WE-3 serves as the primary

injection well and is permitted to receive a maximum o 300

gpm o the produced geothermal fuids. Well WE-4 was

drilled in 1995 as an injection well; however, it does not

produce or accept sucient quantities o fuids and is cur-

rently inactive.

WELL WE-1

This was the rst well drilled as part o the geothermal

space heating system. It is located at the brick building,

which houses the heat exchangers. The well was drilled in

April 1982 to a depth o 833 eet. It had a bottom hole tem-

perature o 201F. The static water level was 100 eet below

the surace. Initial fow testing indicated that the well could

be pumped at 450 gpm with 35 eet o drawdown ater 17

hours.

WELL WE-2

This well was drilled in 1985 to support the expansion o

the new subdivision (Manzanita Estates). The well was

drilled to a depth o 685 eet. Cuttings indicated that allu-

vium and the Hunter Creek sandstone occurred to a depth o

300 eet. Below the Hunter Creek there are approximately

300 eet o hydrothermally altered Kate Peak ormation

(blue clay). Unaltered Kate Peak ormation was encoun-

tered below the blue clay at 600 eet. At 615 eet a rac-

ture zone was encountered and lost circulation occurred to

645 eet. The temperature at the bottom o the hole was

isothermal at 210F. The hole was reamed to 17-1/2 inches

to 604 eet and 12-inch casing was cemented in place to this

depth. The static water level ater equilibrium was 105 eet

below the surace (Flynn, 1985a). A 72-hour pump test was

perormed in late June 1985. The average fow rate was 865

gpm. Maximum drawdown during the test was 45 eet.

Pump test data yield transmissivity values o 22,690 gal/

day/t and a storage coecient value o 0.00105 (Flynn,

1985a).

WELL WE-3

Well WE-3 was drilled in 1985 to a depth o 1,475 eet as

an injection well. Drilling encountered alluvium, Hunter

Creek sandstone, siltstone and blue clay to a depth o 1,040

eet. Kate Peak ormation, with numerous lost circulation

zones at 1,195, 1,345 and 1,460 eet, was penetrated below

the sedimentary sequence. A 12-inch casing was cemented

in a 17-1/2-inch hole to a depth o 1,090 eet. The hole was

re-entered with a 12-inch bit and drilling proceeded to a

depth 1,250 eet. Below 1,250 an 8-inch bit was used to drill

through several lost circulation zones to a total depth o

1,475 eet. The well was completed open hole below the

12-inch casing point at 1,090 eet. A maximum down hole

temperature o 198 F was recorded at 1,250 eet.

A 72-hour injection test was perormed ater cleaning out

the well using airlit. A constant fow rate o 450 gpm was

used throughout the test. At the end o the 72-hour test the

water level in WE-3 was 14 eet 11 inches below the surace.

This is an increase o 88 eet 1 inch over the static water

level o 103 eet. The water level in Well WE-2 was also

monitored. The water level increased by 1 oot over the stat-

ic level o 110 eet, indicating hydraulic communication be-tween the two wells. Flynn, (1985b) reported that based on

the injection test the injectivity o Well WE-3 was 8,500

gal/day/t. He also stated that a recovery test indicated an

injectivity value o 8,000 gal/day/t, which is in good agree-

ment with the injection test value o 8,500 gal/day/t. Flynn

(1985b) went on to state that using an average production

rate o 200 gpm the static water level ater 20 years o con-

tinuous pumping would be 51 eet below the surace.

WELL WE-4

Well WE-4 was drilled in January 1995 to a total depth o

1,625 eet. Lithologies encountered included alluvium,

Hunter Creek sandstone, and Kate Peak ormation. Eight

and one-hal -inch casing was cemented to 640 eet and a

6-inch liner was hung rom 600 eet to total depth (TD),

(Flynn, 1995). The highest temperature, or any well in the

Moana Geothermal Area, 234F, was measured in Well

WE-4 at a depth o 1,000 t. The well does not produce

sucient fuid or accept fuid in sucient quantities to be

used as a production or injection well. The well is shut in

at the present time.


17/20


FLOW RATE

Geothermal fuid fows are measured as instantaneous

fow reading rom a totalizing meter on a weekly basis.

Flow rates during the winter months vary rom 375 to 400

gallons per minute (gpm). During summer months the fow

rate o geothermal fuid is between 200 and 250 gpm. The

maximum instantaneous fow rate recorded was 440 gpm

during January 2004. Installation o new heat exchangers

this July should allow or a decrease in geothermal fuid

fow due to increased eciency.

TEMPERATURETemperatures o the geothermal fuids produced in 2006

are presented in Figure 2. During the rst hal o the year

temperatures remained relatively constant between 203 to

205F . Ater the installation o the new 40 hp motor and

pump in the production well the temperatures were lower, in

the 190 to 195F range, until the last two weeks o the year

where the temperature jumped up to 205F. The lower tem-

perature ater installation o the pump may refect the lack

o stress on the reservoir until late in the year when fow

rates were 400 gpm and the temperature o the produced

fuids climbed to 205F. The temperature o the injected

fuid ranges between 155 and 172F depending on the load.

CHEMISTRY

The geothermal fuids consist o dilute (900 to 1,300 part

per million [ppm] TDS) sodium-sulate waters that are

widespread in western Nevada. Silicate (SiO4) concentra-

tions range rom 110 to 127 ppm and the pH is slightly basic

at 8.3. The geothermal fuid must be separated rom potable

ground water because o high Fluoride (5 ppm) and Arse-

nic (0.13 ppm) concentrations, which exceed drinking wa-

ter standards. These fuids pose only minor problems withscaling o mineral precipitate.

INJECTION OF GEOTHERMAL FLUIDS

Nevada Geothermal Utility Company operates under an

Injection Permit (NEV30013) administered by the Ground

Water Protection Branch, Bureau o Water Pollution Con-

trol, Nevada Division o Environmental Protection. The

permit requires that several parameters be measured and

reported. These are 1) fow rate in gpm, 2) water level in

eet, and 3) temperature o the produced fuids. A mechan-

ical integrity test is required every ve years as a condition

o permit renewal. The permit limits injection into Well

WE-3 to 300 gpm and 200 gpm into Well WE-1. Thereore

the total permitted injection o geothermal fuid is 500

gpm.

SPACE HEATING DISTRICT

The pipes or distribution o the geothermally heated wa-

ter to the individual lots were installed when all other utili-

ties were buried. Distribution lines vary rom 6-inch to

2-inch diameter. The hot water distribution piping is stubbed

into 36 x 24 inch utility boxes on each lot. The Warren Es-

tates subdivision has 60 lots and was built in 1983. Ameronberglass pipe was used or both the distribution and return

lines. Two-inch gate valves in the utility boxes allow or

customer hook-up. Balancing valves at the end o lines are

used to acilitate return fows. The heated city water makes

a circuit through buried pipes in the streets to the lots on the

system and returns to the heat exchanger to be reheated.

Manzanita Estates subdivision consists o 102 lots and

was constructed similar to Warren Estates except the distri-

bution and return system utilize steel pipe. Corrosion o the

Figure 2. Production and injection temperatures 2006.


18/20


steel pipe is the predominant cause o leaks in the Manza-

nita subdivision, while settlement and breakage o the ber-

glass pipe is the major cause o leaks in the Warren Es-

tates.

Initially, each home on the system was equipped with a

Btu meter that measured the fow rate and the temperature

drop, and computes heat energy consumption in therms

(100,000 British thermal units-Btus). There were signi-cant problems, malunctions and ailures with the Btu me-

ters due to their placement in the subsurace utility boxes.

For more than ten years, NGUC tried a variety o Btu me-

ters with the same disappointing results.

The major problem with the meters was water saturation

o the meter box by lawn irrigation runo, ailure o fow

meters, and general ailure o the electronics rom steam

condensation. The Btu meters had only an 8- to 10- month

service lie. Replacement rates and maintenance costs

were very high (Flynn, 2000).

NGUC, with assistance rom their consultant ThomasFlynn, perormed a study o the eciency and reliability

o the Btu meters (Flynn, 2000). Based on this study and

evidence o meter ailure the Public Utility Commission o

Nevada (PUC) issued a Compliance Order in June o 1998

allowing Nevada Geothermal Utility to implement a fat-

rate billing program or customers at Warren/Manzanita

Estates. The price per square oot was based on calcula-

tions using three estimates o energy consumption: 1) nat-

ural gas utilization, 2) an estimate o natural gas use by the

local utility company, and 3) an estimate by the USDOE

based on degree days. A valid measure o the square oot-age o homes within the system is maintained by the

Washoe County Assessors Oce. The proposed fat

schedule or 1998 is presented in Table 1.

Table 1. Proposed 1998 Flat Rate Billing (from Flynn,

2000).

and is also amortized over 12 months. Thereore the cost

or deicing a driveway is $282.48 per year.

Rates can only be raised by NGUC in January ollowing

an increase in the cost o natural gas by Sierra Pacic

Power Company. Thereore, there is a lag time o as much

as six months beore NGUC customers see an increase in

rates. In January 2008 major modications to the Service

Agreement are anticipated. These will include an increase

in the monthly service charge to $6.50 per month, compa-

rable to SPPCos increase in May 2006 and assessing an

additional charge or those customers with outdoor poolsthat wish to keep them heated year round. This will also

require the use o an insulated pool cover. Customers with

indoor pools will be assessed a lower rate than outdoor

pools. In addition, the 75% o the price o natural gas or

space and water heating may increase to 85% o the price

o natural gas. With the ineciencies o heat conversion

rom the combustion o natural gas, the actual cost will be

about 75% o the cost o equivalent thermal energy.

SYSTEM OPERATION

Geothermal fuid at a temperature near 200F (190-205F)

is pumped rom production well WE-2. The 40 hp turbine

pump supplies the pressure to orce the geothermal fuid

through the fat-plate heat exchangers and down the injec-

tion well, Figure 3. Heat rom the geothermal fuid is

transerred to municipal water across the heat exchanger.

The heated municipal water having a temperature be-

tween 140 - 165F is distributed to each lot in the subdivi-

sions. The water is delivered at a pressure above 10 psi.

During winter, the return fow temperature can be as low

as 110F.

A homeowner wishing to be connected to the system

must comply with the ollowing:

All homes must have back up heating and domestic

hot water systems.

All homes must have shut-o valves outside the utility

box on both the supply side and return side. A foor

drain must be installed in the mechanical room.

All home systems must be equipped with a circulating

pump. The customers system should not rely on the

The current billing rates are presented in Table 2. The

rate or space heating is still based on 75% o the price or

natural gas and has increased 29% in the past year.

The rate or swimming pools is based on 4 months

(June-September) usage and amortized over 12 months.

So the cost to heat a pool or our months is $527.28 a

year. Driveway deicing is calculated or a six-month period

Table 2. Current billing rate.


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GHC BULLETIN, JANUARY 2008 17

dierential pressure between the hot and cold side to

move the water through the home system.

All zone control valves, pressure relie valves and

other components o the system must be rated or 100

psi. The pressure relie valves should be set at 100

psi.

All systems must be equipped with a drain valve in

the utility room.

The size o the pipe rom the utility box to the home

should be no larger than 1- inch diameter.

Pipe insulation is oset rom the house to the utility

box and all pipes within the dwelling should be insu-

lated to R-11 or better. The insulation should be wa-

terproo and non-collapsible or non-compressible.

All systems must be equipped with an automatic pres-

sure shut-o valve.

Homes should utilize orced air heating systems rather

than hot water baseboard systems.

Nevada Geothermal Utility Company customers realize

a signifcant savings in heating costs when compared with

homes heated by natural gas. Homes in the Warren and

Manzanita Estates range in size rom 2,176 to 7,080 square

eet, with the average home being 3,728 square eet. Table

3 compares 3 homes heated with natural gas to the same

home heated with geothermal energy. Annual savings

range rom $197.42 or a 3,176 square oot home to $483.52

or a larger 5,306 square oot home. The percent savings is

between 17.1 and 22.2 percent per year.

CONCLUSIONS

Geothermal energy is an eective, clean, and efcient

method o supplying heat to residences in Warren and

Manzanita Estates. It is renewable and non-polluting.

However, it is not ree and appropriate ees must be estab-

lished to satisy both the owner o the utility and the con-

sumer.

The owner is responsible or operation, regulatory per-mitting, accounting and maintenance. The customer must

install specialized heat exchange equipment in order to

utilize the geothermal heat available to his/her lot. The

fnancial burden is borne by the owner and the consumer

and the environmental benefts are shared equally.

Expansion o the Geothermal Utility Company system

will depend upon the efciency gained by replacing the

original heat exchangers with new ones. These improve-

Figure 3. Schematic diagram o Nevada Geothermal Utility Company space heating district.

Table 3. Comparison o Annual Geothermal Space Heating

Costs to Natural Gas Heating Costs.


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Non-ProftOrganization

U.S. PostagePAID

Klamath Falls, ORPermit No. 45

GEO-HEAT CENTEROregon Institute o TechnologyKlamath Falls, OR 97601-8801

REFERENCESBateman, R. L. and R. B. Scheibach, 1975. Evaluation o Geo-thermal Activity in the Truckee Meadows, Washoe County, Ne-vada. Nevada Bureau o Mines & Geology Report 25, 38 p.

Flynn, Thomas, 1985a. Drilling, Completion, and TestingWarren Estates Geothermal Well WE-2. Consulting Report toWarren Properties May, 1985.

Flynn, Thomas, 1985b. Drilling, Completion, and TestingWarren Estates Geothermal Well WE-3. Consulting Report to

Warren Properties, August, 1985.

Flynn, Thomas, 1995. Drilling, Completion, and TestingWE-4, Geothermal Fluid Injection Well Warren Estates.Consulting Report to Warren Properties, May 1995.

Flynn, Thomas, 2000. Flat-Rate vs. Btu Meters; Warren andManzanita Estates Residential Geothermal District SpaceHeating, Reno, Nevada. Geo-Heat Center Bull. Vol 21, No. 2,June 2000.

Flynn, Thomas, and George Ghusn Jr., 1984. Geologic andHydrologic Research on the Moana Geothermal System,Washoe County, Nevada. University o Nevada - Las Vegas,Division o Earth Sciences Report DOE/RA/50075-2, 148 p.

Garside, Larry and John Schilling, 1979. Thermal Waters o

Nevada. Nevada Bureau o Mines and Geology Bulletin 91,pp. 163.

ments coupled with the addition o variable requency

drives to the geothermal production well motors may al-

low or the addition o several more homes to the system.

Maintenance o the aging system is problematic and it is

hoped that it will continue to provide space and hot water

heating or the oreseeable uture.

ACKNOWLEDGMENTS

The author grateully acknowledges Nevada Geother-mal Utility Company or allowing the presentation o this

material and especially Bruce Harvey or reviewing an

early drat o the paper. Reprinted with permission rom

the Geothermal Resources Council Transactions, 2007.

The author received the Best Paper Award (Direct-use

Session) or his presentation.

january 2008 geo-heat center quarterly bulletin

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