Hot Rocks Geothermal Drilling, Operations and Insurance Implications

Transcription

1 Hot Rocks Geothermal Drilling, Operations and Insurance Implications Gary Mawditt MatthewsDaniel London September 28, 2012

2 Geothermal Drilling, Operations & Insurance Implications What is it / Where is it? Types of Resource Types of Surface Equipment Enhanced Geothermal Systems What can go Wrong Some Insurance Considerations

3 What is Geothermal Energy? Geo = Earth Thermal = Heat Geothermal energy is thermal energy generated and stored in the Earth The geothermal gradient drives a continuous conduction of thermal energy in the form of heat from the core to the surface.

4 What is Geothermal Energy? Geothermal Energy is not new it has been used for over 100 years to generate electricity from hot water and steam produced in the Earth s crust.

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7 What is Geothermal Energy? Geothermal Energy is not new it has been used for over 100 years to generate electricity from hot water and steam produced in the Earth s crust. Conventional geothermal energy is generated from naturally occurring hot water and steam in rocks near volcanic centres. They are based on wet systems, from which the hot water and steam is harvested. Development of geothermal energy has historically been confined to volcanic areas on tectonic plate boundaries, including California, Indonesia and Iceland. Conventional geothermal energy stations are well established across the globe, in countries such as the USA, Iceland, Italy, New Zealand, Japan and others.

8 Global Locations of Geothermal Power Plants Presentation Title 8

9 Installed geothermal electric capacity Country 1990 MWe 1995 MWe 2000 MWe 2005 MWe 2010 Mwe % National Prod n Argentina Australia Austria China Costa Rica % El Salvador % Ethiopia France (Guadeloupe) Germany Guatemala Iceland % Indonesia , % Italy % Japan % Kenya % Mexico % New Zealand % Nicaragua % Papua New Guinea Philippines 891 1,227 1,909 1,931 1, % Portugal (The Azores) Russia (Kamchatka) Thailand Turkey USA 2, , ,228 2,544 3, % Total 5, , , , ,

10 Installed geothermal electric capacity Country 1990 MWe 1995 MWe 2000 MWe 2005 MWe 2010 Mwe % National Prod n Argentina Australia Austria China Costa Rica % El Salvador % Ethiopia France (Guadeloupe) Germany Guatemala Iceland % Indonesia , % Italy % Japan % Kenya % Mexico % New Zealand % Nicaragua % Papua New Guinea Philippines 891 1,227 1,909 1,931 1, % Portugal (The Azores) Russia (Kamchatka) Thailand Turkey USA 2, , ,228 2,544 3, % Total 5, , , , ,

11 Geothermal Energy The Benefits An effectively inexhaustible power supply Provides high-availability (ie, continuous) baseline power always on Emissions free / carbon neutral (once in operation!)

12 Types of Geothermal Resource - Volcanic Plant Insulating sediments Underground Water Hot Volcanics 12

13 Types of Geothermal Resource - Sedimentary Plant Insulating sediments Underground Water Sandstones or Carbonates Heat Source 13

14 Types of Geothermal Resource - Hot Wet Rocks Plant Insulating sediments Underground Water Hot Fractured Granite 14

15 Dry Steam Uses geothermal steam of 150 C or greater to directly drive turbines. Old design, but still widely used. Generator Turbine Condenser Wellhead Ground surface Wellhead Water Steam Subsurface injection 15

16 Flash Steam High-pressure hot water is delivered into lower-pressure surface tanks where the water flashes into steam. The steam is then used to drive turbines. Generator Turbine Separator Condenser Requires fluid temperatures greater than 180 C. The majority of modern geothermal power stations use this principle. Wellhead Ground surface Water Steam Wellhead Subsurface injection 16

17 Binary Cycle The most recently developed system Can accept fluid temperatures as low as 57 C The most common type of geothermal electricity plant being constructed today Heat Exchanger Generator Turbine Condenser Thermal efficiencies of only about 10-13% are typically achieved. Wellhead Ground surface Water Wellhead Isobutane Liquid Isobutane Vapor Subsurface injection 17

18 New Developments in Geothermal Energy Hot Dry Rocks or EGS Extract from Hot Fractured Rock Geothermal Project, promotional video published by Geodynamics

19 Hot Dry Rocks Plant Insulating sediments Hot Fractured Granite 19

20 New Developments in Geothermal Energy Hot Dry Rocks or EGS 10 SEPTEMBER 2012 Innamincka Deeps Joint Venture Completion of Habanero 4 Geodynamics Limited (ASX: GDY), operator of the Innamincka Deeps Joint Venture, is pleased to announce that the Habanero 4 completion has been run and Rig 100 was released at 12:30pm (AEST) on Saturday 8 September.

21 Some Issues Reliability of EGS developments Concerns regarding induced seismicity Potential liabilities Capital costs above $4 million per MW

22 Geothermal Drilling Upper sections comparable with conventional Oil & Gas drilling Hot Rock / Reservoir section has different challenges: Igneous Rocks are much harder than Sedimentary Impermeable reservoir, so unlikely to flow, BUT: Typically highly fractured and under-pressured Geothermal formations are, by definition, hot (160 C to > 300 C) Abrasive (quartz content above 50%) Usually contain dissolved or free CO 2 and H 2 S.

23 Well Problems Failure of well components (casing strings, seals, etc) from corrosion and stress cracking Temperature effects leading to failure of surface equipment through expansion / contraction Mud losses while drilling, leading to loss of hydrostatic control Steam flashing Stuck Pipe CCC

24 Surface Facilities Machinery Breakdown Corrosion

25 Insurance Issues Is there enough Capacity?

26 Insurance Issues August 2, 2011 (bloomberg.com) - Munich Re Braves Drilling Risk to Insure German Geothermal Plant September 5, 2012 (gcube.com) - GCube secures $175m in additional biomass, geothermal insurance demand

27 Insurance Issues Is there enough Capacity? Do Insurers Have the Appetite? Wordings

28 MatthewsDaniel