Fin inding a model for success wit ith lo low temperature geothermal Lessons fr Les from om Denm enmark Da David id Sim Simon ons – Geolo Geology Man Manager 1 26/10/2016
Summary • Denmark - Summary of activity • Future vision for Geothermal in Copenhagen • Cost and risk mitigation • Technology 2 26/10/2016
What is is happening in in Denmark today? • 3 wor orking facil acilities – Thi histed (19 (1984 84) 7M 7MW heat Gas assu sum Form ormation 43 43°C @ 12 1250 50m – Am Amager (20 (2003 03) ) 14 14MW heat Bunter Form ormation 74 74°C @ 26 2600 00m – Søn Sønderborg (20 (2012 12) 12 12MW heat Gas assu sum Form ormation 48 48°C @ 12 1200 00m • Es Essential to o succ uccess of of lo low temperature geo eothermal is is hea heating ne network • Wid ide spe spead ne network (63 (63% connectivity) mos ostly in in urb urban ar areas s • EU EUDP DP fun funding to: o: – Cost st and nd scop ope e drilling ng a cha halk stor orag age e we well – Ne New w Ge Geot other hermal al we well • To make geothermal part of Denmark’s energy future a much bigger vision is is ne needed. 3 26/10/2016
Forw rward Pla lan • 8 new geothermal plants in the city • Each plant will output 10-15 MW of heat and will consist of a vertical pilot well, 2 directional injector wells and 2 directional producers • All wells target the Gassum Formation sandstones Stills are taken from a video clip created using Geologiq ™ 4 26/10/2016
Is Is this is ju justif ifie ied? ASSET ET VALUE • Asset value. Total heat in place in Denmark recently estimated at 73 Billion Gj. This is 1.76 Billion BOE (*1) DE DEMAND • Aim is to deliver 30% Geothermal heat to the network. Over 30 years that equates to £12 billion in revenue(*2) Des Despite thi his, s, in investment rem emains s sh shy as as de decisi sions s ar are base based on on expensi sive pr prototype pr projects. s. Methods s for or reducing cos osts s and and miti itigating ris isks s is is a a less lesson tha hat can an be be dr drawn fr from the oil oil ind industry. *1 Frederikshavn, Halder, Gassum & Bunter Formations. Recovery factor is 0.33. 5 GJ per m2 assumption. New 3D heat model still under construction. Recovery is only 2% of total energy in place. 30 year model. *2 Number equates to a total of capacity 1,091 MW run year round. Operated for 30 years with 2015 average heat price (355 DK or £42/MWh). Exchange rates from 19/10/16
HOW TO REDUCE COSTS AND RISKS – LESSONS FROM THE OIL SECTOR 1900 1986 TODAY 40.0 35.0 30.0 Good Days Average 25.0 Poor 20.0 In the early days, the oil industry 15.0 drilled expensive prototype wells with 0 5 10 15 20 no knowledge sharing. Well Number Brett and Millheim (1986) savings were up to 34% from first well costs. Today in US Drill cost savings are up to 52% (US Energy Information Administration 2016) • By upscaling geothermal operations and applying a ‘whole cycle’ manufacturing approach to project planning and execution, well costs reductions of up to 52% are achieved • Optimised data acquisition to allow reservoir engineering to derisk the reservoir model To harness these efficiencies, heating companies need a geothermal operating company, a professional partner with a vested interest delivering necessary savings to a project. 26/10/2016
Network Temperature • Heating network temperature has a significant impact on the economics of geothermal • Danish network is generally run at or close to 80/55 (due to requirements of older housing stock) • Geothermal heat production from Gassum typically +/- 70°C so heat pumps necessary in plant so increasing costs • A new build system today supplying buildings of modern construction could use a ‘low temperature’ network • This would make the economics of geothermal, and other renewable technologies very competitive. Biomass plant (woodchip) Copenhagen
Geo eothermal l Tech echnology Ce Centre Tonder Geothermal al test ce centre Par artnerships s inc include: • HUISMAN for or rig ig technologies s (urb (urban dr drilling), com omposi site cas asin ing and and lin liner, cas asing whi hile dr drilling. • FORCE for or corrosi sion man anagement • Germ erman oil oil tools s for or wel ell he head system. Mak ake it it sim simpler, , lig lighter and and cheaper. ch . (C (Currently com ombines s wel ellhead, , cas asing han hanger and and xm xmas as tree) • GEOOP for or reverse ci circulating g ce cement to pr protect aq aquifers. s. • Dan Danfoss for or modular con ontainer uni units. s.
Summary Extremely valuable low temperature geothermal assets in Denmark Upscaled and industrialized geothermal operations will provide: • Suitably large heat outputs for the demand that exists in Denmark today • Drilling cost reductions of up to 52%. • Mitigation of uncertainty in the drilling process • Mitigation of uncertainty in establishing connectivity between wells • Better informed investment decisions - an end to expensive prototype projects and an understanding of the real cost of geothermal heat David Simons GEOOP Geology Manager Mob: +44 (0)7966 960594 david.simons@live.co.uk Bentzonsvej 6-8, Parterre, 2000 Frederiksberg, Denmark 9 26/10/2016
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