Hot Rocks Geothermal Drilling, Operations and Insurance Implications Gary Mawditt MatthewsDaniel London September 28, 2012
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
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.
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.
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.
Global Locations of Geothermal Power Plants Presentation Title 8
Installed geothermal electric capacity Country 1990 MWe 1995 MWe 2000 MWe 2005 MWe 2010 Mwe % National Prod n Argentina 0.7 0.6 0 0 0 Australia 0 0.2 0.2 0.2 1.1 Austria 0 0 0 1 1.4 China 19.2 28.8 29.2 28 24 Costa Rica 0 55 142.5 163 166 14.0% El Salvador 95 105 161 151 204 25.0% Ethiopia 0 0 8.5 7 7.3 France (Guadeloupe) 4.2 4.2 4.2 15 16 Germany 0 0 0 0.2 6.6 Guatemala 0 33.4 33.4 33 52 Iceland 44.6 50 170 322 575 30.0% Indonesia 144.8 309.8 589.5 797 1,197 3.7% Italy 545 631.7 785 790 843 1.5% Japan 214.6 413.7 546.9 535 536 0.1% Kenya 45 45 45 127 167 11.2% Mexico 700 753 755 953 958 3.0% New Zealand 283.2 286 437 435 628 10.0% Nicaragua 35 70 70 77 88 10.0% Papua New Guinea 0 0 0 39 56 Philippines 891 1,227 1,909 1,931 1,904 27.0% Portugal (The Azores) 3 5 16 16 29 Russia (Kamchatka) 11 11 23 79 82 Thailand 0.3 0.3 0.3 0.3 0.3 Turkey 20.6 20.4 20.4 20.4 82 USA 2,774.6 2,816.7 2,228 2,544 3,093 0.3% Total 5,831.7 6,866.8 7,974.1 9,064.1 10,716.7 http://www.geothermal-energy.org/226,installed_generating_capacity.html
Installed geothermal electric capacity Country 1990 MWe 1995 MWe 2000 MWe 2005 MWe 2010 Mwe % National Prod n Argentina 0.7 0.6 0 0 0 Australia 0 0.2 0.2 0.2 1.1 Austria 0 0 0 1 1.4 China 19.2 28.8 29.2 28 24 Costa Rica 0 55 142.5 163 166 14.0% El Salvador 95 105 161 151 204 25.0% Ethiopia 0 0 8.5 7 7.3 France (Guadeloupe) 4.2 4.2 4.2 15 16 Germany 0 0 0 0.2 6.6 Guatemala 0 33.4 33.4 33 52 Iceland 44.6 50 170 322 575 30.0% Indonesia 144.8 309.8 589.5 797 1,197 3.7% Italy 545 631.7 785 790 843 1.5% Japan 214.6 413.7 546.9 535 536 0.1% Kenya 45 45 45 127 167 11.2% Mexico 700 753 755 953 958 3.0% New Zealand 283.2 286 437 435 628 10.0% Nicaragua 35 70 70 77 88 10.0% Papua New Guinea 0 0 0 39 56 Philippines 891 1,227 1,909 1,931 1,904 27.0% Portugal (The Azores) 3 5 16 16 29 Russia (Kamchatka) 11 11 23 79 82 Thailand 0.3 0.3 0.3 0.3 0.3 Turkey 20.6 20.4 20.4 20.4 82 USA 2,774.6 2,816.7 2,228 2,544 3,093 0.3% Total 5,831.7 6,866.8 7,974.1 9,064.1 10,716.7 http://www.geothermal-energy.org/226,installed_generating_capacity.html
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!)
Types of Geothermal Resource - Volcanic Plant Insulating sediments Underground Water Hot Volcanics 12
Types of Geothermal Resource - Sedimentary Plant Insulating sediments Underground Water Sandstones or Carbonates Heat Source 13
Types of Geothermal Resource - Hot Wet Rocks Plant Insulating sediments Underground Water Hot Fractured Granite 14
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
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
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
New Developments in Geothermal Energy Hot Dry Rocks or EGS Extract from Hot Fractured Rock Geothermal Project, promotional video published by Geodynamics
Hot Dry Rocks Plant Insulating sediments Hot Fractured Granite 19
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.
Some Issues Reliability of EGS developments Concerns regarding induced seismicity Potential liabilities Capital costs above $4 million per MW
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.
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
Surface Facilities Machinery Breakdown Corrosion
Insurance Issues Is there enough Capacity?
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
Insurance Issues Is there enough Capacity? Do Insurers Have the Appetite? Wordings
www.matdan.com MatthewsDaniel